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JAMAICA, TRINIDAD AND TOBAGO,
LEEWARD ISLANDS, WINDWARD ISLANDS,
BARBADOS, AND BRITISH GUIANA
Projected Levels of Demand, Supply, and Imports
of Agricultural Products
to 1975
ERS Foreign 94
FOREIGN REGIONAL ANALYSIS DIVISION ECONOMIC RESEARCH SERVICE
U.S. DEPARTMENT OF AGRICULTURE
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DEPARTMENT OF AGRICULTURE
NEG. ERS 2971-64(6) ECONOMIC RESEARCH SERVICE
This report was published in Israel with Public Law 480 (104a) local currency funds made available through
the Foreign Agricultural Service, U.S. Department of Agriculture
Published for the U.S. Department of Agriculture, Economic Research Service
by the Israel Program for Scientific Translations
Printed in Jerusalem by S. Monson
A T
I C
PA CIFIC
OC EA.\
CONTENTS
Page
Foreword . . . . . . . . . . . . . . . . . . 1
PART ONE: Introduction and Summary .... . . . . . 3
Chapter
1 Introduction . . . . . . . . . . . . . . .... 3
2 Summary of Results .............. . . . . .... 9
PART TWO: Growth of the Economies .. . . . . . 15
1 Two Projections of the Population of the West Indies Between
1965 and 1975. . . . . . . . . ... ...... 15
2 The Economic Growth of Jamaica 1950 through 1960 and 1965,
1970 and 1975 . . .. . . . . . . . . . 22
3 Growth of the Economy of Trinidad and Tobago . . . .... 27
4 Growth of the Economy of the Leeward Islands, Windward
Islands and Barbados ........... . . . . . 36
5 Long-Term Growth of British Guiana . . . . . . .... 40
Explanatory Note for Part Two: List of Industries Included in
Each Sector . . . . . . . . . . . . . 51
PART THREE: The Projection of Demand . . . . . . 55
1 Demand and Income .............. ............. 55
2 Food Expenditure in Jamaica in 1958: Survey Results ...... 59
3 Income Elasticities of Demand in Jamaica . . . . . ... 62
4 Income Elasticities of Demand in Other West Indian Territories . 68
5 Projections of Final Demands ............. . .. 72
PART FOUR: Projections of Supply ...... . . . . 75
1 Land Utilisation in the West Indies . .... ......... 75
2 Scale of Production of Agricultural Commodities . . . ... 79
3 The Effect of Changes in Intensity of Production on Total Supply . 85
4 The Estimation of Total Locally Produced Supplies of Commodities 88
5 Factors Influencing Yields and Production
Economics and Farm Organisation ... . . . . . . 93
6 Factors Influencing Yields and Production
Physical and Technical .......... . . . . . 106
Chapter Page
PART FIVE: Reconciliation ..... ..... . . . . 116
1 Reconciliation of Demand and Supply and Import Demand . . .. 116
Appendix I: Note on Import Data . . . . . . . . . 123
II: Main Sources and References . . ....................125
III: Tables 1--23 ..... . . . . . . . . ..... 128
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I
FOREWORD
The Study
This report is the result of a contract study between the Foreign Agricultural Service,
United States Department of Agriculture, and the Institute of Social and Economic Re-
search, University College of the West Indies, Jamaica. The contract was administered
by the Western Hemisphere Branch, Regional Analysis Division, Economic Research
Service of the Department.
The major objective of the study was to obtain a rational projection of the import de-
Smand of the West Indies Federation by 1965 and 1975 for specified and other agricultural
Products. The contract also specified four subsidiary objectives: (1) Develop long-range
projections for the economy, including forecasts of gross national income, etc; (2) esti-
mate aggregate demand for the specified products in 1965 and 1975; (3) determine the
magnitude of domestic supplies of these products by 1965 and 1975; and (4) ascertain
the extent of import demand for these products by 1965 and 1975 on the basis of long-term
supply-and-demand relationships. Analysis was required for the following products:
Wheat and wheat flour; corn; rice; other grains, such as oats and barley; sugar and its
products; vegetables, including "Irish" potatoes; deciduous fruits, such as apples and
pears; citrus fruit; bananas; meat, including poultry; eggs; dairy products; fats and
oils; coffee; cocoa; tobacco; and cotton. In addition, other commodities were to be
- covered if the need was revealed as the study developed. The contract was entered into
in May 1960 with the final report to be submitted in a form suitable for publication in 30
Months.
At the time the study was undertaken the area covered was the newly formed West
Indies Federation which was slated to become a nation within the British Commonwealth.
Subsequently, the Federation disbanded with Jamaica and Trinidad and Tobago becoming
independent, British Guiana scheduled for independence, and Barbados and the Windward
Islands (Grenada, St. Vincent, St. Lucia and Dominica) and the Leeward Islands (Antigua,
St. Kitts, Nevis, Anguilla, and Montserrat) remaining as British Dependencies.
The area under study represents a small but important and rapidly growing market for
U.S. agricultural exports. Such exports totalled $20.7 million in 1958 and reached $30.5
million in 1962, an increase of nearly 50 percent. U. S. agricultural exports to the area
in 1962 represented 7 percent of the total for Latin America.
Research Team
H. D. Huggins, Director
E. Nash, University of Wales, Aberystwyth, Visiting Adviser
G.C. Abott D. Macfarlane
E. Armstrong C. O'Loughlin
D. Harris L. Taylor
A. Kundu C. Y. Thomas
Study Report
The views expressed and the accuracy of analysis in this report are those of the Insti-
tute, and do not necessarily reflect concurrence by the United States Department of Agri-
culture. The published report is essentially in the form that it was submitted, editing
having been done by the Department under an understanding with the Institute that only
substantive changes would be submitted for their review.
The final report was received in December 1962. However, it was not accepted until
December 1963 pending receipt of working papers and the required analysis on cotton.
Extensive editing of the final report was required due to numerous inconsistencies, large-
ly statistical. This problem apparently stemmed in part from the report's being largely
a summary of 18 working papers by various research team members. The final report
content met major and subsidiary study objectives and included required product analyses.
In editing, British spelling and style have been retained. All tonnage figures are in
long tons (2,240 pounds) unless otherwise designated. Generally, in the tables, N. A.
means not available and dashes are used to indicate zero. Monetary conversion rates are
J1 = U.S. $2.80, and BWI$1 = U.S. $0.583.
PROJECTED LEVELS OF DEMAND, SUPPLY, AND IMPORTS OF AGRICULTURAL
PRODUCTS OF JAMAICA, TRINIDAD AND TOBAGO, LEEWARD ISLANDS,
WINDWARD ISLANDS, BARBADOS, AND BRITISH GUIANA, TO 1975
Part One
INTRODUCTION AND SUMMARY
Chapter 1
INTRODUCTION
Purpose of study
The purpose of this study is to project the long term supply of and demand and import
demand for agricultural commodities in the West Indies. We have made projections of
demand and supply for sugar and sugar products, rice, bananas, citrus fruits, root crops,
vegetables, corn and cornmeal, pulses, beef, mutton, pork, goat mutton, poultry meat,
eggs, milk, fats and oils, and cotton. We have projected demand only for wheat and wheat
flour, apples, pears and grapes, tinned and salted meat, tinned fruit and vegetables and
cheese (which commodities are not produced in any important quantities in the West Indies)
and supply only of cocoa, coffee and tobacco products for which demand is small or for
which appropriate demand data were not available.
Having made separate projections of demand based on estimated income elasticities,
income and population growth, and projections of supply based on expected changes in
acreages and yields, we have arrived at projections of import demand and amounts avail-
able for export.
Period of study
The projections relate to the years 1965, 1970, and 1975. The base year chosen for
most purposes was 1958, the year for which the most comprehensive data were available.
It should be emphasised that this study does not purport to make short term projections,
the techniques for which are rather different than those for long term projections.
Area covered
The area which we have covered in this study includes Jamaica; Trinidad and Tobago;
the Leeward Islands (Antigua, St. Kitts-Nevis-Anguilla, and Montserrat), Windward
Islands (Grenada, St. Vincent, St. Lucia, and Dominica) and Barbados; and British
Guiana. At all stages of the study we have considered these as four separate territories.
When this study was started in 1960, the first three of these territories were formed
into a federation. In 1961 Jamaica and then Trinidad and Tobago elected to withdraw from
this federation. At the present time the Leeward Islands, Windward Islands and Barbados
are endeavouring to form a federation of those islands of the British Lesser Antilles. 1/
1/ The federation had not been formed at the time this publication goes to press.
When we refer to the West Indies, we include all four territories under review. It is
considered, however, that as a national unit, the West Indies is now meaningless, and al-
though in some of our tables and charts we have aggregated the territorial data we have
not made projections of main tables for the West Indies as one country. Present trends
indicate that the four territories will tend to diverge more as they become independent
sovereign states. These differences may influence not only importing and exporting poli-
cy but the very structure of the economy. (For instance the trend in British Guiana seems
to be toward an economic and social structure different from that in Jamaica and Trinidad
and Tobago. ) The continued dependence of the Leeward Islands and Windward Islands on
external assistance also must influence the policy and structure of the territories. As the
study has continued, we have increasingly felt that an aggregation of all territories in the
final results would not be very valuable and have therefore presented our information as
for four separate national entities, except in the summary tables and charts.
Method of the study
Details of the methods employed are found in the relevant parts of the study and it is
not intended to detail them here. We should perhaps explain briefly at this point the gene-
ral approach to the study.
Part two presents an account of the projected growth of population and of income prod-
uct and expenditure. The population projections were made especially for this survey
but are provisional pending the results of the 1960 census. A description of the method
of projecting is given in part two, chapter 1.
The national income projections in part two were made especially for this study and
although for Trinidad and Tobago and Jamaica base period figures were available, these
also had to be compiled for British Guiana and most of the smaller islands.
The method of projecting national income follows from that adopted in the West Indies.
The method is fairly standard for the various territories, as much of the work has been
coordinated in past years by the Institute of Social and Economic Research in the Univer-
sity of the West Indies. However, certain developments appear in this study: One is the
projections themselves, since no projections have previously been completed for any of
these territories; the second is the considerable use that has been made of input-output
tables which have not previously been widely used in this region. We consider that these
tables are not only desirable but absolutely necessary for projections, since it is only
through such tables that the effects of various assumptions in the entire economy can be
gauged. For Jamaica and Trinidad and Tobago, input-output estimates have been project-
ed for the relevant years, and for British Guiana, a base year matrix and inverted matrix
have been presented from which any number of different projections can be made.
The methods used in making demand projections are described in part three. In
general the method has been to arrive at income elasticities by using budgeting surveys
covering different income groups at one period and also by relating consumption trends
in the past to income trends. Base year food budgets were available for Jamaica and
Trinidad and Tobago but it was necessary to compile them for this study for the Leeward
Islands, Windward Islands and Barbados, and for British Guiana. All data were expressed
first on a per capital basis, and then projected income and population indicators were
applied to obtain final demand total. No previous studies of this kind had been done in the
West Indies and all the data presented in part three was gathered particularly for this
study.
On the supply side, studies of supply conditions for various commodities provided most
of the raw material for part four. In general the method was to take into account all fac-
tors likely to influence acreages and yields, and to project total supplies on the basis of
these findings. Naturally a great number of factors of an economic, technical, and physi-
cal nature were taken into consideration and our methods of treating these is explained in
part four.
In reconciling demand and supply and arriving at import demand we have assumed a
constant price relationship between products as a first assumption. Where a product is
mainly imported or is produced for export as with sugar and citrus we have generally
assumed supply to consumers will be elastic and no considerable changes in price rela-
tionships are likely. We have had to make an exception in the case of bananas, where
domestic supplies tend to be a residual from exports rather than exports a residual after
domestic needs have been met, and have predicted that price adjustments will follow from
discrepancies between demand and supply projections. As regards commodities produced
mainly for local consumption, we have also predicted price adjustments rather than im-
portations to meet a deficiency between demand and supply, particularly for certain roots
and vegetables and fresh milk.
Only for population have we presented two possible projections, but we have only used
one throughout the study. It would be possible for us to present any number of projections
of the important indicators based on different assumptions regarding income growth,
population growth, demand changes and supply changes. We do not favour a method of
presentation which proliferates the number of alternative projections and we feel that to
present two projections would in most cases emphasise maxima and minima rather than
the "average" or most probable course of events. Our technique has been to present one
set of what we feel to be the most probable projections, at the same time discussing the
modifying influences which certain different assumptions are likely to have on them and
in particular we have endeavoured to present our information in such a way that, if proper
mechanical equipment becomes available, alternative major assumptions can easily be
fed into the base model.
One point which must be mentioned here since it had some influence on our method is
that the West Indies is at the moment very much at cross roads as regards its economic
future. For most territories the fast tempo of economic advance experienced in the
1950's had already slowed down by 1958 and many of the major trends of the fifties have
not been continued into the sixties. This has made it almost impossible to project straight
line or curvilinear trends solely from past trends. In fact the economic situation has
been such as to discourage the use of purely mathematical relationships and to encourage
the assimilation of empirical observations into our general conclusions, and this we can-
not help but feel has been of great benefit to the study.
The importance of agriculture in the West Indies economy
The area is underdeveloped in that per capital income is low, unskilled agricultural
labour is the main activity, productivity is low and capital is deficient; also some skills
still have to be imported. All these conditions are, however, not of the lowest that can
be found, even in the Western Hemisphere, and Table 1 (see appendix) indicates the posi-
tion which the West Indies occupies in the Americas, in terms of per capital income.
These characteristics are found in all parts of the West Indies. Other characteristics,
which are not common to all underdeveloped countries, are that land is a relatively
scarce resource and unskilled labour a relatively plentiful one. Agriculture, although im-
portant, is not as important as in many underdeveloped countries. In 1959 the export
agriculture, sugar cane growing, domestic agriculture, and livestock and fishing sectors
contributed about 15 % to the gross domestic product of Jamaica (see Table 3b). In the
same year the agriculture sector accounted for 12.5% of the gross domestic product of
Trinidad and Tobago (see Table 4c). In 1960 the export agriculture and other agriculture
sectors contributed about 38.5 % to the gross domestic product of the Leeward Islands,
Windward Islands and Barbados (see Table 5b). In British Guiana that year the agricul-
ture and the livestock, forestry, and fishing sectors accounted for about 27.2 % of the gross
domestic product (see Table 2. 5. ii). With the exception of the Leeward Islands, Wind-
ward Islands and Barbados the industries included in each sector are shown in the expla-
natory note for part two.
Trinidad and Tobago's main industry is oil mining (production) and refining, and in
Jamaica and British Guiana, the mining industries (bauxite and alumina) contribute very
considerably to the economies.
Another characteristic of this region is that although it is underdeveloped, the cash
economy is advanced, and the non-market sector is smaller than in many countries of
equal living standards. This sector varies, however, from territory to territory and is
estimated at about 12 % of the gross domestic product in the Windward Islands and about
2 % in Trinidad and Tobago. Even in the Windward Islands it is a low proportion as com-
pared, for instance, with countries of Africa where it may reach 65 o of the gross domes-
tic product.
Trinidad and Tobago is the most prosperous and developed of the areas with which we
are concerned (see tables to part two). Jamaica has the next highest per capital product,
Barbados and British Guiana are probably comparable in terms of real income and in all
these territories the price level is rather lower than that for Jamaica; finally the Lee-
ward Islands of St. Kitts and Antigua are slightly more prosperous than Montserrat and
the Windward Islands. These last territories approximate more to the accepted model of
undeveloped territories.
Sugar is the most important agricultural industry in the West Indies and it has been
estimated that it provides a living for about three quarters of a million people, including
dependents of workers. Sugar is grown in Jamaica where it contributes 6.0% of the gross
dclme:itic product; in Trinidad and Tobago where it contributes 3.0%; in British Guiana
where it contributes 17.0%; in Barbados where it contributes 28%; and in the Leeward
Islands where it contributes 26 %. Cane is grown by peasants and estates but the latter
account for practically all the production in British Guiana and St. Kitts.
Rice is an important product for British Guiana although it is grown in Jamaica and
Trinidad and Tobago on a smaller scale. Rice is grown on farms averaging 10 to 14 acres
in British Guiana and there are a large number of very small producers.
Bananas is the second most important crop to the West Indies as a whole and is grown
for export in Jamaica, the Windward Islands, and Trinidad and Tobago. Although it is
sometimes grown by estates it is mainly associated with peasant cultivation.
The other main export products are citrus, grown and processed in Jamaica, Trinidad
and Tobago, and Dominica, although smaller quantities are exported from St. Lucia,
Grenada and British Guiana; coffee, grown on a rather smaller scale in Jamaica and
Trinidad and Tobago; and coconut products, exported mainly for the interterritorial
trade. Spices are important in Grenada and are also of some significance in Jamaica.
All these crops except coconut are produced mainly by small growers. Although estates
account for a significant part of the total product and acreage, the largest number of grow-
ers is found in the smaller size groups. Sea island cotton is grown on any important
scale only in St. Kitts-Nevis-Anguilla, Antigua, Montserrat and St. Vincent. It is declin-
ing in importance but is still the main crop in Montserrat and Nevis. All export agri-
culture, excluding sugar, accounts for 2.3 % of the gross domestic product in Jamaica,
2.2 % in Trinidad and Tobago and 9.4 % in the Leeward Islands, Windward Islands and
Barbados. In British Guiana there are no important export crops other than sugar and
rice, both domestic and export accounting for 4.6 % of the gross domestic product.
Great difficulties have been experienced in measuring exactly the scale of domestic
food crop production in the West Indies and all figures must be treated with reserve.
These crops are of course grown in all territories and are wholly peasant produced. The
proportion which they contribute to the gross domestic product is approximately 4 % in
Jamaica, 5 % in Trinidad and Tobago, 7% in the Leeward Islands, Windward Islands and
Barbados, and 4 % in British Guiana.
Livestock production has until recently always been mainly a peasant undertaking
except for cattle ranching in British Guiana. Recently there has been a trend toward
larger units, particularly in poultry and egg production and in beef production in Jamaica.
The livestock population of the West Indies is fairly large, related to both human popula-
tion and land area. All territories produce these products and peasant producers still
predominate. The proportion contributed to the gross domestic product is approximately
1.9% in Jamaica, 1.8% in Trinidad and Tobago, 2.1% in Leeward Islands, Windward
Islands and Barbados and 3.2 % in British Guiana.
The above remarks indicate that although the West Indies is mainly a primary produc-
ing area, the importance of agriculture is not as great as in many countries of a similar
stage of development.
External factors
As this study progressed, the external factors influencing the economic relationship
between the various territories and each other and their relationship with the outside
world underwent considerable changes. With the break up of the West Indies federation
the plans for a customs union were immediately and indefinitely shelved. Two independent
nations, Jamaica and Trinidad and Tobago, appeared on the scene and positive steps are
being made toward the independence of British Guiana and a federation of the Leeward
Islands, Windward Islands and Barbados.
But inter-Caribbean trade in agricultural commodities is small and indeed is signifi-
cant only for rice and coconut products. Agriculture in the West Indies is far more likely
to be affected in the future by external factors, particularly the consequences of Britain
joining a common market in Europe.
It was not within the scope of this study to make a detailed examination of external
markets for the main export products. It has, however, become increasingly apparent
that changes in the trading relationships of those countries that are main customers of the
West Indies may well involve alterations in our projections, and that further study of the
effect of the European Common Market should be made when the conditions of Britain's
entry into this are more clearly specified.
Chapter 2
SUMMARY OF RESULTS
The long term growth of the economy
Population. Two simple projections are offered as provisional estimates pending final
fertility and mortality tables from the 1960 census.
At the 1946 census the population of the West Indies territories under review was
2,776,056; in 1960, according to the census of April 1960, it was 3,669,528, an increase
of 32.18 %.
The first projection was based on the fitting of an exponential function to the data for
1946 and 1960. A growth rate of 1.994 % per annum was derived. This projection gave
total population figures for the West Indies as a whole of 3,669,528 in 1960, 4,054,900 in
1965, 4,480,100 in 1970 and 4,949,800 in 1975. 1/ The results by territories are shown in
Table 1.2. i.
Table 1.2. i
Estimates by territories of population used in this survey, 1960 and projections
Territory 1960 1965 1970 1975
Jamaica 1,613,148 1,744,400 1,886,500 2,040,100
Trinidad and Tobago 827,957 953,290 1,097,600 1,263,800
Leeward Islands,
Windward Islands and
Barbados 669,654 719,610 774,010 832,130
British Guiana 558,769 646,530 774,400 858,340
Total 3,669,528 4,063,830 4,502,510 4,994,370
The first projection assumes that the rate of migration will approximate that during
1946-60; a second projection is presented which extracts from the data the influence of
1/ The small discrepancy found between these totals and those in Table 1.2. i is due to
approximation in the aggregation and the territorial rates.
migration and presents figures which are based purely on natural growth rates. The re-
sults from this projection are that the population totals 3,669,528 in 1960, 4,186,850 in
1965, 4,778,300 in 1970 and 5,451,610 in 1975.
In our projections of demand we have utilised the first population projections, which
estimates approximately a continuation of the present trend in population growth. The
territorial breakdown of population for this projection is shown in Table 1.2. i.
Jamaica. We briefly examined the economic growth of Jamaica between 1950 and 1960
and concluded that growth had been at an unusually high rate. This high rate was mainly
a result of the emergence and development of the bauxite alumina industries and is un-
likely to continue. In spite of the high rate of growth in the economy as a whole, agri-
cultural sectors showed only a moderate rate of growth in the past decade and we consider
that there will be little change in growth rates of the agricultural sectors. We predict
that the share of agricultural sectors will decrease from 16.3 % of the gross domestic
product in 1958 to 12.3 % in 1975 (Table 3b).
The average growth rate at constant factor cost was 8.8 % per annum in real value for
the period 1954-59. We are unable to predict so high a growth rate for the future but
allowing also for population change we have projected a real per capital annual growth
rate of 3.7% between 1958 and 1965, 3.5% between 1965 and 1970 and 2.8%between 1970
and 1975. Totals of gross domestic product and national income are shown in Table 1. 2. ii.
Trinidad and Tobago. In current prices the gross domestic product (GDP) increased
by 156 % between 1951 and 1959. During this period agriculture declined in importance
from 18.0 % of the GDP to 12.5 % of the GDP (excluding sugar manufacturing).
In Trinidad and Tobago expansion of the economy has been more dependent on invest-
ment in the oil industry than on any other single factor. Although some slowing down in
this investment is predicted, it is felt that in general the economy of Trinidad and Tobago
will continue to grow at rates approximating those of the past decade and a growth of
135% is predicted between 1959 and 1975. The aggregates are shown in Table 1.2. ii.
Leeward Islands, Windward Islands and Barbados. In this territory we predict a very
slightly greater rate of growth than that which we believe has prevailed in the past decade
(although details are not available of past growth rates for all territories). This predic-
tion arises partly from the fact that this territory is at a lower stage of development than
other territories and partly from the result of an economic union which is expected to take
place between these territories. The growth rate that we have predicted works out at
about 2.8% per annum at constant prices between 1960 and 1975. We expect a decline in
the importance of agriculture from about 42 % in 1960 to about 29 % of gross domestic
product in 1975. This results from the expected growth of tourism and allied services
and some manufacturing mainly in Barbados. The aggregates are shown in Table 1.2. ii.
British Guiana. Although the national income (in current prices) doubled between 1950
and 1960, there was virtual stagnation in the pe-iods 1954-55 and 1957-59, and the spec-
tacular growth in 1956-57 and 1959-60 was due mainly to expansion in the bauxite industry.
Very few new industries were introduced and the structure of the economy, with its heavy
dependence on sugar and bauxite, altered little in the 1950's. Little change in economic
conditions in British Guiana is predicted and a sectoral growth of 58 % between 1960 and
1975 (at constant prices)is predicted. The importance of agriculture in the product de-
creases from 26.7 % in 1960 to 20.6 %. In Table 1.2. ii the aggregates are shown in total
and per capital form.
Table 1.2.ii
Projected growth of the West Indies economies
1965 1970 1975
Indicator and territory Total Per capital TotalPer capital Total Per capital
Million Million Million BWI
BWI$ BWI$ BWI$ BWI$ BWI$
Consumption by persons:
Jamaica 1,036 595 1,319 701 1,564 763
Trinidad and Tobago 801 840 1,014 924 1,223 968
Leeward Islands,Windward
Islands and Barbados 256 355 310 401 368 443
British Guiana 228 352 264 354 305 355
Total 2,321 571 2,907 646 3,460 692
National income:
Jamaica 1,199 686 1,530 811 1,855 907
Trinidad and Tobago 988 1,436 1,251 1,141 1,499 1,186
Leeward Islands, Windward
Islands and Barbados 278 386 340 440 418 503
British Guiana 285 441 328 441 377 439
Total 2,750 676 3,449 766 4,149 830
Gross domestic product
at factor cost:
Jamaica 1,365 782 1,732 917 1,910 935
Trinidad and Tobago 1,229 1,289 1,558 1,420 1,861 1,473
Leeward Islands, Windward
Islands and Barbados 293 404 357 460 438 527
British Guiana 322 499 372 499 427 497
Total 3,207 789 4,019 892 4,636 928
Long term projections of demand
The final demand has been projected for the food groups cereals, sugar and sugar pre-
parations, roots and starchy vegetables, vegetables and pulses, fruit, meat, fish, milk
and milk products, eggs, oils and fats, and cotton. The average income elasticities for
the various territories under consideration, viz, Jamaica; Trinidad and Tobago; the
Leeward Islands, Windward Islands and Barbados; and British Guiana, have been esti-
mated for 1958 at 0.45, 0.30, 0.45 and 0.30, respectively.
The per capital consumption of food and total demand for future years have been arrived
at on the basis of projected income and population growth. The calorie consumption per
capital per day obtained from above show increases during the period 1958 to 1975, from
2,111 to 2,635 for Jamaica, 2,533 to 3,024 for Trinidad and Tobago, 2,040 to 2,445 for
the Leeward Islands, Windward Islands and Barbados and 2,200 to 2,254 for British
Guiana. The protein and fat contents, for Jamaica only, go up from 56 and 34 grams,
respectively, in 1958 to 70 and 47 grams in 1975 (Table 8).
A summary of the results of our demand projections are shown in Table 1.2. iii.
Table 1.2. iii
Projected summary of amounts demanded, all territories
Commodity 1965 1970 1975
Million pounds
Cereals 963 1,112 1,273
Sugar and preparations 339 391 443
Roots and starchy vegetables 782 865 955
Vegetables and pulses 306 358 416
Fruit 856 1,096 1,269
Meat 154 185 219
Fish 159 184 208
Milk and milk products 285 341 593
Eggs 39 50 58
Oils and fats 110 128 149
Cotton 4 5 6
Long term projections of supply
Examining the economic resources of the West Indies, we found that land was likely to
be the main limiting factor. All regions have a high population density except for the
island of Dominica and British Guiana; although more land could be brought into use in
these two places, a rugged topography and poor soils impose limits on possible develop-
ment in these places where population pressure does not appear to be high.
Although there can be some substitution between products, we also noted that for many
crops the type of land, site factors and climate limit the crops that can be grown. Much
land which can grow bananas is too steep for sugar; much of the acreage under coconut
production cannot grow other crops, and so on; so that although substitution is possible
in better land, much land is most suitable for specified crops.
Although figures of acreage are unreliable, we found considerable increases since 1946
in areas under export crops, particularly sugar and bananas, for which crop output more
than doubled. We found however a slowing down of the rate of increase of production after
1957, and very little growth in output of export crops after that date as compared with the
earlier periods.
We show in Table 1. 2. iv the projected acreage in cropland for the period under review.
Actual limits in the supply of good agricultural land result in projections of a very modest size.
Table 1.2. iv
Projected acreage of cropland, by territories
Territory 1965 1970 1975
1,000 acres
Jamaica 681.6 683.2 685.2
Trinidad and Tobago 355.5 365.8 363.6
Leeward Islands, Windward Islands
and Barbados 320.0 340.0 363.0
British Guiana 458.6 488.6 497.3
Total 1,815.7 1,877.6 1,909.1
In projecting the acreages for sugar, the trend since 1950, which was less steep than the trend
since 1940, was given some weight; but for almost all other crops, particularly tree crops, plant-
ing programmes and available land were the main criteria of projecting acreage increases.
We conclude that, given the characteristics of the high population density in relation to
land resources, there will be considerable pressure in the West Indies for industrialisa-
tion and urbanisation and emigration on the one hand, and for increasing yields on the
other. Population pressure may tend to depress yields by the cultivation of marginal and
sub-marginal land resources; but we believe that the latter will be of importance in the
future period with which we are concerned. The factors which will probably be of most import-
ance in increasing yields are better breeds of plants and livestock and reduction of disease.
Economic factors are also important, but in the West Indies one of the main cost prob-
lems, low labour productivity, is difficult to remedy. It is also probably unfortunate but
true that so long as labour is plentiful and land is scarce, capital will tend to be spent
rather on improving productivity per acre than per man.
As a result of our consideration of acreages and yield factors we project the total sup-
plies of commodities. These are summarized for main commodities in Table 1.2. v.
It will be noted that the rates of growth of production are not high except possibly for
cocoa; the growth rate for this product is approximately comparable to that experienced
by bananas and sugar in the period 1948-60. The products for which the least expansion
is predicted are root crops, sea island cotton, corn and pulses.
Reconciliation of demand and supply and import demand
The reconciliation of demand and supply figures produced data on import demand for
those products that are partly locally produced and partly imported. Import demand in-
formation for commodities that are wholly imported are derived from the demand table.
Import demand is shown in summary form in Table 1.2. vi.
Table 1.2. v
Projection of total production of main commodities, all territories
Commodity Unit 1965 1970 1975
Sugar million pounds 2,913 3,279 3,595
Bananas do. 993 1,101 1,146
Rice do. 471 561 607
Sea island cotton 1,000 pounds 989 739 734
Copra 1,000tons 49 52 58
Cocoa million pounds, dry 35 53 72
Citrus million pounds 656 725 947
Root crops do. 644 651 660
Vegetables do. 182 212 234
Corn do. 44 47 50
Pulses do. 25 25 26
Meat do. 87 105 122
Eggs do. 35 44 55
Milk do. 222 239 257
Table 1.2. vi
Projection of import demand for certain commodities
including interterritorial trade, all territories
Commodity 1965 1970 1975
Million pounds
Rice 192 219 252
Wheat and flour 442 516 589
Copra and meal 56 67 79
Others 128 152 177
Sugar and preparations 4 5 5
Roots 157 213 295
Vegetables, fresh 46 45 75
Vegetables, tinned 13 15 17
Pulses 46 57 69
Apples, pears, grapes 8 9 11
Beef, fresh 17 21 25
Other meat, fresh 17 23 27
Meat, salted and canned 24 28 33
Milk preparations 92 106 122
Cheese 9 11 12
Eggs 3 5 3
Butter 12 15 17
Other oils and fats 11 8 9
Cotton 4 5 6
Part Two
GROWTH OF THE ECONOMIES
Chapter 1
TWO PROJECTIONS OF THE POPULATION OF THE WEST INDIES
BETWEEN 1965 AND 1975
In April 1960, a population census was taken throughout the West Indies. Since fertili-
ty and mortality tables from which more scientific projections could be made are not
available, we propose to offer two very simple projections as to the probable levels of the
population of the West Indies between 1965 and 1975. It cannot, however, be too strongly
stressed that the projections offered in this paper are at best highly provisional and are
not intended to be used as more than provisional first estimates.
According to the 1946 census, the population of the West Indies in 1946 was 2,776,056.
The census taken on 7th April, 1960, showed that the population of the area had increased
to 3,669,528, an absolute increase of 893,472 in 14 years or an intercensal increase of
32.18%.
The individual breakdown of these two census figures is shown in Table 2. 1. i.
Table 2. 1. i
Census population,by territories, in 1946 and 1960
Census
Territory 196
1946 1960
Barbados 192,800 232,085
Jamaica 1/ 1,295,476 1,613,148
Trinidad and Tobago 557,970 827,957
Windward Islands 251,776 314,649
Leeward Islands 102,333 122,920
British Guiana 2/ 375,701 558,769
Total 2,776,056 3,669,528
1/ Estimated as at 31st March, 1946, by the Department of
Statistics. Jamaica was the only one of the above territories
which did not take a census in 1946. Her census taken on
4th January, 1943, recorded Jamaica's population at 1,237,063.
2/ Including Amerindians.
Between these two census years the annual end-of-year population for each of the dif-
ferent territories in the area has been estimated by various official sources as in Table 2a.
Comparing on an overall basis the figures in Table 2a with those given in Table 2. 1. i,
we notice that the 1960 census figure of 3,669,528 is less than each of the end-of-year
estimates since 1957. The discrepancy between the 1957 end-of-year estimates and the
1960 census is 14,859 and by 1959 it rises to 93,942. There are several reasons for this,
but perhaps the most important is the method of computing the annual end-of-year popula-
tion estimates.
Briefly, they have been derived by taking the previous year's population estimate for a
particular territory and adding to it the net increase due to the excess of births over
deaths, and deducting or adding, as the case may be, net migration for the particular
year. So the end-of-year population for any territory in 1950, say, would be computed
as follows:
End-of-yr. pop. (1950) = End-of-yr. pop. (1949) + Net Incr. 1950 Net Migrn. 1950.
The individual estimates for each territory are then aggregated to derive the overall total
for the area for that year.
This method of computing the end-of-year estimates suffers from one very obvious and
basic defect. If the original base of the estimate is wrong or overestimated, as is the
case for some of the territories, then the end-of-year estimates will be out. Naturally,
the error becomes cumulative as we derive end-of-year estimates for any considerable
period of time. It would appear, therefore, from the figures given in Table 2a that most
of the territories have been consistently overestimating their end-of-year population.
So if we are to avoid making the same mistake of using inflated base estimates for future
years, it is necessary to strike out with some new estimates which start from a proper
base. It should be noted, however, that population figures quoted for years previous to
1960 in any part of the text, are the official year end figures.
Data at present available from the 1960 census allow us to attempt only the simplest
projections. We offer two projections which are based mainly on information from the
1946 census and such information from the 1960 census as is available.
Projection 1
The assumptions underlying this projection are quite simple and unsophisticated. From
the figures given in Table 2. 1. i we know that the population of the area increased from
2,776,056 in 1946 to 3,669,528 in 1960, an intercensal period of 14 years. If we assume
that the census population of 2,776,056 in 1946 increased by some constant rate of growth
which, when compounded on an annual basis, would give us the census population of
3,669,528 for 1960, then we can derive a natural exponential function of the form y = aetr,
where a is a constant, e = 2.71828, the base of the natural log, t = 14, the number of
intercensal years and r = the annual compounded rate of growth.
Substituting, we have
14r
2,776,056 e = 3,669,528
14r 3,669,528 1.32185
2,776,056
Slg10 (1.32185) .12123
14r
log10 ( e = 2.71828) .43430
.12123
r 6.08020 019938
which gives us an exponential rate of growth for all the territories of 1.994 %, to three
decimal places, over the intercensal period 1946 to 1960.
If we further assume that this constant annual rate of growth of 1.994 % will continue up
to 1975, we are able, by fitting an exponential curve to our data and extending it to 1975,
to derive estimates of the population between 1965 and 1975. These estimates are shown
in Table 2. 1. ii. We have also included in Table 2. 1. ii estimates of the population of the
area in 1958 as this is the year on which most of our analysis is based.
Table 2. 1. ii
Estimates of the population of the West Indies, 1946,
1958, 1960, and projections. Projection 1
Year Projection 1
1946 2,7,76,056
1958 3,526,600
1960 3,669,528
1965 4,054,900
1970 4,480,100
1975 4,949.800
From these figures we see that the population of the West Indies is expected to increase
from 3,669,528 in 1960 to 4,054,900 in 1965, to 4,480,100 in 1970 and to 4,949,800 in 1975.
This increase is derived from an average rate of growth of 1.994 %, which is not unrea-
sonable for the area as a whole. It is also possible to derive individual growth rates for
each territory.
On the same assumption that the population of each territory increased from its 1946
census to its 1960 census figure by some constant annual compounded rate, we are able
to derive the individual growth rate for each territory in the same way we derived the
average growth rate for the area as a whole.
Using the same equation y = aetr the individual rates of growth calculated to three deci-
mal places are shown in Table 2. 1. iii.
Table 2. 1. iii
Rates of growth of the population of the West Indies, by territories,
between the 1946 and 1960 censuses
Annual compounded
Territory rate of growth
Percent
Barbados 1.325
Jamaica 1.566
Trinidad and Tobago 2.819
Windward Islands 1.592
Leeward Islands 1.309
British Guiana 2.849
Using these individual growth rates we can calculate the population for each territory
between 1965 and 1975 and by aggregating the results derive an overall estimate for the
area as a whole. These individual estimates are shown in Table 2b. For purposes of
c comparison and ease of reference we have also included in Table 2b derived estimates
for each territory for the intercensal years on the basis of the growth rates shown in
Table 2. 1. iii.
When we calculate the individual growth rates and aggregate the results we get esti-
mates which are in excess of those obtained from using the average growth rate. (Com-
p're Table 2. 1.ii with Table 2b.) In absolute terms this difference runs from 8,930 in
19f;5 to 44,570 in 1975. While this difference may appear significant when expressed in
absolu1t terms, it is less than 1 %. This margin of error is undoubtedly due to approxi-
mn:tions in calculation as well as the compounding of the individual growth rates and is not
statistically significant enough to disturb our projections.
Another useful comparison emerges between the totals shown in Table 2a and those in
Table 21) over the intercensal years. In each year the end-of-year estimates given in
Table 2a exceed our derived estimates given in Table 2b. The difference in 1947 was a
little over 57,000 and by 1959! it had increased to 166,300, nearly three times its original
size. This difference can be taken as being indicative, but only roughly so, of the extent
of overestimation in the figures given in Table2a.
Reverting to Table 2. 1.iii, the important point about this table is the different rates of
growth which the various territories show. These vary from 2.849% and 2.819% for
British Guiana and Trinidad and Tobago, respectively, to 1.325% and 1.309% for Barbados
and the Leeward Islands, respectively.
This variation in the growth rates can be explained by the fact that Barbados and the
Leeward Islands, which are traditionally noted as emigration centres, have the lowest
rates of growth, whereas Trinidad and Tobago, which has consistently attracted migrants
from the Windward Islands, has the highest growth rate. This is not, however, the whole
story. Emigration from Barb:dos and the Leeward Islands has usually been to places
outside the West Indies, that is, to places which are not included in our analysis, and the
people who emigrate from these islands very seldom intend to return home except after
some extended duration. Hence they are, in a sense, lost to the area.
In the case of Trinidad and Tobago, migrants have always been attracted to it from the
Windward Islands. They are not really lost to the area since they do not leave the West
Indies. They therefore influence the differential rates of growth by shifting from one
area to another. The point which emerges from this very brief treatment seems there-
fore to be that the different rates of growth registered in Table 2. 1. iii are influenced
more by migration (whether intra- or extra-West Indies) than by differences in the rate
of natural increase for the various territories.
This leads us to the very important question of migration and its probable effects upon
our projections. Past trends of migration are hardly the best indicator of the future pat-
tern of migration since the factors which operated in the past may not operate in the future.
Further, the amount of migration which takes place in any one year depends on such fac-
tors as job opportunities both in the losing and receiving countries, financial resources of
the prospective emigrants, family commitments and social ties, to name only a few of
the factors. All of these make it extremely difficult to hazard any estimates of the future
levels of migration. Nevertheless it is possible within broad limits to discuss the prob-
lem of migration in general terms and in the light of present events come up with some
rough estimates.
Table 2c shows the net migration from each of the individual territories between 1946
and 1960. Although some years are missing for some of the smaller territories, espe-
cially the Leeward Islands, the overall pattern is sufficiently clearcut forourpurposes.
In any case the available data suggest that the most that those missing years would do
would be to accentuate the trend. We see that between 1946 and 1949 the West Indies
were on balance net receivers of migrants, that is, arrivals exceeded departures. We
notice too that this inflow of migrants quickly dried up in 1949 and gave way to a net out-
flow in 1950. The chief reason for the inflow between 1946 and 1949 would appear to be
the return home of many West Indians after the war.
But starting in 1950 there was a definite outflow of migrants, which steadily gained
momentum throughout the fifties. From over 1,000 in 1950 the stream increased to about
40,000 by 1960, if we include an estimate for those islands for which data are not avail-
able. Our present analysis does not allow us to go beyond the bare outline of the prob-
lem and consider the migration from each territory individually, but we see from Table
2c that the amount of migration from the West Indies throughout the fifties was mainly in-
fluenced by migration from Jamafca. The heavy outflow of migrants from Jamaica was
directed mainly to the United Kingdom. As a matter of fact, practically the whole stream
of West Indian migration in the fifties was to the United Kingdom. The stream continued
unabated or rather at an accelerated rate between 1960 and 1962 when the United Kingdom
Government imposed certain immigration restrictions upon Commonwealth immigrants.
We do not have data to indicate the volume of migration which took place from the West
Indies to the United Kingdom between 1960 and July of 1962 when "the ban" was imposed,
but informed opinion seems to incline to the view that the volume was about double that in
1959. What we do know however, is that "the ban" has practically dried up the stream of
emigrants from the West Indies seeking to enter the United Kingdom. So over the next
few years the volume of migrants leaving the West Indies will be considerably reduced
and this will continue until alternative outlets present themselves.
Assuming that no alternative outlets for emigration present themselves to the West
Indians over the next three or four years, that is between now and 1965, we can expect
the volume of emigration to fall to approximately what it was in the very early fifties. If
we assume further that the mounting population pressures operate to open up other coun-
tries to West Indian immigrants after 1965, and that the movement takes a few years to
get into high speed, we can visualise the volume of migration at the end of the sixties and
early seventies as comparable to that of the late fifties and early sixties. What we are in
effect assuming is that the volume of migration in the late sixties and early seventies will
be about the same as that of recent years before "the ban" was imposed. The assumptions
which we make about migration in Projection 1 are therefore that the past rate of migra-
tion will on balance be about the same for the years of our projections and that the accel-
erated rate of recent years will repeat itself after eight to ten years when "the ban" has
worked itself out and sufficient internal population pressures have been built up to neces-
sitate another wave of migration from the West Indies.
In conclusion therefore, we see that the main factors which have determined the rate
of growth of the population of the area offered in Projection 1 are (1) the rate of natural
increase and (2) the volume of migration, both of which are compounded annually in our
calculations. And in so far as it is possible to estimate migration, we have tried to build
it into our projections by compounding its past influence. We offer Projection 1 therefore,
as our estimate of the minimum expected levels of population for the area between 1965
and 1975 on the assumption that the rate of growth of the population will remain constant
at 1.994 % compounded annually, and that the rate of natural increase, though increasing,
will tend to be counter-balanced towards the end of our period by an accelerated rate of
migration. In short, the rate of natural increase and the volume of migration will tend
to offset each other at the overall rate of growth of 1.994 % compounded annually for the
area. In applying population growth to income growth, we have favoured this projection.
However, we present an alternative.
ProJection 2
The basic assumption underlying our estimates offered in this projection is that there
will be no migration out of or into the West Indies over the period of our projections. In
other words, whatever increases there are in the population of the area will be due solely
to the rate of natural increase or the excess of births over deaths. So whereas in Pro-
jection 1 we estimate the minimum expected levels of population of the area based on the
two main variables of the rate of natural increase and the annual volume of migration,
in Projection 2, Table 2. 1. iv, we estimate the maximum expected level of the population
on the basis of natural increase alone. Assuming, therefore, that there is no migration
and that the population of each territory increases over the period of our analysis by the
same average rate of natural increase as for the last ten years, we derive the estimates
shown in Table 2. 1. iv. In other words, we are assuming that the future rate of natural
increase for each territory will be the same as its own average rate for the last decade
compounded annually. In the case of the Windward Islands and the Leeward Islands,
available data did not permit us to go beyond the average rate of increase for the last five
years, so that whereas the rate for the larger territories is the average for the period
1950-59, that used for the Leeward Islands and the Windward Islands is for 1955-59.
Table 2. 1. iv
Estimates of population of the West Indies by territories, 1960 and projections,
and average rate of natural increase 1950 through 1959. Projection 2
Average rate Census Projection 2
of natural in-
Territory ofnatura50 population
crease 1 1960 1965 1970 1975
through 1959
Percent Number Number Number Number
Barbados 2.03 232,085 256,610 283,710 312,370
Jamaica 2.52 1,613,148 1,827,300 2,069,900 2,343,600
Trinidad and Tobago 2.75 827,957 948,660 1,087,200 1,245,700
Windward Islands 1/ 3.07 314,649 365,980 425,710 495,190
Leeward Islands 1/ 2.40 122,920 138,350 155,770 175,370
British Guiana 3.07 558,769 649,950 756,010 874,380
Total 3,669,528 4,186,850 4,778,300 5,451,610
1/ Average for 1955-59.
What we have in effect done is simply to apply the average 1950-59 rate of natural in-
crease compounded annually for each territory to its 1960 census figure to get estimates
of 1965 to 1975.
Comparing these estimates with those in Table 2b we see the disparity is quite substan-
tial but we feel that the two projections offered are sufficiently indicative of the probable
upper and lower limits of the population of the area to be useful for our purposes. So
whereas we offer Table 2b as the minimum level, we use Table 2. 1. iv as the expected
maximum level of the population of the West Indies between 1965 and 1975.
One final point which may perhaps lend cogency to our argument on migration is the
inverse movement of the figures for Trinidad and Tobago. Table 2b, which takes migra-
tion into account, shows larger estimated populations for Trinidad and Tobago in 1965,
1970, and 1975 than are shown in Table 2. 1. iv, which is based on the rate of natural
increase only. Thus, migration as well as the rate of natural increase, is an important
factor in the growth of the population of Trinidad and Tobago.
Chapter 2
THE ECONOMIC GROWTH OF JAMAICA 1950 THROUGH 1960 AND
1965, 1970 AND 1975
Growth of the economy in recent years
Economic growth in Jamaica was phenomenal in the period 1950-60. A visiting econo-
mist in 1961 ranked Jamaica's rate of growth with the three fastest growing countries of
the world. An examination of the sectoral growth pattern indicates, however, that this
growth rate was due to somewhat special circumstances, and that it would be surprising
if such a growth rate continued into the future. A slowing down of the growth rate would
not necessarily be a symptom of decline or instability in the economy; on the contrary,
it might be accompanied by a more balanced advance of all sectors and the greater diver-
sification of the economy. The high rate of growth of the past decade was strongly associ-
ated with the rapid growth of one industry, the mining of bauxite and alumina, which grew
from having no share in 1950 to having an 8 % share of the gross domestic product by
1960. Although this 8 % may not appear a particularly large share, the importance of
this industry in the actual increments to growth in this period is of course much higher
and direct and indirect effects of this industry's expansion probably accounted for at least
20 % of total growth of GDP at constant factor cost.
In contrast, agricultural sectors showed a relatively slow rate of growth in both con-
stant and current prices. The share of agricultural industries in the total product fell
from 27 % in 1952 to 13.5% in 1959. However there are grounds for believing that the
estimates made for agriculture may have been too high in the early period, so the decline
in the importance of this industry may not have been so rapid. Within the agricultural
sector, sugar and livestock showed the biggest absolute growth, but their relative impor-
tance in the economy as a whole still declined.
Besides mining, the industries which have shown the biggest increases are construc-
tion, distribution and services. The construction industry has been affected by important
increases in capital formation, both public and private, including substantial increases in
housebuilding. We shall consider later the relationships between capital and output on a
sectoral basis. Distribution, transport and services have been influenced by the general
increase in economic activity. Services have been expanded by the increasing number of
tourist hotels which came into operation in this period and the increased number of visitors
which has resulted in an increase in the gross domestic product from about J1.5 million
in 1952 to about J5.7 million in 1959.
In spite of the emergence of several new manufacturing industries in this period the
share of manufacturing increased only from 13.2% of the gross domestic product to 14.2%.
This, however, is easily explained and is evident also in other West Indian countries.
The most important industries in the manufacturing sectors are still the older industries
such as the manufacture of sugar, rum and molasses, and soap, oils and other products
from coconuts. These industries have not increased at the same rate as have mining,
distribution and services so that the increases in manufacturing of the non-staple proces-
sing industries only are rather greater than the figures indicate. There is also the fact
to be taken into account that many of the new manufacturers are small industries that do
not employ a large number of people in comparison with agricultural industries. Their
value lies as much in their contribution to employment at the construction stage and in
their contribution to self-sufficiency and diversification as in their actual contribution to
the gross domestic product.
The manufacturing industries which are of most interest in the agricultural context are
those which are concerned with the production of food, drink and tobacco. These indus-
tries are mainly older industries in Jamaica; the most important are sugar and rum-
making, the processing of citrus and the processing of coconut products. In our input-
output matrix for Jamaica, sugar is shown as one sector so that the transactions between
farmers and processors are not indicated. Similarly, citrus growing and processing are
part of the main export sector. In Table 3b, however, which shows the gross domestic
product of Jamaica at factor cost, by industrial origin and at constant prices, we can see
the relative growth rates of agriculture and food, drink and tobacco manufacturing as
compared with other sectors of the economy during the period 1953-59. As will be seen
from the series (Table 3b) all the agricultural sectors increased at a rather slower rate
of growth than did non-agricultural sectors; and, as we would expect from this, the sec-
tor "manufacturing, food, drink and tobacco" increased relatively slowly too. This follows
from the importance of sugar milling and other basic processing industries in this sector.
Export agriculture, for which the figures are fairly reliable, and which in this case
includes the banana, citrus, cocoa and coffee industries and a number of minor industries,
show quite severe fluctuations over the period under review. These fluctuations are also
discernible in the cane series.
The figures for domestic agriculture, and livestock and fishing are less reliable. It
appears that these sectors grew slightly faster than population over this period. It is
possible, however, that most of this growth is attributable to the livestock industry.
Given the unreliable nature of the figures, it would be rash for us to claim that there had
been any marked change either way in the production of roots and vegetables on the whole,
although material collated for our supply projections indicates some increase in vegetable
production accompanied by a small decline in root production.
Although the government sector grew in the period 1953-59, its average annual growth
rate was 6.8% as compared with the 8.8% for the economy as a whole (Table 3b) at con-
stant prices. Salary increases brought the government sector's share of the gross domes-
tic product in current prices from 6.3 % in 1952 to 7.0% in 1959.
Projections for the Jamaica economy 1965, 1970 and 1975
Method. From what has been concluded regarding past growth rates it is evident that
we could not consider a simple projection of these into the future. The period 1958-62
already gives some indication of a slowing down of the growth rate. We do not predict a
continued decline in the rate but rather a levelling off to a rate which, although consider-
ably less than that of the 1950's, will still allow for a fairly healthy growth when measured
in terms of real income per capital.
In order to obtain a full and comprehensive picture of growth factors and their effects
on the economy as a whole a series of inter-industry tables have been developed (Tables
3e. i-iv). These are in respect of the years 1958 (base year), 1965, 1970 and 1975.
The choice of the base year rested solely on the availability of up-to-date. It is as-
sumed in the projections that the price level of 1958 continues. The sectoral breakdown
was made with several considerations in mind: a) the type of transaction; business,
government, households and rest of the world must be separate sectors since their trans-
actions are of a different nature; b) industries mainly exporting were kept separate;
c) industries having reliable information were, when possible, kept separate from those
having unreliable information; and d) industries having opposite trends were not put in
the same sectors when this could be avoided.
Each sector was tackled individually. Past trends were examined. Leading authorities
in business, marketing boards, mining and sugar companies, and government were inter-
viewed, and information was gathered on investment plans and on their general assess-
ment of the future of these industries. On the basis of all these enquiries, growth rates
were estimated for each sector, but these were not necessarily the same annual average
growth rate over the whole period 1965-75.
There were of course some conflicting items when the material was brought together
to form a matrix. To solve these, orders of determination in the economy were consi-
dered. Export sectors are considered the most autonomous, ;hen production sectors and
finally government sectors. In the case of conflict between production sectors for
instance, whether purchases of feeding stuff from the domestic agriculture sector by the
livestock and fishing sector should move at the latter or former sector's projected growth
rates a decision had to be taken as to whether or not the supply-elasticity in the supply-
ing sector is great enough to meet the expanded demand. This is of course a first approx-
imation. It enables us to enter somewhere into the spiral of economic activity. Later
adjustments could be made as better information becomes available.
According to different growth assumptions, different levels of income could be reached;
but we have projected only one set of matrices. Given our actual information, given that
there would be no violent changes in industrial structure, and given that there is to be no
balance of payments problem or excessive foreign borrowing, income growth can only
change marginally from that predicted. The export targets for bauxite and sugar may be
considered too high but this is probably the only sizable variation we can allow for,
given the above assumptions. The summary inter-industry table (Table 3f) is presented
as it enables rough approximations to be made on the effect of any number of alternative
assumptions.
From the main tables we derive gross domestic product, national expenditure, gross
national product and national income (Table 3a). We have put these on a per capital basis
and have used gross national product per head as our income indicator which is applied in
the total demand projections. We feel that in a country where transfer receipts such as
overseas remittances are important household expenditure per head would be a more
relevant indicator. But the difference is not great in Jamaica, and by using gross national
product we conform to common international practice and thus make international com-
parisons more valid.
Sectoral growth rate in Jamaica
The sugar estimates are based on the assumption of exports of 410,000 tons in 1965,
500,000 tons in 1970 and 590,000 in 1975 (all at 1958 prices), plus a small increase in
local domestic and manufacturing use.
The rate of growth projected for the export agriculture sector averages about 3 % per
annum compounded over the whole period (Table 3d).
Figures on which domestic food crops and livestock products are based were derived
from various government departments and from the Sugar Manufacturers Association
Livestock Research Department. Domestic food crops show a very small increase, main-
ly in vegetables. Fruit and roots are predicted to decline. The increase in livestock is
not so fast as in the past owing to limitations in the scope for import substitution arising
in beef, eggs and poultry.
Information for the mining sector was assessed after discussions with leaders in the
industry. The growth rate corresponds fairly closely with estimates recently made by
the Jamaica Government. It approximates to 5.2 % per annum (as compared with an annual
average of 30% in the period 1953-59).
The construction sector is closely bound up with the assumptions regarding gross
domestic fixed capital formation. It will be noted (Table 3c) that our projections for gross
domestic fixed capital formation are J58.9 million (1965), J79.2 million (1970) and
J93.5 million (1975). Net fixed capital formation approximates to J40 million (1965),
J53 million (1970) and J64 million (1975). If we relate total capital formation for the
period 1958-65 to the increment in income for that period we obtain a capital/output ratio
(Total net capital formation 1958-64)
of approximately 3.5, (increment to income 1958-65) as compared with 3.2 in the
(increment to income 1958-65)
period 1956-59. The equivalent ratio for 1965-69 is 3.0. This ratio will become larger
as more capital is needed to provide an increment of say 1% in income, if the marginal
efficiency of capital declines as may well happen if our projections are achieved, by about
1970. On the whole, capital output ratios have not been a useful tool in projecting the in-
come and capital requirements for Jamaica, since sectoral capital formation figures were
not readily available and totals were affected by the peculiar conditions of the expanding
bauxite industry. Where possible, data on public and private investment plans were uti-
lised.
The manufacturing sectors were studied by means of a field survey in which question-
naires were submitted to businessmen. The growth rate in these sectors is based on the
findings of the survey.
Distribution, transport and services are projected to grow in sympathy with the general
growth of the productive sectors. All these, but particularly services, are also influenced
by the size of the autonomously generated tourist industry. This industry's expansion
was assessed partly in relation to past trends and partly in consideration of hotel invest-
ment projects.
We would expect government to become of slightly greater importance in the GDP as
incomes increase; it is projected to grow from 6.6 % in 1958 to 7.3 % in 1975.
The projections shown indicate a real per capital (national income) growth rate over
the whole economy of 3.7% per annum 1958-65; 3.5% per annum 1965-70 and 2.8% per
annum 1970-75.
Our projections do not assume absolutely fixed technical coefficients. For instance,
the relatively rapid increase of the public utilities sector, which includes electricity,
indicates increased mechanisation of industrial processes. We do however assume that
only marginal changes take place in the share of income as between profits and non-profit
income. We have assumed a slight increase in household saving from 6.2 % of household
income in 1958 to 7 % in 1975. We do not, however, predict any significant increase in
the proportion which gross domestic fixed capital formation bears to GDP. Thus shifts
from household expenditure to savings and government are only marginal.
Employment and productivity
If the national income increases from J177,265,000 in 1958 to J386,639,000 in 1975
this is a real increment of JE209,374,000 over the period (since figures are all on 1958
prices). If we assume a regular income earner will earn an average of J400 per annum,
this would permit 523,435 new income earners to be absorbed into the work force given
no change in the income of existing members of the work force. During this period it is
estimated that approximately 480,000 people will be added to the population of which we
might say 60 % or 288,000 were possible job seekers. Thus, although we have not project-
ed growth of the economy of Jamaica at a rate comparable to the last decade, our projec-
tions do allow for modest increases in employment and income plus absorption of the new
labour force resulting from population increase.
Little information is available on productivity in Jamaica and its changes. Compari-
sons with other countries in the production of bananas, livestock products, vegetables
and coffee show an extremely low productivity of labour, but it is probable that Jamaica
is about in the middle of the range of sugar producing countries in this respect. The
growth of the mining industry has almost certainly changed technical coefficients in
Jamaica over the past decade and job opportunities have not expanded at the same rate as
income. While we can predict increases in productivity in the sugar industry consequent
on further mechanisation, which may cause some unemployment, we cannot see very
many material signs that productivity is increasing in agricultural and manufacturing
industries. This is one of the reasons we have favoured predictions of a lower rate of
growth than that which has recently prevailed, and which, while sustaining a fairly well
diversified economy, does not involve greater increases in new manufacturing industries
than in basic agricultural and processing industries. Obviously, radical changes in
technical coefficients could lead to errors in our predictions since the distribution of
income might be radically altered by such changes.
Note. Reference N. 1. 2 (Appendix II) supplied part of the information for this chapter and
Tables 3a-3c.
Chapter 3
GROWTH OF THE ECONOMY OF TRINIDAD AND TOBAGO
Growth of the economy in recent years
The period 1951-59 was one of great expansion in the economy of Trinidad and Tobago.
Gross domestic product at factor cost increased from $308.3 million in 1951 to $788.9
million in 1959, that is, by 156%. The largest single contributor was the petroleum and
asphalt sector, which increased from $93.5 million to $261.4 million during the period.
The manufacturing and the building and construction sectors also made significant contri-
butions to the economy.
The contributions made to the gross domestic product by the various sectors are
shown in Table 2. 3. i for 1951 and 1959. For income, expenditure and product data for
1951 through 1959 see Table 4a.
Table 2 1. i
Trinidad and Tobago: Gross domestic product at factor cost, 1951 and 1959
(current prices) 1/
1951 1959
Sector
SectorMillion BWI$ Percent Million BWI$ Percent
Agriculture 55.6 18.0 98.3 12.5
Petroleum and asphalt 93.5 30.4 261.4 33.1
Manufacturing (including sugar
and rum) 43.4 14.1 103.9 13.1
Transport and communications 10.0 3.2 25.8 3.3
Government 29.2 9.5 65.9 8.3
Public utilities 9.4 3.0 19.4 2.5
Building and construction 8.4 2.7 48.1 6.1
Ownership of dwellings 8.3 2.7 13.4 1.7
Services 50.5 16.4 152.7 19.4
Total 308.3 100.0 788.9 100.0
1_/ See Reference N. 1. 3 (Appendix II).
Source: Data and material developed during the study and other available data.
The territory is now entering an interesting and exciting period of economic and politi-
cal development. At the end of August 1962 the territory achieved independence. This
event also poses serious economic problems. The greatest problem is the implications
of the European Common Market to the future development of the economy and to the oil
industry in particular. Another pressing problem is the future of the sugar industry when
the Commonwealth Sugar Agreement expires in 1969.
On the positive side, keen interest has been shown by overseas investors, particularly
in manufacturing industries and in building and construction.
It is against this background of apprehension on the one hand and sustained optimism on
the other that projections for the economy of Trinidad and Tobago are being made for
the period ending in 1975 (Table 4b).
Sectoral growth rate in Trinidad
a. Petroleum and asphalt
Since 1955 when the first submarine well was completed as a commercial producer,
greater interest has been shown by the oil companies in submarine drilling. Indications
are that this trend will continue because of the decline in the output of land wells and in-
creasing costs in locating additional productive wells on land. The major problem of this
switch from land to marine drilling might be a reduction in the labour force in this sector.
Employment in petroleum and asphalt (mining and refining) decreased from 16,426 in
February 1960 to 15,285 in February 1961. It must not be assumed, however, that this
development was entirely responsible for the decrease in the numbers employed.
Two oil companies have recently substantially expanded their oil refineries and the
total capacity of the refineries is now approximately 120 million barrels per year. Crude
oil will still have to be imported to keep the plants working at capacity, but total importa-
tions will eventually decrease as production increases. It is expected that production of
crude petroleum will increase at the rate of 5 % per annum.
Production of natural gas has increased from 51,742 million cubic feet in 1956 to
97,652 million cubic feet in 1960. The main users are oil refineries, but substantial
quantities are sold to the Electricity Commission, the cement industry and the fertilizer
plant. Plans have been formulated for distributing the gas to various parts of the island
and consequently significant developments can be expected in the near future.
At present, fears are being expressed that the oil industry might suffer severely if a
satisfactory arrangement cannot be made by the United Kingdom Government in the
European Common Market negotiations for protection of the industry. If these fears are
realized the future of the industry will be in great danger.
The growth of this sector is estimated as follows:
1959 1965 1970 1975
Index 100 157 179 196
b. Sugar and rum
Up to 1969 the sugar industry will enjoy the benefits to be derived from the Common-
wealth Sugar Agreement. However, the success of the industry after that date will depend
on the following factors: (a) whether the Commonwealth Sugar Agreement continues,
(b) whether the United Kingdom enters the European Common Market, and (c) whether
the Island is allocated a United States quota.
In view of the uncertainties which surround the sugar industry at the present time it
is not unrealistic to be somewhat pessimistic about the future of the industry.
It is not expected that production within the near future will exceed the record 1961
crop of 245,700 tons. It is, however, anticipated that local consumption will increase,
both for household and manufacturing requirements.
The projections for this sector are:
1959 1965 1970 1975
Index 100 126 134 140
c. Agriculture
The relative contribution of this sector to gross domestic product decreased from
18.0% in 1951 to 12.5% in 1959. In absolute terms, however, it increased by BWI$42.7
million during the period.
The major commodities entering the export market are cocoa, citrus and coffee.
Exports during the period 1958-60 were as follows:
1958 1959 1960
Commodity Q V Q V Q V
Cocoa 18.2 12.7 15.9 10.1 15.9 8.7
Citrus 1/ 23.6 1.9 N. A. 0.7 25.8 1.6
Coffee 4.5 2.0 5.4 2.4 4.1 1.3
1/ Fresh fruit only.
Source: Data and material developed during the study and other available data.
Q = million lbs. V = BWI$million.
In spite of government subsidies to agriculture, especially for cocoa and coffee, pro-
duction has not increased as rapidly as had been anticipated because adverse weather
during the past five years destroyed many of the cocoa seedlings distributed to farmers.
It is, however, expected that production will show an appreciable increase when the re-
maining new clonal plants come into bearing.
Weather likewise affected the output of the citrus. However, as a result of the citrus
agreement negotiated between the West Indies citrus producing territories and the United
Kingdom Government, it is confidently expected that citrus production will increase sig-
nificantly during the next few years. Exports of fresh grapefruit may decline because
more emphasis might be placed by the Citrus Growers Cooperative on exporting canned
grapefruit segments rather than the fresh fruit. The segment plant commenced produc-
tion in 1962 and it is not yet possible to determine what degree of diversification would
result.
Assuming that the drought will not continue, it is expected that the output of the above
products will be as follows:
Commodity 1965 1970 1975
Million pounds
Grapefruit 142 168 192
Oranges 46 74 84
Cocoa 21 24 30
Coffee 8 11 13
Bananas are not now a major export crop; in 1960, exports totalling 9 million pounds
were valued at $0.5 million. This crop, however, has great potentialities in Tobago.
Minor export crops, such as tonca beans and rubber, are not expected to increase ap-
preciably.
It is not expected that the acreage under sugar cane cultivation will be increased to any
great extent. There will most probably be a reduction in the acreage cultivated by estates
and an increase in that planted by farmers. However, the position might change if the
island receives a substantial United States quota.
For further discussion of considerations influencing exports of agricultural and domes-
tic food crops see part four of this report.
Quarrying is expected to grow to keep pace with the building programme. However,
some of the limiting factors are inadequate distribution and the lack of efficient capital
equipment.
The projections for this sector are as follows:
1959 1965 1970 1975
Index 100 154 194 232
d. Manufacturing
The manufacturing sector has increased rapidly within recent years because of in-
creased production and addition of new industries. As a result, a wide range of products
are now being manufactured for local consumption and the export market. Pioneer indus-
tries have made a great contribution to this increase.
The 1957 Census of Industry revealed that the gross output of pioneer industries in-
creased from $5.2 million in 1953 to $23.1 million in 1957. Since the 1957 census several
industries, including the fertilizer industry, have been granted pioneer status, and sig-
nificant increases are expected. As of December, 1961, 79 pioneer establishments were
in operation.
Projections for this sector were based on expansion plans announced by some of the
large firms as well as information obtained from the Industrial Development Corporation
on industries applying for pioneer status. Assumptions were also made concerning in-
creases which might be expected as a result of the growth of other sectors. The index of
growth is as follows:
1959 1965 1970 1975
Index 100 197 257 308
e. Transport and communication
The transport problem in the islands is very perplexing and within the past five years
has been investigated by commissions and consultants appointed by government.
The serious defect in the system is the competition between the "route" taxis and the
buses and railways (including in the public utilities sector). The latter modes of trans-
portation annually incur a deficit. There are other contributing factors, but competition
is considered to be the principal reason. Some of the remedies suggested are: (a) zon-
ing the "route" taxis, (b) limiting the number of such taxis. It must also be stated that
the increase in the number of motor vehicles (in 1960 the total motor vehicles licensed
were 40,988 compared with 35,536 in 1959) poses a serious traffic problem. An early
solution to the problem is necessary.
British West Indian Airways, which has recently been acquired by the government,
remains in this sector as there may be changes in ownership or partnership during the
period covered by the projections.
In spite of the difficulties discussed above, the transport system will continue to grow,
not only to accommodate the expansion in the productive sectors but also because of conti-
nuing government activity. It will also be enhanced by the increase in population as well
as its mobility.
Finally, in assessing the projections indicated below, consideration must be taken of
the fact that transportation carried out on their own account by enterprises is excluded.
The index of growth is as follows:
1959 1965 1970 1975
Index 100 130 160 198
f. Building and construction
The inadequacy of private housing constitutes one of the most pressing problems facing
the country. The Housing Census of 1957-58 revealed that of the 161,000 housing units
in Trinidad and Tobago, 69,000 (43 %) were grossly overcrowded, that is, with four or
more persons per bedroom. Included in this number were over 43,000 units (27 % of all
units) in which there was no separate room for use as a bedroom.
The Housing Census also indicated that 66,700 dwelling units or 42 % of the total were
neither grossly overcrowded nor of poor quality. Of the remainder, 30,900 units or 19 %
of the total were in good condition, but were overcrowded. It may therefore be taken that
approximately 63,000 units were in poor condition; that is, they needed to be pulled down
and replaced. There was a great deal more overcrowding in "poor" than in "good and
fair" units, 60 % of the "poor" units being overcrowded as compared with only 32 % of the
"good and fair" units.
It has been estimated that a minimum of about 7,000 units are required annually to take
care of population growth within the country, but the annual net addition to the stock of
housing is only of the order of 2,000 units.
The government, in order to alleviate the position, is directly engaged in developing
housing schemes and also assists in construction projects, as for instance through aided
self help schemes. In addition, various concessions have been offered by the government
to enterprises willing to embark upon the construction of houses.
In making projections for this sector, the acute housing shortage has been taken into
consideration. Construction work done by the sector (excluding construction carried out
by government labour and by enterprises on their own account) is expected to be as
follows:
1959 1965 1970 1975
Million BWI$
Total 79.2 145.7 194.2 236.9
Households 19.4 37.5 51.2 75.7
Government 15.8 50.9 68.1 64.8
It must, however, be borne in mind that receipts from government are not exclusively
used for the construction of housing.
The increased activity in the other sectors is likewise reflected in this sector:
1959 1965 1970 1975
Index 100 184 245 299
g. Public utilities
The main source for the projections of electricity were the report on "A Commercial
Approach to Rural Electrification" and "Tobago Review of Past Operations Together
With Projections Until 1972. Varying rates of growth were assumed for the several
consumers; however, domestic consumption and consumption by manufacturing industries
predominate.
The overall rate of growth for electricity to be generated was taken at approximately
13% per annum.
Projections for Port Services relied heavily on the Hedden Report on Port Administra-
tion and Development, which made several recommendations for the reorganization and
development of the port. It is expected that as a result of this reorganization Port
Services will become self-supporting. In 1959 it incurred a deficit of BWI$2.6 million.
It was assumed that the railways will continue to run at a loss.
h. Government
When this study was being undertaken the government's new Development Programme
(1963-67) had not yet been finalised. Consequently many assumptions had to be made about
the level of government expenditure and the allocation of such expenditure.
As it is the government's policy to make a serious attack on the problem of unemploy-
ment, it can safely be assumed that expenditure under the new programme will be not less
than that of the previous one. The second assumption which had to be made was that
government's expenditure must increase to maintain the results of the last programme,
such as maintenance of roads, education and social services generally.
It is believed that the emphasis of the new programme will be on building and construc-
tion. The reasons are (1) that this will alleviate the serious housing shortage, and
(2) that this type of expenditure will generate employment principally in the manufacturing
and household sectors and thus will have an impact on other sectors.
In line with the foregoing assumptions, the index of government's expenditure will be
as follows:
1959 1965 1970 1975
Index 100 195 251 303
In order to achieve these goals, government will have to resort to some of the following
sources for revenue: (1) increased taxation, (2) expenditure from surplus balances,
and (3) borrowing. However, if government goes through with its plan for a 50-50 share
of the oil companies' profits (negotiations are now taking place between government and
the oil companies) there will be a substantial increase in government revenue.
The economy 1959-75
Table 4c shows that the gross domestic product at factor cost will increase from
BWI$ 788.9 million in 1959 to BWI$1,861.4 million in 1975, an increase of 136 %. If we
examine the growth in three stages, it will be noticed that the period 1959-65 is one of
great expansion and then there is a decline in the annual rate of growth:
1959-65 increase of 65%
1965-70 increase of 27%
1970-75 increase of 19%
The oil companies have not yet announced whether they will undertake large-scale develop-
ment during the period 1965-75, but if they do the previous rate of growth might be main-
tained.
Method
The inter-industry table for 1959 (Table 4d. i) was constructed from the Trinidad
National Accounts worksheets. (See Tables 4d. ii, 4d. iii, and 4d. iv for projected years.)
The published National Income Report 1/ follows the U. N. system, but the worksheets
contain sector accounts and hence there was no problem in constructing the basic table.
The accounts, however, include capital as well as current expenditure and it was not pos-
sible in all cases to allocate the capital expenditure to the various sectors. It was there-
fore decided to construct the inter-industry table on the same basis as the U. S. A. and
Dutch models. An attempt was made to construct a capital input/output table but this
was discarded because of the above-mentioned difficulties.
The worksheets existing at the time dictated the number of sectors to be selected.
The major sectors, such as petroleum and asphalt, sugar and rum, manufacturing and
building and construction are reliable. The components of the services sector vary in
reliability and it was not possible to construct a distribution sector from the information
available. The sector accounts are now being expanded and it will be possible in the near
future to construct an 18-sector matrix.
Besides the production sectors described above, two other sectors require some
description. The profit appropriation sector shows on the receipts side the inflow of
gross profit. On the payments side the main outlays are (a) payments to government
for company taxes; (b) payments to households as distributed profit; (c) payments to
the rest of the world for the distributed profits of expatriate firms; and (d) payments to
the savings and investment account for undistributed profits.
The capital account shows the financing of capital formation. It includes also a resid-
ual item representing capital inflows and savings of locally owned corporations. A large
proportion of the capital inflows would be the reinvested profits of the oil industry.
1/ Reference N 1. 3, Appendix II.
Constant price estimates (1951 prices) exist but only for the expenditure side of the
gross domestic product. The data in Table 4d. i to iv are at 1959 prices but it was not
possible on all occasions to eliminate the price element. A great deal of information is
collected annually (for example, growers' and retail prices, wage rates, export and im-
port prices); consequently, it is not felt that the errors involved in eliminating the mone-
tary movements are large.
Chapter 4
GROWTH OF THE ECONOMY OF THE LEEWARD ISLANDS, WINDWARD
ISLANDS AND BARBADOS 1/
Growth of the economy in recent years
Source information is rather scant for this region, so we have presented two main
tables only. Table 5a gives a summary of the gross domestic product, national income
and national product for the whole region for the years 1959, 1965, 1970 and 1975.
Table 5b shows the industrial origin of gross domestic product on an island basis.
The rate of growth predicted for these territories works out at approximately 2.8% per
annum throughout the period. In spite of the fact that both sugar and bananas must be
projected at a declining growth rate (see part four) we do not predict a declining growth
rate for this region as a whole, for the following reasons.
The smaller islands have not experienced a growth rate comparable with that of Jamai-
ca and Trinidad and Tobago during the past decade although most territories have shown
positive growth in terms of per capital real income. They are, however, at present ex-
periencing a lower per capital income than the larger islands and for that reason may be
capable of higher rates of growth in the future. We believe also that political uncertainties
caused by the breaking up of the larger federation and the difficulties of forming the
smaller federation have tended to inhibit growth. If the smaller federation materialises,
it should do much to increase stability and to encourage investment. Our projections are
based on limited agricultural expansion and on a rather greater expansion in tourism
and secondary industries and in distribution, commerce and transport and other service
industries.
Table 5b is intended to provide a picture of growth by sectors and territories and can
best be used to illustrate a description of the individual economies and the projections for
the future.
Future growth in Barbados
Barbados is the most important of these economies, having in 1960 approximately one-
third of the population of the group and rather more than one third of the national income
1/ Some source material for data in this chapter and Tables 5a and 5b can be found in
References N 1. 4, N 1. 5, and N 1. 6, Appendix II.
of the group. Barbados has, besides a very important sugar industry (see part four), a
number of manufacturing industries and a growing tourist industry, it being estimated
that tourists now spend there about BWI$15 million annually.
The Barbados economy showed little growth in the period 1955-60 and our projections
after 1965 are rather more optimistic than experience of past periods might suggest. We
believe, however, that the period 1955-60 has been an unlucky one for the sugar industry
in that climatic and other factors have been against expansion. The basis of our projec-
tions for sugar are explained elsewhere. Yield increases in Barbados in the forthcoming
period are expected to play an important part. Even so, we cannot predict, with the very
limited availability of land in Barbados, that expansion of sugar will be a major factor in
future growth.
In Table 5b it will be noted that importance is given to the expansion of the manufactur-
ing and mining, construction, distribution, commerce and transport, services, and
government sectors. We base the expansion of these sectors on two main assumptions.
First, if Barbados becomes the seat of a new federal government for the area, weconsid-
er that this in itself will lead to the expansion of the construction and government sectors.
If the federation is accompanied by a customs union as has been assumed we believe that
Barbados will obtain a number of manufacturing industries catering for the enlarged mar-
ket and will also benefit from increased distributive and warehouse activities. The second
assumption is that there will be a very considerable expansion of the tourist industry
throughout the region and that, in Barbados, the services, distribution, commerce and
transport sectors in particular will benefit from this.
If the proposed federation of the Leeward Islands, the Windward Islands and Barbados
materialises we should therefore expect very considerable effects on all the economies
but in particular on the economy of Barbados. We should not, however, expect the influ-
ence on Barbados to be very spectacular by 1965 and up to that year we have projected a
rate of growth (Table 5b) that is not significantly greater than that demonstrated during
the period 1958-62 when Barbados experienced a growth rate, in terms of real per capital
income of only about 1 % per annum. After that period we expect that, unlike Jamaica
and Trinidad and Tobago, Barbados will have an increasing rate of growth.
The Leeward Islands are still mainly dependent on sugar, although in recent years
tourism has become a very important industry in Antigua. In Table 5b it will be noted
that sugar (the main commodity of export agriculture) is expected to increase somewhat
from 1960 (which was a relatively poor year) but is not expected to register very signifi-
cant increases either in St. Kitts or Antigua after that. The other important crop in ex-
port agriculture in the Leeward Islands is cotton but, as is explained in chapter 4, no
brilliant future is predicted for that crop.
Antigua experienced during the period 1955-1960 the fastest growth rate of any of the
smaller islands. The cause of this was the emergence of an important tourist industry;
during this period the number of visitors increased from approximately 3,000 in 1955 to
about 20,000 in 1960, and in 1960 it was estimated that visitors spent about BWI$ 5 million
in the island. By now the contribution of tourism, in terms of foreign currencies earned,
exceeds that of sugar in this island. Sugar, however, still contributes somewhat more to
local incomes, owing to the high import content of tourist expenditures. Secondary
industries in the Leeward Islands have been insignificant to date (if we include sugar mil-
ling as part of the primary sector) but a number have been discussed, and although we
cannot make any firm predictions we have assumed some developments in industry both in
Antigua and St. Kitts-Nevis-Anguilla.
Montserrat, the third of the Leeward Islands administrations, has been a declining
economy consequent on the falling off of the sea island cotton industry and due also to the
heavy migration of people of working age. A small number of export bananas are grown
there, but are taken to Dominica for reshipment as they are not sufficient to justify a ship
calling there. In 1960, a plant was opened for making tomato paste and this has greatly
stimulated the cultivation of tomatoes, for which Montserrat is noted; but as these have
generally found a good market as fresh fruit, the plant has been undersupplied. Generally
speaking one can predict little likelihood of cure for the economic malaise which appears
to have overcome this island, so long as migration continues, as it no doubt will continue
if better work opportunities are not forthcoming. Montserrat has a high livestock popula-
tion and it may well be that, given a small work force, it is in such products that her best
chances lie.
It will be noted in Table 5b that in the Leeward Islands we predict the biggest increases
in the sectors of distribution, commerce and transport, services, and construction.
This is because we predict a continuation of tourist development in Antigua, and its likely
extension to St. Kitts, Nevis and Anguilla, all of which have considerable unutilised beach
resources.
Future growth in the Windward Islands
In the Windward Islands much the same pattern can be seen, except that the main ex-
port crop, bananas, is capable of gaining a rather greater expansion in acreage than su-
gar in the Leeward Islands. This is particularly so in Dominica and St. Lucia (for de-
scription of factors affecting supplies of bananas see part four). The Windward Islands
have a much more important domestic subsistence economy than have Barbados, Antigua
or St. Kitts-Nevis-Anguilla and are exporters of these products to other territories of the
group and also to Trinidad and Tobago. As noted elsewhere, it is believed that production
of domestic food crops has been reduced by migration and also by competition from
banana production. In spite of the probability that these trends will continue we consider
there will be a small growth in the non-export agricultural sectors; this prediction is
based on the belief that if the federation of the Leeward Islands, the Windward Islands and
Barbados comes into being and there is a customs union, the food producing areas will to
some extent complement the sugar producing and more urbanised areas, and the expan-
sion of domestic supplies might even reduce imports of such products as meat and dairy
products. This pattern of change has already made some headway in Jamaica.
After bananas, cocoa is one of the main exports of this region and, as is explained in
part four, a fairly rapid expansion is predicted for this crop. In Grenada, spices such
as nutmeg and mace are important exports. Some expansion is predicted for these prod-
ucts but it is probably limited by the fact that they tend to grow best under a fairly in-
tensive type of peasant cultivation and suffer competition from such crops as bananas and
cocoa, which may not be more profitable than spices but have more stable prices in
world markets.
In the islands of Grenada, St. Vincent and St. Lucia, we have predicted some increase
in tourism. St. Lucia appears to offer the most promise for this industry, but Grenada
is probably the most advanced at the moment and there are already several tourist type
hotels there. The Grenadines, a small string of islands between Grenada and St. Vincent,
offer almost unlimited tourist potential and some developments may well occur there
during the period with which we are concerned. One of the limiting factors in the Wind-
ward Islands has been inferior airports and air services. Both Barbados and Antigua
have international airports, and it is easy to see that tourism in both islands has benefited
from this. Dominica is an island of rugged grandeur, but owing to the lack of beaches
and areas suitable for water sports, it appears that tourism will develop there on a rather
more limited scale than in the other three Windward islands.
Conclusion
Our projections for all these islands are thus based on the assumption that the federa-
tion of the Leeward Islands, the Windward Islands and Barbados will materialise. 2/
Following this we expect a small expansion in domestic agriculture and a rather greater
expansion in domestic industries and services. We except services and construction in
particular to be affected by a predicted expansion of tourism. Regarding the export sec-
tors, we find that in the Windward Islands there is some scope for developing more bana-
nas, cocoa, and probably other fruit crops; at the moment they probably have more un-
exploited resources than other West Indian islands. We do not expect a very spectacular
increase in the export sectors of those islands that specialise in sugar production.
The predicted growth of the respective economies, which serves to illustrate the points
made above, is shown in Table 2. 4. i.
Table 2.4. i
Leeward Islands, Windward Islands, and Barbados: Predicted growth indicators, 1960 base,
1965, 1970, and 1975
Area 1960 1965 1970 1975
Indices
Barbados 100 116 147 201
Antigua 100 138 162 174
St. Kitts-Nevis-Anguilla 100 131 157 175
Montserrat 100 111 115 118
Grenada 100 122 151 174
St. Lucia 100 129 152 181
St. Vincent 100 121 139 166
Dominica 100 123 135 151
The Leeward Islands, the Windward Islands
and Barbados 100 122 149 183
2/ There appears to be some likelihood that Grenada will join in a unitary state with Trinidad
and Tobago. For the present we have included Grenada with the other smaller islands.
Chapter 5
LONG-TERM ECONOMIC GROWTH OF BRITISH GUIANA
Growth of investment, 1950-60
The post-war development in British G'iana began with financial assistance under the
Colonial Development and Welfare Act of 1945. With the help of Colonial Development
and Welfare Act grants and loans, the government of British Guiana embarked upon de-
velopment planning. A 10-year Development Plan for 1947-56 (Ref. N. 1.9, Appendix II)
was drawn up in 1947 and revised comprehensively in 1950 providing for an expenditure
of BWI$28 million. Itpeteredout in 1953, and the government launched a 2-year pro-
gramme for 1954-55, with a planned expenditure of BWI$44 million. This was to be the
forerunner of a long-term programme based on recommendations of the International
Bank for Reconstruction and Development Mission (Ref. N. 1. 10). However, during
1944-45 only BWI$26 million could be spent. The long-term programme was then formu-
lated for 1956-60, and later revised to 1956-59, at a total expenditure of BWI$91 million
(later revised to BWI$103 million), of which only BWI$ 77.5 million was spent till the end
of 1959 (Ref. N. 1. 11). Finally there is the Development Programme 1960-64, based on
the Berrill Report (Ref. N. 1. 12) at the total cost of BWI$110 million. All these develop-
ment plans are oriented towards laying basic services, viz., sea defences, drainage and
irrigation, roads and other means of transportation and communication which are essen-
tial to economic development. Programmes for geological surveys, research and experi-
mentation for diversification of agriculture, extension of available credit facilities and
some social welfare have also been undertaken.
Apart from agriculture, where drainage and irrigation schemes provided expansion
facilities, all other producing activities have been left to the private enterprise to develop.
To attract entrepreneurs the government has been giving since 1951 considerable income
tax and import duty concessions, e. g. tax-holiday for five years from the date of produc-
tion, generous depreciation allowances, duty-free imports of machinery, building mate-
rials, etc. for factories, hotels and so on. British Guiana is, however, very much de-
pendent on foreign private capital. In the absence of a money market in British Guiana,
all of the local savings cannot be aggregated for fruitful investments, and the tendency of
the local people is to invest their small savings abroad.
Table 2. 5. i shows the gross fixed capital formation in British Guiana during 1950-60.
The government development fund was established in 1954, therefore comparable
figures for earlier years are not available. The large amounts of private overseas capi-
tal invested in 1951 and 1957-59 are mainly due to expansion of the mining industry, es-
pecially for bauxite, and in recent years for alumina.
Table 2. 5. i
British Guiana: Gross fixed capital formation, 1950 through 1960 (current prices)
Yr Total gross Private Government
Year fixed capital overseas capital development fund
expenditure
BWI$ 1,000
1950 27,400 8,600 -
1951 30,100 18,600 -
1952 25,856 6,541 -
1953 26,871 5,028 -
1954 36,116 6,865 8,608
1955 45,458 5,267 17,522
1956 48,000 6,753 20,559
1957 61,490 29,917 18,310
1958 60,865 16,179 19,881
1959 59,066 22,065 18,998
1960 77,895 N. A. 15,801
Source: Data and material developed during the study and other available data.
Growth of income, product and expenditure, 1950-60
Although the national income (at current prices) of British Guiana in 1960 was double
that of 1950, there was virtual stagnation during the periods 1954-55 and 1957-59. From
the table of income, expenditure and product (Table 6a) it may be seen that even though
the gross fixed capital formation has shown a substantial increase from 1954 onwards,
due to large increases in imports of capital goods and net factor payments abroad as the
returns of the invested overseas capital, the national income has not shown any appreci-
able increase. The spectacular leaps of the economy between 1956 and 1957 and between
1959 and 1960 have largely been due to expansion of the bauxite industry. On the other
hand, the poor agricultural crops in 1954-55 and 1957-58 and the fall in world prices of
bauxite during 1958-59 caused the stagnation in those years. The economy is also very
heavily oriented to foreign trade. The exports mainly consist of food and crude materials,
rice, sugar, bauxite and forest products. The major imports are manufactured goods
and machinery and transport equipment closely followed by miscellaneous manufactured
articles, food and animal feeds. An examination of detailed foreign trade statistics
clearly reveals the basic characteristics of a poor, underdeveloped and imbalanced econ-
omy, i. e. importation of all manufactured and processed goods in exchange for agri-
cultural products and raw materials. British Guiana has, however, enjoyed in the past
fairly favourable terms of trade because of guaranteed markets in rice and sugar and
large demands for bauxite and forest products, and this has sustained the economy to a
large extent.
Very few new economic enterprises were introduced in British Guiana during the 50's,
except for beer, margarine and boat building, and the percentage distribution of GDP at
factor cost by industrial origin (Table 2. 5. ii) shows that the structure of the economy did
not change in any appreciable manner between 1952 and 1960, except for the growing im-
portance of the engineering and the building and construction sectors.
Table 2.5. ii
British Guiana: Gross domestic product at factor cost by industrial origin,
1952, 1956 and 1960
Sector 1952 1956 1960
Percent
Agriculture 24.46 18.18 19.60
Livestock, forestry and fishing 7.97 7.13 7.65
Mining 8.62 11.30 8.57
Food processing 10.86 8.04 7.68
Chemicals (incl. other manufactur-
ing and fuel and power) 3.80 3.16 3.39
Engineering (incl. building and
construction) 6.23 10.32 11.24
Distribution 13.04 14.64 14.56
Transport and communications 6.17 6.58 7.03
Banking and insurance 2.45 1.93 3.11
Professions and personal services 2.33 2.84 6.06
Rent of dwelling 3.83 2.63 1.28
Government 10.24 13.25 9.83
Total 100.00 100.00 100.00
Source: Data and material developed during the study and other available data.
The major components in the producing sectors of the British Guiana economy are
sugar (cane production and milling), mining, rice (cultivation and milling) and forestry.
These activities are growing apace with the expanding economy. But other industries,
viz, fisheryand all manufacturing activities, are still in their early stages and thus have
little impact on the whole economy.
Since it is not possible to measure the real national product of British Guiana due to
lack of proper price indices, a comparison of household net income (personal current ex-
penditure plus savings) at constant prices might throw some light on the real growth of
the economy. The figures for per capital household net income (Table 2. 5. iii) show that,
because of increases in prices and population, the almost doubled total household net
income from 1950 to 1960 does not mean any appreciable increase in economic well-being
of the people.
The economy of British Guiana has had some very severe drawbacks: (1) capital re-
sources are invested in primary industries of rice, sugar, forestry and mining, whereas
manufacturing industries are grossly neglected, (2) the proportion of land and labour
Table 2. 5. inl
British Guiana: Per capital household net income 1948 through 1960 (at 1959 prices)
Household consump- Household Household l Household Population Per capital
Cost of living index
Year tion expenditure savings net income net income (including net income
(current price) (current price) (current price) (1959 = 100) (at 1959 price) Amerindians) (at 1959prices)
BWI$1,000 BWI$1,000 BWI$1,000 BWI$1,000 Number BWI dollars
1948 87,300 4,800 92,100 66.1 139,334 406,045 343
1949 96,400 4,400 100,800 69.3 145,455 417,736 348
1950 108,100 4,500 112,600 75.2 149,734 428,005 350
1951 120,200 6,400 126,600 81.2 155,911 439,871 354
1952 129,987 7,380 137,367 89.6 153,311 452,643 339
1953 136,087 14,316 150,403 89.9 167,300 465,420 359
1954 143,692 21,993 165,685 92.6 178,925 479,024 374
1955 146,222 14,246 160,468 95.3 168,382 493,069 341
1956 158,493 16,541 175,034 97.0 180,447 507,408 356
1957 167,395 14,091 181,486 98.4 184,437 523,497 352
1958 172,119 12,233 184,352 98.3 187,540 540,718 347
1959 178,186 16,777 188,963 100.0 188,963 559,074 338
1960 191,770 21,902 213,672 100.3 213,033 574,578 371
Sources:
1. Household Net Income:
2. Cost of Living Index:
3. Population %end year):
1948-51: Percival and D'Andrade; Personal expenditure + savings.
1952-56: O'Loughlin; Consumption expenditure + savings.
1957-60: Kundu; Consumption expenditure + savings.
1948-56: Annual Report of Dept. of Labouri Georgetown working class cost of living indsces (base 1938 100) adjusted
to British Guiana consumer price index (base 1956 = 100).
1956-60: Quarterly Statistical Digest, Statistical Bureau, British Guiana; British Guiana consumer price index (base
1956 = 100).
1948-60: Data finally adjusted to base 1959 = 100.
Natural increase of Amerindians and other population and migration data, 1946-54; Annual Reports of Registrar General,
British Guiana.
Population, Amerindians, 1957-60, British Guiana, 1957-60, Colonial Annual Reports.
Population, others and migration 1955-60, Quarterly Statistical Digest, Statistical Bureau, British Guiana.
1948-60 data obtained by adjusting 1957-60 Amerindian and other population figures with the help of natural increase and
migration data. A check with 1946 and 1960 census figures has shown an excellent fit; in fact the error is within a few
hundreds of census figures.
employed for nationaloutput is rather SmsaLk as rmost of the ecoomit activities are con-
centrated on coastal land and euemployment is aboat 16% of the total labour force,
(3) public overhead capital investment is very high, due to the necessity of tmaintaiting
and building sea defences, Toads, and drainage ad irrigation systems, (4) credit facili-
ties are inadequate and expensive for smaI entrepreneurs, and (5) government's social
welfare expenditure, ainly in medical and educational facilities, is too little due tb in-
adequate revenue receipts. partly because of the tax-holiday granted to new enterprises.
Hence, unless government and private enterprise co-operate in an all out effort for rapid
economic growth, it is very difficult to see how British Guiana can break away from her
virtual economic stagnation. But the recent political strife in the country is frightening
away investment of private capital.
Changes in productivity
The estimation of labour productivity in the econmy of British Guiana cannot be fully
undertaken due-to lack of detailed data. However, on the basis of the four major indus-
tries rice, sugar, bauxite and-timber -the average annual compounded rate of producti-
vity increase may be estimated at 2.3 %for the period 1954-60.
ThiE rate of 2.3 %m ust be considered as an upper limit for the economy as a whole
Since other sectors of the economy, particularly the professions and personal services
sector, will have a considerably lower rate. Again, as British Guiana is inclined to de-
velop and diversify the agriculture .sector, especially rice, and expansion is anticipated in
manufacturing sectors, which will be quite new to the labour force, the labour productivi-
ty will probably show some decline in the near future.
Growth of income, product and expenditure, 1960-75
The future of the economy of British Guiana is very much of an unknown quantity due to
the political turmoil, dependence oo foreign public and private capital and the fluctuating
past trend of the economy as a whole.
The method of economic projection has therefore been simply to Freondl between
gross national product (~1iP) projection on the basis ofla iscreasp in the labour fo re and
productivity and a sectoral growth projection arrived at from the past trends and future
development programmes. The finally accepted projection is subjected later on to a
feasibility test on the basis of an inter-industry table for 19.59 Table 6c),
Table 2. 5. iv shows the three projections of the economic growth of British uiana for
1960-75.
For the GNP blow-ups, the maximum estimate is based on annual creases of labour
force participation at 3.075% and productivity at 2.3 %. The labour force hase. bn eti-
mated on the basis of the high rate of population growth of 3.07 % annually, together with
.005 % of extra employment for the back tog of unnemployn p9ppley, so ha t the rat~o of
unemployment to total labour force will be ahout 6.5 % in 1e75 as compared with 1l % in
1956 or 1960. On the other hand, the minimum estimate is based only ao the low rate of
population growth of 2.849% annually, ignoring any extra employment and productivity
increase.
For the sectoral growth estimates, a detailed analysis has been made of the various
economic activities. Apart from government development programmes and policies, the
private entrepreneurs have also been approached to indicate their expansion and invest-
ment intentions. The sectoral domestic outputs are shown in Table 2. 5. v.
Table 2. 5. iv
British Guiana: Economic growth, gross national product estimates,
1960 and projections
Item 1960 1965 1970 1975
Percent
Gross national product blow-up:
maximum 100.0 130.4 169.9 221.5
Gross national product blow-up:
minimum 100.0 115.3 133.0 153.0
Sectoral growth 100.0 119.6 137.8 158.0
Table 2. 5. v
British Guiana: Estimated sectoral domestic outputs, 1960 and projections
(at 1960 prices)
Sector 1960 1965 1970 1975
BWI$ 1,000
Agriculture 79,b28 90,209 97,830 102,821
Livestock, forestry, and fishing 25,044 35,604 44,862 55,777
Mining 41,216 55,375 60,370 67,873
Food processing 114,359 131,274 141,340 148,076
Chemicals 3,776 5,213 6,214 7,233
Engineering 2,572 2,689 4,137 5,585
Other manufacturing 17,503 22,797 34,312 50,811
Fuel and power 3,558 6,109 8,852 12,850
Distribution 51,725 59,604 68,674 78,861
Transport and communications 30,319 35,472 40,622 46,341
Banking and insurance 9,846 13,258 17,457 22,551
Professions and personal services 25,567 33,718 41,901 50,006
Building and construction 90,413 98,018 103,460 111,760
fent of dwelling 7,501 9,751 12,414 13,539
Some of the main items contributing to the growth are rice in agriculture and food pro-
cessing; timber in forestry; shrimp and marine fishing in fishery; bauxite and other
ures and alumina in mining; drugs in chemicals; knitwear, saw-milling, ice-making,
boots and shoes, enamel ware, glass and pottery, cement, bicycle tyres and tubes and
textile mills in other manufacturing; electricity in fuel and power; air transport and
private road vehicles (taxis, buses, trucks and carts) in transport and communications;
and professions, personal services and catering in professions, etc. The estimates are
based on available land for rice, opening up of the interior for forestry, investment and
output estimates in mining, saw-milling etc., and the government's policy to encourage
private enterprise and the willingness and anticipated participation of private enterprise
in the development of manufacturing and service sectors. Although government is active-
ly investigating and supplying economic reports to private entrepreneurs about the pos-
sibilities of various engineering and manufacturing industries, such as small-scale steel
rolling and melting plants, light building materials, enamel wares, boots and shoes, glass
and pottery, bicycle tyres and tubes, textile mills, cement, and canning, very few of
these industries could be included in our estimates as most of them are still in the investi-
gation stage, and private enterprises do not seem to be willing to commit themselves to
further investment at the moment.
One must note that we have not projected the production of sugar at a high rate because,
owing to the limitation of the guaranteed market for sugar exports at a high price, the in-
dustry has already reached the optimum economic level. Expected growth in the sugar
industry will come from increased peasant cultivation and intensive production methods
which will be sufficient to take care of the expanding domestic market.
The output data for the above main economic activities are given in Table 2. 5. vi. For
rice the figure for 1960 is the amount actually milled, whereas the figures for other
years are the estimated milled equivalent of rough rice after a deduction of 10% for seed
and feed for animals. For sugar, 1960 was a very good year; the annual average produc-
tion and exports for 1957-60 were only 302,000 and 280,000 tons, respectively.
The growth rates for ihe services sectors of the economy have been assumed to follow
in general the growth of the whole economy. As for building and construction, the great-
er part of which is fixed capital formation, we have estimated the capital formation from
195U capital output ratios with some adjustment for the mining and other manufacturing
sectors, the investments in which are expected to change to some extent.
On the basis of above sectoral growths, the GDP at factor cost and GNP figures arrived
at are as shown in Table 2. 5. vii.
The differences between GDP and GNP are due to net factor income payments to rest
of the world, most of it being the dividend and profit of the private overseas capital in-
vested in British Guiana.
Comparing the GNP blow-ups and sectoral growth pattern, we are inclined to accept the
latter projections. Since in an under-developed economy the growth process will lower
the productivity due to difficulties in acquiring new skills required for diversified econom-
ic activities, and since the only labour intensive activity is going to be the rice industry,
the sectoral growth projection appears to us as the most likely pattern of economic growth
in British Guiana. It may be remembered that 1960 was a very good year as against the
stagnant period of 1957-59, and therefore the indicated growth by 1975 will not be a negli-
gible achievement in view of the past trend of the economy.
Table 2. 5. vi
British Guiana: Estimated output of selected items 1960 and projections
Item Unit 1960 1965 1970 1975
Rough rice 1,000 long tons 200 286 329 348
Timber 1,000 cu.ft.(true vol.) 6,787 8,784 13,176 19,764
Shrimp fishing 1,000 pounds 2,613 5,226 6,533 8,166
Marine fishing do. 9,333 14,000 18,666 23,333
Bauxite andotherores 1,000 long tons 2,594 3,554 3,891 4,410
Rice do. 99 162 193 207
All chemicals BWI$1,000
(1960 prices) 3,776 5,213 6,214 7,233
Knitwear and dress-
making do. 1,935 1,990 2,388 2,786
Saw-milling do. 11,651 15,079 22,618 33,927
Ice-making do. 295 424 530 641
Boots and shoes do. 1,000 2,000 3,000
Enamel ware do. 100 300 400
Glass and pottery do. 400 800
Cement do. 1,500 2,000
Bicycletyresandtubes do. 300
Textile mill do. 2,000
Electricity mil. kw. hours 55 94 136 198
Air transport BWI$1,000
(1960 prices) 1,250 1,875 2,500 3,125
Private road vehicles do. 15,877 18,573 21,267 23,964
Professional services do. 2,076 3,613 5,184 6,676
Personal services do. 10,366 13,476 16,586 19,695
Catering do. 7,440 9,672 11,904 14,136
Sugar 1,000 long tons 334 332 335 340
(Sugar export) do. 309 310 310 310
Table 2.5. vii
British Guiana: Gross domestic product and gross national product estimates
for sectoral growth projection, 1960 and projections (at 1960 prices)
Item 1960 1965 1970 1975
BWI$ 1,000
GDP at factor cost 269,852 322,491 371,565 426,672
GNP 256,031 306,303 352,717 404,487
Table 2.5. viii
British Guiana: Estimates of gross domestic product at factor cost by industrial origin, 1960 and projections (at 1960 prices)
Sector 1960 1965 1970 1975
BWI$1,000 Percent BWI$1,000 Percent BW1$ 1,000 Percent BW1$1,000 Percent
Agriculture
Rice
Sugar cane
Others
Livestock, forestry, and
fishing
Forestry
Others
Mining
Food processing
Rice
Sugar milling
Co Others
Chemicals
Engineering
Other manufacturing
Fuel and power
Distribution
Transport and communic
Banking and insurance
Professions and personal
services
Building and construction
Rent of dwelling
Government
Gross domestic product
at factor cost
Index, 1960 = 100
52,896
10,722
32,281
9,893
20,642
8,395
12,247
23,132
20, 730
2,337
13,551
4,842
1,157
1,539
5,638
2,337
39,292
18,974
8,383
16,553
28,791
3,456
26,532
19.60 58.648 18.19 63.295
3.97 15,348 4.76 17,687
11.96 32,135 9.97 32,572
3.67 11,165 3.46 13,036
27,123
10,856
16,267
8.57 31,549
23,058
3,815
13,590
5,653
1,660
1,581
7,293
4,013
45,277
21,902
11,288
21,560
30,797
4,493
32,249
34,098
15,024
19,074
9.78 34,507
66.004
18,703
33,227
14,074
4.38
7.79
3.30
10.00
4.82
5.18
9.16
9.18 42,645
4.05 20,566
5.13 22,079
9.29 39,061
7.15 24,633 6.63 25,692 6.02
1.18 4,536 1.22 4,870 1.14
4.22 13,594 3.66 13,602 3.19
1.75 6,503 1.75 7,220 1.69
1,963
2,294
10,842
5,814
52,167
24,828
14,863
26,573
32,811
5,720
37,157
2,274
3,007
16,268
8,440
59,905
28,146
19,200
31,570
35,555
6,238
42,667
269,852 100.00 322,491 100.00 371,565 100.00 426,672 100.00
100.00 119.51 137.69 158.11
On the basis of the sectoral growth projection it is expected that there will be little
improvement in the unemployment situation in the future. The ratio of unemployment to
total labour force is expected to go down to 13 % in 1975 from 18 % in 1960. There was
no change in the unemployment position between 1956 and 1960.
The structure of the economy will not be appreciably changed either as may be seen
from the percentage distribution of the GDP at factor cost by industrial origin (Table
2. 5. viii). Except for livestock, forestry and fishing, mining, chemicals, engineering,
other manufacturing, fuel and power, banking and insurance, the percentage contributions
of the other sectors have either remained stationary over the years or declined to some
extent. However, the absolute amounts of GDP from chemicals, engineering, fuel and power,
and even other manufacturing, are so small that the economy will still remain predominantly
agricultural, or, if we bring in forestry and mining, will be based on primary industries only.
Estimates given in Table 6b of expenditure, GDP, GNP, and national income, and per
capital figures for each based on the low rate of population increase (which seems to be
more acceptable than the high rate), show that after 1965 the economy of British Guiana
will lapse again to a stagnant period. Unless there are more investments in the economy
than are envisaged in our projection, the growth in national income will be barely suffi-
cient to maintain the per capital income level reached in 1965. This is mainly because of
the high rate of population growth, an exponential rate of 2.849 % annually, and also our
conservative estimate of future growth of the economy. Even if the exports will be higher
than imports from 1965 onwards, it is rather difficult to anticipate considerably higher invest-
ments in the economy either by the government because of high public debt charges, or by the
private entrepreneurs with their faith in British Guiana shaken by political strife and turmoil.
Table 2. 5. ix
British Guiana: Ratios of "final demand" domestic outputs to
"growth" domestic outputs, 1960 and projections
Sector 1960 1965 1970 1975
Percent
Agriculture 102.22 106.88 108.81 112.39
Livestock, forestry, and fishing 141.61 126.96 117.18 102.78
Mining 90.09 91.25 92.56 93.90
Food processing 121.51 124.01 126.82 130.40
Chemicals 222.91 188.89 179.98 175.17
Engineering 1200.39 1317.24 946.56 785.27
Other manufacturing 199.16 179.72 129.49 106.16
Fuel and power 288.41 157.23 123.12 95.80
Distribution 95.68 97.97 95.11 93.21
Transport and communications 98.87 99.62 97.20 95.60
Banking and insurance 111.97 99.16 85.37 74.80
Professions and personal services 107.00 97.36 89.96 86.48
Building and construction 102.15 102.73 103.29 103.98
Rent of dwellings 107.50 100.38 91.76 97.56
Total 116.95 115.97 112.90 110.46
The feasibility test by inter-industry analysis has been attempted to examine any im-
balances ir the economy. From the Leontief inverted transaction matrix of the inter-in-
dustry table for the economy of British Guiana 1959 (Tables 6c and 6d), total supply of
goods and services necessary to meet the projected final demands (i. e. government and
household expenditures, exports and gross domestic capital formation) have been esti-
mated for 1965-75. Allowing for imports in the same proportions of imports to total
supply as in 1959, we have obtained the "needed" domestic outputs. The ratios of these
"needed" domestic outputs to our sectoral growth domestic outputs (Table 2. 5. ix) show
that a larger proportion of imports than in 1959 will be necessary to balance the economy.
However, by 1975 livestock, forestry and fishing, chemicals, other manufacturing, and
fuel and power will be well advanced in their bid towards import substitution, and engi-
neering will also make significant progress. An interesting fact is that mining has more
export potential than at present and even by 1975 it will not be fully exploited. The major
bottlenecks appear to be the agriculture and food processing sectors, where imports will
be increasing, and also the building and construction sector which would require more
expansion. On the other hand, distribution, transport and communications, banking and
insurance, and professions and personal services will be more than adequate. Thus the
imbalances in the economy require significant efforts in import substitution activities,
especially in processing and manufacturing industries.
EXPLANATORY NOTE FOR PART TWO
LIST OF INDUSTRIES INCLUDED IN EACH SECTOR
Territory and sector
Activities included
Jamaica
1. Sugar cane growing
2. Export agriculture
3. Domestic agriculture
4. Livestock and fishing
5. Mining and quarrying
6. Construction
7. Manufacturing 1:
food, drink and
tobacco
8. Manufacturing 2:
textiles, fibres and
leather
Farmers, estates, factory sugar, rum molasses and rum
bottling.
Banana, citrus, coffee, cocoa, pimento, ginger, other export
growing and processing (packing, pulping, washing, drying,
roasting where applicable). This sector excludes local con-
sumption of these commodities and includes all distribution of
exports between grower and ports of loading.
Cultivation only of pulses and vegetables, herb tea, flowers,
rice, tobacco, root crops, fresh fruit. Forestry and products
for processing, e.g., mangoes, ackee, pineapple, coconuts.
Also all commodities consumed domestically that are mainly
export goods.
Poultry, eggs, milk, fish, meat production.
Bauxite, alumina, gypsum quarrying.
All private and public capital formation and maintenance of
capital except small items of repair (in Manufacturing 4).
Coconut products, cassava, cigarettes, cigars, oils and soaps,
biscuits, cornmeal, bakeries, condensed milk, beer, carbo-
nated beverages, ice making, liqueurs, ice cream, animal
feeds, pimento oil, sugar confectionery, rice milling, tobacco
curing, canning and preserving, macaroni, local beverages,
butchers.
Clothing, cloth, buttons, mattresses, zip fasteners, straw
goods, footwear, leather products, shoe heels, coir products,
rope and cordage.
Territory and sector
9. Manufacturing 3:
heavy industries
10. Manufacturing 4:
miscellaneous
11. Distribution
12. Public utilities
13. Transport, etc.
14. Services
Activities included
Cement, stresscrete, gypsum products, blocks, tiles, boat
building, wooden containers, wooden handicraft, plumbing,,
sawmills, metal beds, aluminium products, metal fixtures,
furniture and fixtures, metal containers.
Newspapers and publishers, advertising, paper products,
petrojel, records, tyreretreading, batteries, dyes, anhydrous
alcohol, neon signs, job printing, rubber stamps, charcoal,
toilet preparations, motor repair, paint, oxygen, plastics,
carbon dioxide, electrical repairs.
All wholesale, retail, commission agents, etc.
Water, gas, electricity.
Wharfage, stevedoring, cold storage, citrus packing, rail-
road, road passenger, shipping, travel agents, taxis, airline
agents, airlines, communications.
Banking, life insurance, general insurance, building societies,
real estate, mutual finance, other investment, Industrial
Development Corporation, education, medical and health,
legal, hotels, restaurants, clubs, recreation and entertain-
ment clubs, cinema, racing, Jamaica Broadcasting Corpora-
tion, other -laundries, barbers, beauticians, tailoring, shoe
repair, photography.
Trinidad and Tobago
1. Petroleum and asphalt Mining and refining of oil; mining of asphalt, natural gas.
2. Sugar and rum
3. Manufacturing
Manufacture of sugar, rum, molasses, bitters and bagasse.
All other manufacturing.
4. Transport and commu- Taxis, trucks, buses, air services, telephone and cable and
nications wireless.
5. Public utilities
6. Building and con-
struction
7. Government
Port services, harbour master, electricity, railways, post
office.
Building and construction done on behalf of other industries
and services, government and households.
Central and local.
Territory and sector Activities included
8. Services
9. Agriculture
British Guiana
1. Agriculture
2. Livestock, forestry
and fishing
3. Mining
4. Food processing
5. Chemicals
6. Engineering
7. Other manufacturing
8. Fuel and power
9. Distribution
10. Transport and
communications
11. Banking and
insurance
Distribution, tourism, banking, domestic services, etc.
Export and domestic agriculture, livestock and fishing,
forestry and quarrying.
Rice, sugar cane, coconut and copra, other agriculture
(fruits and vegetables, coffee, cocoa, corn, etc. ground
provisions, tobacco leaves, fodder, etc. ).
Cattle, pigs, etc., poultry, milk, eggs, honey, etc., hides
and skins (raw). Forestry and charcoal making, balata and
barks. Fishing sea, inland and aquarium.
All minerals, stone and stone-crushing, sand, etc.
Rice milling, sugar and molasses, beverages alcoholic and
others, oil and fat, meat, coffee, tobacco, bakery, dairy
products, milk pasteurisation, canned foods, etc.
Drugs, oxygen, soap, matches, paints and dyes, fertilisers,
etc.
Foundry, boat building, repair and maintenance of machinery,
metal manufactures, electrical and transport equipment.
Furniture, leather, knitwear and dressmaking, jewellery,
handicrafts, printing, saw-milling, concrete blocks, all non-
metal manufactures.
Electricity, fuel oil and lubricants.
Wholesale and retail trade, commission agents, travel and
insurance agents, film distributors, marketing organizations,
storage and warehouses, wharves, advertising, gasoline
distribution and petrol pumps.
Air, river, and sea, railways, road (excluding all transports
not available for hire outside). Post and telecommunication,
cable and wireless, radio, harbours.
Commercial banks, post office savings bank, insurance
companies, co-operative societies, money-lenders, pawn-
brokers, real estate dealers, investment companies.
Territory and sector
Activities included
Territory and sector
12. Professions and
personal services
13. Building and
construction
14. Rent of dwelling
15. Government
16. Household
17. Foreign countries
18. Gross domestic
fixed capital
formation
Activities included
Professions, tailors, barbers, domestics, laundries, funeral
parlours, cinemas, sports clubs and fairs, professional
societies, schools (excluding government), religious and
welfare missions (churches, hospitals, Red Cross, etc. ),
catering.
Repairs and maintenance of land and buildings, fixed capital
formation.
Actual and imputed rents of all residential dwellings.
Local and central government income and expenditure (ex-
cluding working of government enterprises).
Salaries and wages, etc. income from property and farms,
professions, etc., profit (net of all taxes) and consumption
expenditures.
Imports and exports of goods and services and current trans-
fers.
Net change in stocks, capital formation in building and plant
and machinery, prospecting and exploring for minerals, and
improvements of land.
Part Three
THE PROJECTION OF DEMAND
Chapter 1
DEMAND AND INCOME
Given the expected growth in population and in income per capital, the estimation of fu-
ture demand depends primarily on the relation assumed to exist between demand and in-
come. This is normally expressed in terms of the income elasticity of demand for the dif-
ferent products and product-groups under consideration. The statistical measurement of
these income elasticities may be carried out by one, or both, of two different methods.
Time-series data relating to income and consumption per capital and to changes in prices
over a suitable period may yield serviceable estimates both of income elasticities and of
price elasticities. Alternatively, survey data relating to consumption or expenditure by
different groups of households in a given period may be analysed to show the relation be-
tween total household income or expenditure and the demand for individual items. A single
survey however will not permit the estimation of price elasticities, since the price situa-
tion must normally be assumed to be the same for all the households taking part in it.
In the present study, reliance has had to be placed mainly on the second or cross-sec-
tional method, since satisfactory time-series data for a sufficient number of years are
not available. Whenever possible however, the changes which have taken place in recent
years in average consumption levels (some of which are of substantial magnitude) have
been taken into account in determining the elasticity to be used for purposes of projection.
Expenditure surveys for cost-of-living index purposes have been made in several West
Indian territories, and some estimates of income elasticities based on this material have
already been published (Ref. D. 1.). For the purpose of the present study, a number of
special analyses were made of the results of the survey carried out in Jamaica in 1958.
Use has also been made of some of the results of other surveys, but it has not been possi-
ble to analyse these in the same datail.
The Jamaica survey was carried out by the Government Department of Statistics, and
a report based on it was issued in 1960 (Ref. D. 2). It covered 1,160 households divided
roughly according to the distribution of total population between the main urban area,
Kingston, the other main towns on the island, and the rural areas. The survey records
were made available by courtesy of the Department, but it bears no responsibility for the
use which has been made of them for this study.
An itemised food budget, including both purchased foods and those obtained as gifts or
from domestic production, was requested from each participating household for two weeks
at different periods of the year. Information was also asked for on other principal catego-
ries of expenditure during the year, and on the earnings of members of the household.
In view, however, of the difficulty of obtaining reliable estimates of household income,
the analysis of demand elasticities has been based on the recorded total expenditure of the
household as the determining or independent variable.
In order to carry out the analysis, households from the rural areas and from Kingston
were first grouped into a series of household types of constant composition in order to eli-
minate the influence of variations in size and numbers of children on the expenditure pat-
tern. The records for each of the most numerous of these groups were then analysed by
fitting for each of the major commodity groups a semi-logarithmic equation of the form
y = a + b log x
where x represents total household expenditure expenditure and y the expenditure on the
particular product- group under investigation. The income elasticity of demand, repre-
sented mathematically by dy, is equal, in this formulation, to b/y, the average value
y dx'
of y being taken in order to give the average elasticity for each sample. 1/ By this pro-
cedure a number of estimates of the elasticity for each product- group are obtained. These
may, in appropriate cases, be combined by suitable methods of averaging to give an over-
all estimate of elasticity for the whole population.
The above equation is only one of a number of different equations from which estimates
of income elasticity may be derived. The choice of the equation depends on the nature of
the relationship assumed to exist between total expenditure and expenditure on a particular
item, and in particular, on the change (if any) expected to occur in the value of the elasti-
city as the income or consumption-level itself changes. In the above formulation the elas-
ticity is assumed to diminish as the income or consumption level rises, and this seems in
general a more satisfactory assumption than the hypothesis of a constant income elasticity,
especially in projecting demand from a base period in which the initial elasticity is high,
as it is for many commodities in the West Indies. The semi-logarithmic equation is not
the only type which satisfies an assumption of this kind, but it has the merit of being readi-
ly calculated and simple to apply for purposes of projection.
After obtaining the elasticity estimates in this way, it is necessary to consider how far
they seem to give a valid representation of the demand situation in 1958 and in what re-
spects, if any, it is desirable to adjust them in projecting future levels of demand. In the
present instance it was necessary first of all to allow for the fact that only a relatively
small part of the whole survey sample could be used in the elasticity analysis, and that
the households included were of small size and had relatively few children. As would be
expected, they had considerably higher average values of total expenditure and of expendi-
ture on food per person than the whole sample. Part, but not the whole, of this difference
is due to the relatively small number of children in the households analysed. A rough es-
timate was therefore made of the difference in expenditure per equivalent adult between
the households included in the elasticity analysis and households in the whole of the sample,
and the average elasticities derived from the analysis were adjusted to the estimated aver-
age rates of expenditure in the full samples of both urban and rural households. Since the
1/ In practical computation using common logarithms b must be multiplied by logl0
(.43429...) to obtain the estimate of elasticity.
semi-logarithmic formula assumes that income elasticity varies inversely with the level
of consumption or expenditure, the effect of the adjustment was in nearly every case to
increase the elasticities above the calculated figures; in general however, the adjustment
was relatively greater for the rural than the urban households.
Having arrived in this way at estimated figures valid both for the rural and urban sec-
tions of the sample, we must next take account of the fact that the data used for the analy-
sis related to the expenditure incurred by the housewife on the different items purchased
and not to their quantity or their value at ex-farm or import prices. It is well-known
that the elasticity of expenditure on a given type of food has in general a higher value than
the elasticity of the quantity purchased, because part of the additional expenditure incurred
by higher- income families is devoted to higher priced varieties of food or to products
whose value includes a higher proportionate element of processing or distributive costs.
The element of quality elasticity may play an important part in determining the total ex-
penditure elasticity, and estimates of its effect can be obtained from surveys (such as the
United Kingdom National Food Survey) in which the elasticity can be separately measured
both for quantities purchased and for expenditure. In the Jamaica survey, no precise al-
lowance for this "quality factor" was possible, but since what is required for purposes of
projection is an estimate of the quantitative elasticity in terms of farm output or imports,
a downward adjustment, determined in the light of general probabilities, was made to the
estimates resulting from the procedure described above. In most cases this second ad-
justment largely cancelled the effect of the first so far as the urban households were con-
cerned, but for the rural sample the elasticities remained on the whole higher than the un-
adjusted figures resulting directly from the analysis.
If the figures obtained in this way could be taken as valid estimates of the income elas-
ticities of demand for the rural and urban sections of the total population respectively, it
would be sufficient to weigh them according to the rural and urban proportions of expendi-
ture on each commodity in order to calculate average figures applicable to the population
as a whole. This procedure, however, assumes that the survey was in fact representative
of the whole population, an assumption which cannot be taken for granted without question.
The survey was conducted by random methods and was intended to give a representative
sample, but it seems probable that, like most surveys, it failed to give adequate repre-
sentation to the highest income- strata. The average food expenditure recorded in the
survey (J26.4 per capital per year) falls substantially short of the official estimate made
for national income purposes of the total personal expenditure on food, which works out at
an average for 1958 of about J 39.8 per capital. An exact agreement between these two
figures is not to be expected for a number of reasons; in particular the national income
estimate includes the expenditure of non- residents, which must be excluded in order to
give a figure comparable with the survey average, while the latter is subject to errors of
recording which are obviously much more likely to result in under- estimation than in
over-estimation. It is however difficult to explain in these ways more than a small part of
the relatively large discrepancy between the two figures. If the national income estimate
is to be taken as approximately accurate, therefore, it seems necessary to assume that
the highest income-groups among the population, say the wealthiest 10 to 15 percent, were
substantially under-represented inthe survey. The difference would be largely accounted
for if the survey average could be taken to represent the expenditure of say 85 percent of the
population, and if the average food expenditure of the remaining 15 percent were assumed
to have amounted to about J 100 per capital per year or about J 2 per week. This is by
no means an improbable figure it was in fact exceeded by about 14 percent of the two-
57
adult households surveyed in Kingston. But if this is the explanation of the discrepancy
between the two estimates, it follows that a group of households whose income elasticity
of demand must be much lower than the general average was in effect excluded from the
survey sample. It must be remembered that the weighting appropriate to the averaging
of elasticities over different sections of the population is proportional not to their num-
bers, but to their expenditure, and this will give the under-represented wealthy consu-
mers a much higher weight than they would receive on the basis of their numbers. These
considerations seem too important to be ignored, and although the allowance for the under-
represented income-groups can only be made on a very rough basis it has been assumed
that its effect is to reduce the elasticities applicable to the whole population in 1958 by
about 10 to 15 percent as compared with the weighted averages resulting from the calcula-
tions previously described.
Chapter 2
FOOD EXPENDITURE IN JAMAICA IN 1958: SURVEY RESULTS
Details of the expenditure on food recorded in the Jamaica survey are summarised in
Table 3.2.i. Before discussing the elasticity estimates derived by the methods outlined
above, attention may be drawn to certain features of the food expenditure pattern as re-
vealed by these figures.
The most striking feature is the large difference in average expenditure between the
urban and rural groups of households. The Kingston families spent about 2 1/2 times as
much on food per capital as the rural families, and on fresh meat and fish, and milk pro-
ducts and eggs their rate of expenditure was about three times that of the rural families.
Part of this very large difference is explained by the variation in household size and
composition, the rural families being much larger and including a much larger proportion
of children than the urban households. This factor, however, can be allowed for by com-
paring only rural and urban households of identical composition in the special elasticity
analysis (see Table 3.2.ii). When the comparison is made on this basis the total food ex-
penditure of the rural families rises to about half the Kingston rate and there are roughly
corresponding changes in the averages for individual food groups. It is noteworthy that
when households of identical composition are compared the Kingston rate of expenditure
on roots and starchy vegetables is lower than that of the rural households.
A further part of the total difference is explained by differences in price levels between
the two areas, Kingston prices being generally higher, though the price records on which
this statement is based (which were made available by the Jamaica Department of Statis-
tics) show that there are some products, especially imported items, which are at times
cheaper in Kingston than elsewhere on the island. The food groups mentioned above as
showing the greatest relative difference in expenditure levels are also those for which the
difference in price levels seems to have been greatest. The difference in prices amounted
to perhaps 20 to 30 percent for fresh meat and fish and possibly to somewhat more for
fresh fruit and vegetables (other than roots and starchy vegetables). Fresh milk was sub-
stantially more costly in Kingston than elsewhere and there was a similar though smaller
difference in the price of eggs. Many foods however were (and are) subject in Jamaica to
official price-control orders, and these (which include condensed milk, butter and cheese)
are practically always sold at uniform prices throughout the island.
It is clear, therefore, that when allowance is made for both these factors, much the
greater part of the difference in expenditure levels remains unaccounted for and reflects
a genuine quantitative difference in consumption. In many respects indeed, the two groups
of households seem to belong to different worlds. The upper stralum of the Kingston house-
holds represents a middle-class standard of expenditure and consumption not very different
from what might be found in Europe. while the lower strata among the rural households ex-
hibit the consumption and expenditure pattern of the West Indian peasant diet. Over 20 per-
cent of the rural households included in the analysis, for instance, recorded no consump-
tion of fresh meat or fish, but the proportion among the Kingston households which had no
consumption of these products was negligible. The changes in food consumption which
occurred during the last decade represent in many respects a process of transition between
these two modes of life, and there seems no doubt that this process will continue to charac-
terise the demand pattern of the next twenty years, assuming that the rise in average in-
come levels and the spread of urban consumption habits is maintained.
Table 3. 2. i
Average food expenditure per person per week, Jamaica Expenditure Survey, 1958
Total or
Item Kingston Other towns Rural Total o
weighted av.
Number of households 352 127 681 1,160
Number of persons 1,138 506 3,209 4,853
Persons per household 3.23 3.98 4.71 4.18
Shillings Shillings Shillings Shillings
Fresh meat 2.44 1.82 0.84 1.32
'Iinned and pickled meat 0.80 0.31 0.16 0.33
Fresh fish 0.89 0.54 0.14 0.36
Tinned and pickled fish 0.49 0.36 0.37 0.40
Roots and starchy veget. 1.61 1.68 1.61 1.62
Other fresh vegetables 0.84 0.45 0.30 0.44
Fresh fruit 0.69 0.36 0.28 0.38
Tinned and dried fruit
and vegetables 0.48 0.33 0.27 0.33
Milk products and eggs 2.20 1.54 0.72 1.15
Oils and fats (excluding
butter) 0.66 0.60 0.36 0.46
Cereals and bakery prod. 2.70 1.77 1.19 1.60
Sugar, sweets, etc. 0.66 0.52 0.39 0.47
Non-alcoholic drinks 1.12 0.90 0.39 0.61
Meals away from home 2.91 0.86 0.24 0.93
Total 18.48 12.03 7.25 10.37
Table 3. 2. ii
Relative expenditure per person on food in rural and Kingston households (ratio of King-
ston to rural averages). Jamaica Expenditure Survey, 1958
d g Household type 1/
Food group
2A 2A + C1 2A +C2
All food (less alcoholic drinks) 1.98 2.07 1.81
Cereals and bakery products 1.64 1.87 1.78
Sugar, sweets and condiments 1.18 1.08 1.21
Roots and starchy vegetables 0.96 0.95 0.79
Other fresh vegetables 3.02 2.82 1.88
Fresh fruit 2.09 2.05 3.22
Tinned and dried fruit and vegetables 1.50 1.44 0.56
Fresh meat and fish 2.72 2.60 3.15
Tinned pickled meat and fish 1.69 2.06 1.42
Milk products and eggs 2.28 2.14 2.33
Oils and fats 1.32 1.66 1.33
1/ See footnote 1 to Table 3. 3. i.
Chapter 3
INCOME ELASTICITIES OF DEMAND IN JAMAICA
A summary of the evidence as to income elasticities for the principal food groups as
devised from the Jamaica survey is given in Table 3. 3. i. For six of the most important
of these groups the regression coefficients from which the elasticities are calculated are
shown in Table 3.3. ii which also gives the corresponding coefficients of correlation and
the estimated standard errors of both the regression and the correlation coefficients.
The figures in the right-hand column of Table 3. 3. i are the general averages which
have been derived from the survey figures after making the adjustments already described
in order to reach estimates which can be taken as applicable to the population as a whole.
Before using these figures as the basis of the estimated elasticities required for purposes
of projection, however, it is desirable to consider them in relation to the changes in ave-
rage income and consumption levels in Jamaica which have taken place during the last de-
cade. So far as possible two sources of information as to changes in consumption between
1950 and 1958 have been used; these are the quantitative estimates, where available, of
average consumption per capital, and a deflated series of estimates of personal expenditure
per capital on certain commodities derived by applying an index number of retail prices to
the national income estimates of expenditure at current prices in different years. Unfor-
tunately, however, the dearth of reliable statistical material has made it necessary to con-
fine this examination to a few of the major products or product-groups.
In respect of meat and dairy products and of total food expenditure there is good agree-
ment between the recorded changes and those calculated from the estimated elasticities.
In the case of sugar, estimates published by FAO (Ref. D. 8) show an increase in per ca-
pita consumption in Jamaica between 1950 and 1958 of 19 percent, which is reasonably con-
sistent with the estimated elasticity derived from the survey (though the latter relates to
a group of products including confectionery for which the income elasticity is probably high-
er than for sugar itself). For the remaining food groups however the agreement is less
close, and in some cases there is difficulty in reconciling the estimated actual changes in
consumption with the survey evidence as to demand elasticity.
In the case of oils and fats, supply statistics appear to place it beyond doubt that average
consumption per capital rose between 1950 and 1958 by about 80 percent, which implies a
much higher income elasticity than is warranted by the survey evidence. Retail prices of
these products appear to have fallen somewhat in relation to those of food in general, but
the increased consumption cannot be explained by substitution at the expense of butter since
the consumption per capital of butter itself more than doubled during the period. Domestic
production of copra in Jamaica was however much lower in 1950 than in 1958 since recovery
Table 3.3.i
Average expenditure per household per week for major food groups and estimated income elasticity.
by type of rural and Kingston household. Jamaica Expenditure Survey, 1958
Rural households 11 Kmgston households I/
Number of households
All food (excluding alco-
holic drinks)
Expenditure (shillings)
Elasticity
Cereals and bakery products
Expenditure (shillings)
Elasticity
Sugar. sweets etc.
Expenditure (shillings)
Elasticity
Roots and starchy
vegetables
Expenditure (shillings)
Elasticity
Other fresh vegetables
Expenditure (shillings)
Elasticity
Fresh fruit
Expenditure (shillings)
Elasticity
Tinned and dried fruit
and vegetables
Expenditure (shillings)
Elasticity
Fresh meat and fish
Expenditure (shillings)
Elasticity
Tinned and pickled meat
and fish
Expenditure (shillings)
Elasticity
Milk products (including
butter) and eggs
Expenditure (shillings)
Elasticity
Oils and fats
Expenditure (shillings)
Elasticity
1/ Types of households:
2A 2A+ C1 2A C2 C 3A 2A I 2A C1 2A+ C2
72 31 52
26.99 30.53
0.80 0.86
4.21 4.96
0.66 0.87
1.59 1 59
0.50 0.60
5.33 7.21
0.76 0.49
0.73 1.28
0.57 0.50
1.08 0.85
0.48 0.86
0.99 1.08
0.85 1.11
3.99 3.66
1.30 1.38
2.00 2.40
0.72 0.53
3.28 3.03
0.88 1.27
1.19 1.63
31 58 29 18
30.96
0.71
5.32
0.74
1.61
0.54
6.42
0.35
1.17
0.72
1.21
0.18
1.67
0.99
3.95
1.10
0.68 0.67 0.82
2.69 3.52
0.75 0.37
3.31
1.67
1.85
55.86 55.24
0.68 1.02
7.89 8.85
0.45 0.60
1.71 1.93
0.45 0.72
5.09 5.68
0.24 0.58
2.06 2.41
0.69 0.97
2.22 2.74
0.96 2.14
1.42 0.93
0.42 1.10
10.37 11.52
0.83 1.31
4.12 3.41
0.51 0.93
5.58 7.02 7.05
0.83 0.83 1.39
1.96 1.98 2.17
0.28 0.35 0.46
21 After adjustment as described in text.
General
2A =Households with 2 adults.
2A + C1 = Households with 2 adults and 1 child under 5 years old.
2A + C = Households with 2 adults and 1 child 5 to 14 years old.
3A = Households with 3 adults.
General
average 2/
Shillings
0.65
0.46
0.39
0.33
0.54
0.66
0.69
1.02
0.48
0.85
0.60
from the effects of the 1943 hurricane was still incomplete. It seems necessary to suppose
that consumption levels were abnormally low at this period and that the short-fall in sup-
plies was not made good by imports. In predicting future levels of demand, therefore, the
experience of the 1950's may perhaps be disregarded; at all events it seems impossible to
ignore the survey evidence as to income elasticity so far as future years are concerned.
(It will however be observed from Table 3.4.i. that Jamaican consumption of oils and fats
was still much lower in 1958 than that of other territories.)
The consumption of cereal products appears (both from the deflated expenditure estimates
and from the tonnage statistics of total supplies) to have increased considerably more than
would have been expected on the basis of the survey evidence as to income elasticity. To
give a close fit to the deflated expenditure estimates the income elasticity in 1958 would
have to be raised to rather more than unity; the supply statistics indicate an increase of
average consumption per capital between 1950 and 1958 of about 45 percent, which if wholly
due to the rise in income levels would suggest an income elasticity in 1958 of about 0.75,
two-thirds greater than the estimate derived from the survey of about 0.45. An elasticity
significantly exceeding the latter figure however would be impossible to reconcile with the
general evidence relating to income elasticities for cereals in other underdeveloped areas,
which do not seem to exceed 0.5 even in the low-income countries of Asia and Africa where
standards of living and of food consumption are undoubtedly lower in many cases than in the
West Indies. 1/ Mainly for this reason, therefore, it has seemed desirable, in spite of this
conflict of evidence, to adhere to the survey-based estimate of 0.45 as the average income
elasticity in terms of quantity for the cereals group as a whole in Jamaica.
By contrast with cereals, the average consumption of roots and starchy vegetables,
which in countries such as Jamaica represent an important alternative to cereals as sour-
ces of carbohydrates, seems to have been falling. However, the supply statistics for this
group, which includes many products grown by rural households for their own use, are in
the nature of things somewhat conjectural. Substitution in response to price changes may
account for part of the change in the relative consumption of root vegetables and of cereals,
since the average prices of the former appear to have risen somewhat during the 1950's in
relation to those of cereals.
l:ven in the absence of price changes, however, a rise in the consumption of purchased
cereals such as bread and rice at the expense of the subsistence carbohydrate foods would
be one of the consequences to be expected from a shift in consumption habits towards a
diet of the urban type and away from that characteristic of the traditional rural mode of
life. It is evident from the survey analysis that the consumption of roots and starchy ve-
getables is considerably lower in Kingston households than in rural households. This lower
consumption in Kingston is important even though it conflicts with the difference in consump-
tion levels which would have been predicted from the estimates of elasticity within both
the rural and urban groups of households (the latter being in every case positive, as they
are for all other product groups). In interpreting the survey estimates of elasticity how-
ever, it must be remembered that they relate to groups of food that include a number of
i/ See "Agricultural Products, Projections for 1970", Food and Agriculture Organization,
1962; Annex, Table M4.
different products which were not of the same relative importance in Kingston and in the
rural areas, a larger proportion of the total being represented by potatoes among the ur-
ban households. Other evidence suggests that both Irish potatoes and sweet potatoes have
a considerably higher income elasticity than the other products in the group, and when this
is allowed for, a low, or even negative, elasticity among urban households for some of the
other root vegetables is not necessarily inconsistent with the survey evidence.
It must be admitted that the statistical evidence on these points is not as conclusive as
might be wished. It seems reasonable nevertheless to take the differences in expenditure
on root vegetables between rural and Kingston households (expenditures are consistently
higher among rural households) as giving an indication (when considered in relation to the
difference in total expenditure between the same groups) of the change to lower expenditure
on root vegetables that would be associated with the increase in income experienced by
families moving from the rural to the urban section of the population. In relation to such
a change in income the elasticity of demand for root vegetables is obviously negative. Now
a continued rise in average income levels in Jamaica seems certain to be associated to a
certain extent with growing urbanisation (the term being taken in a broad sense to include
changes towards a more urban type of diet which may well affect households living in rural
areas as well as those which actually move from the country into the towns). Thus it seems
appropriate, in considering the future demand for roots and starchy vegetables, to assume
that part of the increase in average income which is expected in future years will be account -
ed for by an increase in the urban or urbanised section of the population, whose diet will
conform to the pattern indicated by the urban sample in the expenditure survey, while part
will be due to an overall increase both in urban and in rural income per capital. If so, the
elasticity for projection purposes should be an average of the different elasticities appro-
priate to these two changes.
In the light of these considerations a small negative value was assigned to the income
elasticity of demand for root vegetables other than potatoes; for the latter, however, a
fairly high positive elasticity was assumed.
The evident need, in this instance, to take account of the influence of urbanisation on
the pattern of consumption as a factor distinct from the increase of real income by itself
may seem to suggest the desirability of making separate estimates for all foods of the
possible change due to urbanisation and of combining these changes with those expected
from a uniform overall increase in average income in making the final demand projections.
Trial calculations showed, however, that for products other than root vegetables an almost
identical result was reached whichever method was used and that the attempt to take ex-
plicit account of the urbanisation factor added considerable complications to the process
of calculation without appreciably influencing its outcome. This is of course a reflection
of the fact that the urban-rural contrasts in consumption indicated by the 1958 survey, al-
though striking and important in themselves, do not, in respect of most commodities,
differ in any major way from those to be expected on the basis of the difference in total ex-
penditure between the urban and rural groups of households and the average demand elas-
ticities emerging from the analysis. The roots and starchy vegetables are the only major
exception to this statement, and this is the justification for departing from the usual pro-
cedure in estimating their demand elasticities.
In general, then, the survey evidence has been accepted as the basis for the estimation
of the income elasticities for each of the different product groups. But in projecting the
Type and number of households
Rural
2A (72)
=3152
2A -C1 (31)
S.32665
2A C, (52)
oz =.2415
3A (31)
nz =.2773084
Total Rural (186)
n 2936
Kingston
2A (58)
oz = .295263
2A + C (29)
;, = .355105
2A + C, (18)
oz .30390
Total Kingston (105)
0z .3163811
Total All Areas (291)
oz .3606705
Table 3. 3. ii
Jamaica Expenditure Survev : Analysis of income elastcity
Regression and co'
Y1 Y2
b 41.1202 5.6524
O 15.3498 2.593095
r .8442 .6869
b h 2.922 .6995
r .03386 .062245
b 49.4752 6.4011
o 17.4608 2.647357
r .9256 .7898
3b 3.635 .8816
Sr .025731 .06757
b 60.3551 9.996
y 16.405347 3.092637
r .8885 .7782
hb 4.2797 1.11412
Sr .0292 .054694
b 50.2796 9.1183
o 17.165937 3.1975
S.8122 .7908
ib 6.49971 1.2684
5r .0611253 .0672865
b 49.25916 7.2086
o 16.47588 2.882355
r .8778 .7343
Ab 1.9714 .4886
a .01683 .03379
b 72.3088 3.524076
a 26.094 2.3816
S .8182 .4369
;b 6.6282 .9518
ir .0434 .10624
b 87.32561 8.23672
on 31.8239 3.677004
r .9744 .7955
Sb 36.743 1.17
8 r .00939 .068184
b129.8048 12.2564
av 42.46128 4.445425
r .92905 .8379
8, 12.1554 2.1158
8 r .0332597 .0702213
b 82.86367 6.32293
o 31.139112 3.2775
.84191 .61036
, 5.18296 .800777
Sr .02842 .061234
b 62.06353 6.910132
o 25.835966 3.3329716
.8664 .7485
ab 2.0968 .359292
r .01462 .02578
rrelation coefficients and their estimated standard errors
3 Y4 Y5 6
1.1244 4.94485 6.7695 5.4079
.577408 2.697818 3.30121 2.455793
.6136 .5776 .6462 .6939
.1704 .822 .943 .4754
.07348 .07853 .06864 .06111
1.8369 9.3299 11.9588 6.6579
.8880315 4.14701 4.905355 3.541652
.6757 .7349 .7963 .6141
.3616 .1497 1.6369 1.5396
.097603 .0826 .06572 .111873
2.201 8.1681 11.6364 8.8714
.928063 3.848273 3.963735 3.87483
.5727 .5126 .70883 .552913
.4381 1.896 1.6085 1.8452
.093192 .102237 .068999 .0962803
1.9792 5.1469 9.9792 12.7464
.9395212 3.402411 4.9092872 6.44138
.5842 .4195 .5639 .548762
.49465 1.9999 2.62 3.484
.118308 .147998 .122494 .12552
1.630533 6.70569 9.2007 7.43352
.8249358 3.628995 4.07431 3.893857
.58032 .54252 .66302 .5605
.1678 .7613 .7617 .8053
.04863 .051742 .041091 .05029
1.771106 1.433413 20.05632 10.7058534
.8632 1.69912 8.457846 5.092838
.60582 .2491 .7002 .5311
.304 .7308 2.6926 1.9198
.08443 .12316 .06693 .09427
1.7835 2.816 21.5567 13.4211
3.365384 2.610109 9.077834 6.028586
.1882 .38312 .84325 .79055
1.7248 1.2569 2.5564 1.9354
.17912 .5844 .05363 .06964
3.19511 7.8102 35.87786 22.59073
1.306446 2.899114 12.773914 8.134845
.743253 .81873 .8298 .8440
.679214 1.28783 5.5482 3.373
.1054945 .056493 .073405 .067803
2.000684 2.75247 22.49793 13.561323
1.026304 2.23696 9.51821 6.018947
.61675 .38929 .74782 .71284
.249115 .635564 1.94918 1.3020841
.0604687 .0828006 .0430143 .0480005
1.35471 3.0097 14.90487 9.35087
.9056313 3.221404 7.2918726 5.038248
.53952 .33697 .73722 .66985
.123934 .49297 .80076 .607606
.04156 .051965 .020761 .03232
Explanation of Symbols:
Y1 Total expenditure per household on food (less alcoholic drinks). 2A = Households with 2 adults
, lx:penditure per household on cereals and bakery products. 2A + C] households with 2 adults and 1 child under 5 years old.
SExpenditure per household on sugar, sweets and condiments. 2A C2 = Households with 2 adults and 1 child 5 to 14 years old.
Y I lpenditure per household on roots and starchy vegetables. 3A I Households with 3 adults
Y lipenditure per household on fresh meat and fish. ao Standard deviation.
Y, Il\penditure per household on milk products and eggs. S Standard error.
z. Logarithm of total household expenditure.
demand for individual products, separate estimates of elasticity are in most cases neces-
sary for the products falling within each group. Thus while the income elasticity for most
kinds of fresh meat is put at 1.10, poultry is given the higher elasticity of 1.50, while a
much lower figure (0. 10) is assigned to salt meat; within the cereals group similarly a
lower elasticity has been assumed for rice and corn meal than for wheat flour and its pro-
ducts. In the estimation of these individual elasticities there is inevitably a greater ele-
ment of personal judgement since precise statistical evidence comparable to that used in
estimating the group elasticities is not in most cases available. However, in most cases
the nature of the probable relationship between the elasticities for different types of food
Within a given category is reasonably certain.
The formula employed in making the projections on the basis of the elasticities thus
Established assumes the continuance during the period covered by the projection of the
semi-logarithmic relation between demand and income. On this assumption the projecting
equation is:
y+ y X+ AX
Y+ AY = 2.3026 T1 log10 X
Y -10 x
where i1 is the income elasticity of demand for each commodity, Y the base period con-
sumption per capital and X the base period income per capital. This equation gives an es-
timate of average demand per capital of population, from which the aggregate demand is
derived by multiplying by the projected relative population for the data in question and by
the aggregate supply in the base year 1958.
Chapter 4
INCOME ELASTICITIES OF DEMAND IN OTHER WEST INDIAN TERRITORIES
The estimates of income elasticity for the other West Indian territories are rather less
firmly established than those for Jamaica, since, apart from the article by Cumper already\
referred to and some unpublished work by Taylor there is little direct evidence on which
to base them. Cumper's estimates of income elasticity relate to Barbados in 1951-52 and
to British Guiana in 1956. In both cases the foods with the highest elasticities were meat
and dairy products, for which the figures reached or surpassed unity; most other foods
fell within a range of values from about 0.4 to about 0.8, but cereals in British Guiana had
a small negative elasticity when home-produced rice was included, though a positive value
of about one-half was reached when it was excluded.
On the whole the evidence did not seem to justify any major departure from the elasti-
city values arrived at for Jamaica except where this was clearly indicated by the known
differences between the territories in income levels and in the general patterns of food
consumption. It will be seen however from Table 3.4. i. in which the estimated levels of
food consumption and expenditure in the different territories are compared, that some of
these differences are important.
The principal contrast between the diets of the four areas is in the consumption of ce-
reals, which is much higher in British Guiana and Trinidad and Tobago than in Jamaica or
the smaller islands. This is mainly due to the large consumption of rice in British Guiana
and Trinidad and Tobago, both of which have considerable numbers of East Indians in the
population. Roots and starchy vegetables are consumed in relatively small quantities in
these territories, especially in British Guiana, where peasant agriculture is mainly cen-
tred on the production of rice. In the smaller islands, the general pattern of consumption
resembles that of Jamaica, as does the racial constitution of the population. The popula-
tions of the individual islands in this group differ from one another in many respects, but
ti is possible to find social groups within the Jamaican community with fairly strong resem
blances to each of them. The Windward Islands are paralleled by the hill areas of Jamaica
and share with them a common dependence on a similar type of subsistence agriculture,
while Barbados and the Leeward Islands are comparable with the flatter and lower-lying
regions of Jamaica which are dominated, like them, by the plantation sugar economy.
In comparing the estimates of food expenditure and gross domestic product, there are
certain differences in price levels between the territories which should be taken into ac-
count. Food prices and retail prices in general are probably highest in Jamaica and lowest
in British Guiana and Barbados. Thus the difference in gross domestic product per capital
between Jamaica and British Guiana was less in real terms than appears from the table,
while food expenditure reckoned at a common price level would probably have amounted to
much the same figure in both territories. There is no doubt however that Trinidad and
Tobago enjoyed the highest level both of real income and of food consumption, and the group
of smaller islands the lowest, even though the latter include Barbados which, individually,
had an average real income per capital not very different from that of Jamaica and consid-
erably higher than those of the territories with which it is grouped.
Table 3.4.i
Food consumption per capital of population, by territories, 1958
Trinidad Leeward Islands, British
Item Jamaica and Windward Islands Guia
Tobago and Barbados
Pounds per year
Cereals, total 177.5 285.5 179.5 255.1
Rice 42.3 103.0 52.5 149.1
Sugar and sugar preparations 83.5 64.0 85.0 68.0
Roots and starchy vegetables
(incl. plantains) 250.9 146.3 179.6 90.0
Vegetables and pulses 70.6 90.2 49.0 47.3
Fruit (incl. bananas) 291.3 167.8 161.9 29.9
Meat (incl. poultry) 30.2 37.0 31.8 23.3
Fish 32.2 25.7 65.0 28.0
Milk products (excl. butter) 52.8 65.8 72.6 66.9
Eggs 9.3 5.4 8.2 3.2
Oils and fats (incl. butter) 18.3 27.5 24.9 33.8
Calories per day
Calories 2,111 2,533 2,040 2,200
BWI$
GDP per capital (at factorcost) 610 895 342 444
Estimated total expenditure
per capital on food 175.1 222.6 1/ 136.4 22/ 155.4
1/ 1956, excluding Windward Islands.
2/ 1959.
Source: Data and material developed during the study and other available data.
In view of the part played by rice in the diet both of Trinidad and Tobago and British
Guiana its income elasticity must clearly have a much lower value in these territories than
in Jamaica or the smaller islands. In British Guiana the elasticity was taken as equal to
zero for rice, but a relatively high elasticity (0.80) was assumed for wheat flour in view
of the likelihood of increased demand for bread as diets become more sophisticated and
less dependent on subsistence production. In Trinidad and Tobago, on the other hand, rice
was assumed to have a small positive elasticity, but since the consumption of wheat flour
is already fairly high it was given a rather lower elasticity than that estimated for Jamaica.
These values, when weighted in accordance with the estimated contribution of the different
products to the calorie value of the 1958 diet, give average income elasticities for all ce-
reals of about 0.3 in Trinidad and Tobago and British Guiana compared with the average of
0.45 for Jamaica. In the smaller islands the elasticity for rice is assumed to be the same
as in Jamaica and that for wheat flour rather higher, giving an average elasticity for all
cereals of about 0.6.
Table 3.4.ii
Estimated average income elasticities for food groups, by territories
(Weighted according to 1958 calorie consumption per capital)
Trinidad Leeward Islands, British
Food groups Jamaica and Windward Islands Guia
Tobago and Barbados
Cereals 0.45 0.3 0.6 0.3
Sugar and sugar preparations 0.4 0.4 0.4 0.4
Roots and starchy vegetables -0.06 0.3 0.1 0.3
Vegetables and pulses 0.55 0.3 0.5 0.55
Fruit 0.65 0.55 0.65 0.8
Meat and poultry 0.9 0.8 0.6 0.9
Fish 0.45 0.55 0.4 0.4
Milk products (excl. butter)
and eggs 0.7 0.5 0.7 0.6
Oils and fats 0.65 0.45 0.65 0.35
Average of all above
Average of all above foods 0.45 0.3 0.45 0.3
Potatoes are also given a lower elasticity in Trinidad and Tobago and British Guiana
than in the other territories, but other root vegetables are assumed to have a positive elas-
ticity of 0.25 compared with the small negative elasticity assigned them in Jamaica. In the
smaller islands it is assumed that the elasticity for potatoes is the same as in Jamaica,
while that for other root vegetables is effectively equal to zero. For roots and starchy ve-
getables as a group the elasticities in terms of calories average out at about 0.3 in British
Guiana and Trinidad and Tobago and 0.1 in the smaller islands compared with an overall
figure of slightly less than zero for Jamaica.
There are a number of other differences between the territories in the elasticities as-
sumed for different foods, all of which have again been arrived at mainly in the light of the
differences in average 1958 consumption levels. Thus fresh vegetables and pulses are gi-
ven a considerably lower elasticity in Trinidad and Tobago than elsewhere while fruit and
butter were for a similar reason assumed to have relatively high elasticities in British
Guiana. In both these territories the elasticities for fresh milk, cheese and vegetable oils
were reduced below the Jamaica figures, as also were the Trinidad and Tobago values for
butter and condensed milk. In the smaller islands a large part of the total consumption of
meat appears to consist of salt pork, for which the elasticity seems likely to be small; this
has the consequence of reducing the average elasticity for all meat in terms of calories be-
low the comparable average for the other territories.
The approximate average elasticities for the different territories in terms of calories,
weighted in accordance with the estimated calorie values of 1958 consumption per capital,
are shown for the major food groups in Table 3.4. ii. Overall average income elasticities
in terms of calories have been calculated by F.A.O. for a large number of other areas and
published in the report already referred to. 3/ These calculations give, for example, av-
erages of 0.30 for Mexico, 0.40 for Africa and the Near East (excluding South Africa) and
0.62 for Asia and the Far East (excluding Japan). As shown by the table, the averages for
the West Inpies work out at about 0.45 for Jamaica and the smaller islands and 0.3 for Tri-
nidad and Tobago and British Guiana. If all the West Indian territories are grouped toge-
ther the combined average comes to about 0.4.
3/ Cited in footnote 2, chapter 3, part three.
Chapter 5
PROJECTIONS OF FINAL DEMANDS
With the elasticities estimated as described, and the data on expected growth of income
and population as visualised in the long-term economic projections, the final demands may
now be projected to 1975.
The relevant data of growth for the various territories are given in Table 3. 5. i.
Table 3. 5. i
Growth of income and population, by territories
(Values at 1958 prices)
Item Unit 1958 1965 1970 1975
Jamaica
National Income J1,000 177,265 249,916 318,787 386,639
Population no. 1.563,100 1,744,548 1,886,683 2,040,398
National income per capital Jj' 113 143 169 189
Do. index 100.0 126.5 149.6 167.3
Trinidad and Tobago
Consumption by persons BWIV?1,000 459,000 800,800 1,013,900 1,223,500
Population no. 788,600 953,290 1,097,600 1,263,800
Consumption per capital BWI$ 582 840 924 968
Do. index 110.0 144.3 158.7 166.3
Leeward Islands, Wind-
ward Islands and Barbados
Consumption by persons BWI$1,000 197.189 255,904 310,482 368,470
Population no. 650,710 719.937 774,031 832,237
Consumption per capital BWI$ 303 355 401 443
Do. index 100.0 117.2 132.3 146.2
British Guiana
Consumption by persons BWI$1,000 172,119 222.969 258,245 298,732
Population (incl.Amerindians) no. 527,802 646,530 744,400 858,340
Consumption per capital BWI$ 326 345 347 348
Do. index 100.0 105.8 106.4 106.7
For the estimation of demand, the suitable index for Jamaica has been considered to be
the per capital national income. For the other territories (Trinidad and Tobago; the Lee-
ward Islands, Windward Islands and Barbados; and British Guiana) the index used was per
capital consumption expenditure. Although consumption expenditure is supposed to have a
constant relationship with the growth of national income in general, we have considered
this relation not to be true for these three territories because of the unbalanced structure
of their economies.
The details of food consumed per capital and its calorie contents are shown for each of
the territories in Tables 7a to 7d. Protein and fat consumption is shown in Table 8 for
Jamaica only. Summary Table 3. 5. ii, showing the per capital consumption per day of cal-
orie, protein and fat, by food groups, will be useful for comparison of food consumption
in the various territories. The calorie content of food in 1958 was highest in Trinidad and
Tobago, and British Guiana. Although Jamaica had a higher per capital income in 1958 than
British Guiana, the calorie content of Jamaican food consumption was lower than that of
British Guiana. This is presumably because expenditures on food have not been much dif-
ferent in both territories in spite of large differences in income, and furthermore, the in-
come distribution in Jamaica may be considered as having a significantly higher range than
in British Guiana. However, as a result of future economic growth in the other territories,
by 1957 British Guiana will have the lowest calorie consumption. Thus, it is estimated
that the calories will increase from 2,111 in 1958 to 2,635 by 1975 in Jamaica, 2,533 to
3,024 in Trinidad and Tobago, 2,040 to 2,455 in the Leeward Islands, the Windward Islands
and Barbados, and 2,200 to 2.254 in British Guiana.
Protein and fat contents of food have been estimated for Jamaica only. It is estimated
that the consumption of protein per day will go up from about 56 grams in 1958 to about 70
grams by 1975, and the consumption of about 34 grams of fat in 1958 will increase to about
47 grams by 1975. The protein and fat consumption in other territories will also be about
the same since major sources of protein by food groups are starchy foods, meat and fish,
and those of fat are starchy foods, meat, fish, milk and oils, etc. Fruits are also an im-
portant source for protein and fat, but the consumption of fruits differs widely among the
territories. However, the presence of more starchy foods and oils and fats in the food
consumption of other territories will offset the lower consumption of fruits, sugar and
eggs, and thus protein and fat consumption will be comparable with that of Jamaica.
Thus, the nutritional value of food consumption in these territories does compare fa-
vourably with other countries having similar income and climatic conditions, etc. It may
also be noted that the above analysis is based on main food items only, and estimates of
tea, coffee, cocoa, and alcoholic and non-alcoholic beverages could not be considered in
our study. The inclusion of these items will increase the calorie content to some extent
and present a more favourable picture.
Table 3.5. ii
Consumption per capital per day: Calorie, protein and fat content, by food groups
Roots and Veg. and Oils and
Cereal Sugar Fruit Meat Fish Milk Eggs Total
starchy veg. pulses I I fats
Jamaica:
1958
1965
1970
1975
Trinidad and Tobago
1958
1965
1970
1975
Leeward Islands,
Windward Islands
.1 and Barbados:
1958
1965
1970
1975
British Guiana:
1958
1965
1970
1975
Jamaica:
1958
1965
1970
1975
Jamaica:
1958
1965
1970
1975
766.100 362.900
849.336 397.020
907.987 421.327
947.575 437.657
1,255.215 280.870
1,394.273 322.158
1,437.138 332.831
1,455.665 337.887
777.359 373.333
851.131 396.853
907.730 415.146
954.592 430.080
1,123.383 298.580
1,144.181 305.447
1,146.493 306.044
1,147.416 306.343
Calories
243.890 47.976 228.159 83.850
243.478 54.187 263.296 101.024
243.408 58.652 288.355 113.364
243.288 61.585 305.118 121.558
146.902 151.382 118.803 94.480
164.234 166.382 142.801 122.973
168.654 170.126 148.984 130.371
170.834 172.072 154.306 134.005
173.601 42.136 103.216 125.155
175.342 45.477 147.984 136.078
176.676 48.059 122.386 144.394
177.774 50.173 129.225 151.264
83.841 75.789 18.634
85.467 77.593 19.472
85.667 77.752 19.566
85.699 77.837 19.603
22.630 1.020 4.460 3.045 3.218
25.112 1.116 4.442 3.439 3.712
26.860 1.184 4.432 3.722 4.065
28.040 1.230 4.426 3.909 4.302
3.590 .080
3.963 .088
4.224 .093
4.401 .096
.601 5.874
.679 6.773
.734 7.416
.771 7.844
56.150 111.770
62.115 126.880
66.468 137.632
69.320 162.629
37.505 144.910
45.081 167.897
47.031 171.928
48.007 176.830
68.513 106.138
81.465 117.248
85.280 125.764
88.412 132.774
74.158 41.632 114.968
77.219 42.838 118.460
77.536 42.951 118.854
77.661 43.016 119.013
Protein (grams)
6.650
8.083
9.102
9.782
Fat (grams)
8.402 5.187
8.896 5.929
9.252 6.456
9.485 6.809
6.470 2.221 3.625
7.795 2.649 4.197
8.726 2.955 4.603
9.353 3.159 4.875
16.770 193.020 2,110.585
22.290 222.370 2,341.996
26.228 243.385 2,506.806
28.861 257.340 2,634.931
9.726 292.719 2.532.512
14.715 340.040 2,.80.554
16.019 352.282 2,975.364
16.651 358,097 3,024.354
14.671 256.329 2,040.451
17.928 282.308 2,251.814
20.422 302.241 2,348.098
22.476 318.639 2,455.109
5.743 363.612 2,200.340
6.260 370.458 2,247.395
6.312 371.238 2,252.413
6.341 371.290 2,254.219
1.280 .058
1.701 .068
2.002 .075
2.203 .080
55.950
62.498
67.150
70.266
1.210 9.830 34.281
1.608 11.458 39.984
1.892 12.623 44.038
2.082 13.397 46.747
_______________________
Territory and year
Part Four
PROJECTIONS OF SUPPLY
Chapter 1
LAND UTILISATION IN THE WEST INDIES
Basic resources
Conditions of supply in any country are determined by the basic resource pattern. Lo-
cal resources of land and labour may not be limiting factors in countries where there are
untapped and unexploited areas of land and local labour supplies. In such countries capi-
tal is likely to be the main limiting factor. In the West Indies, both land and capital are
limiting factors and, although there has been a plentiful labour supply in most territories,
there is now evidence of regional labour shortages in some small islands and rural areas
caused by migration. The resource pattern is therefore somewhat complex. In general
however, the economies can be characterized by the statement that there is a pressure of
population on land resources, with consequent pressures to increase industrialization, to
increase the net output from agriculture and to increase emigration. The island of Domi-
nica in the Windward Islands and the hinterland of British Guiana are the only areas in which
this generalization is not applicable.
The limitation of land resources has in a sense simplified our problems of making pro-
jections. Generally speaking, there are known limits to the quantities of land suitable for
any one commodity, and acreage can only be increased by substitution. Although increased
prices could make possible the cultivation of certain lands not now cultivated, this could
only relate to certain commodities and to limited areas. Thus land must impose early li-
mits in total acreage cultivated. Even if we include the island of Dominica and the British
Guianese hinterland, it does not materially expand the extensive frontier since most of the
land in the former is too rugged and in the latter of too low soil quality to represent any-
thing approaching large unexploited land resources.
Existing land use pattern
Table 9a indicates the land use pattern in the West Indies. These figures were derived from
censuses and surveys taken at various dates for certain territories. The information has not
been brought up to date since the years indicated. An agricultural census is now in process of
tabulation and although no firm information is available, there are preliminary indications that
a number of small farms may have gone out of production, owing probably to migration. Never-
theless, the acreage under sugar and other cash crops is known to have increased, so that even
if food crop acreages have declined, we do not expect to find a decrease either in total crop land,
or in land area under farms.
Table 9a shows that land in farms as a proportion of total land area varied from 5.5%
in British Guiana (1952)to 91.7% in Barbados (1946). British Guiana however, is exceptional,
and without that country, Dominica with 37.8% had the lowest proportion of its land area
in farms. Trinidad and Tobago's figure of 41.7% was probably significantly influenced by
the considerable areas held as mining leases.
Using the 1960 census population figures, if we measure population density by relating
population to total land, Barbados is by far the most densely populated area with .5 acre
per capital, Grenada is next with .9 acre per capital, and the least populated areas are Do-
minica with 3.3 acres per capital, and, on a different order of magnitude, British Guiana
with 95.1 acres per capital. If, however, we measure population density in terms of land
in farms, while Barbados is still the most densely populated, St. Vincent, Trinidad and
Tobago, and St. Kitts-Nevis-Anguilla all appear to be more heavily populated than Grenada.
In terms of crop land per capital, Dominica is the least densely populated, followed by
British Guiana, Montserrat and Grenada, all in second place (Table 9c).
These comparisons are of interest because they lead to the question of how far the to-
tal land area in farms represents the total land area suitable for farming and how far the
total land area in crops represents the total of land suitable for crops. In other words,
how much of unused land is suitable for bringing into farm occupancy and how much land
not now under crops could he used for crops?
One would expect, in an area where land has been the main limiting factor, to find a fair-
ly economic use of this resource. Only Barbados stands out as a model in this respect;
in most other territories there is little doubt that some expansion could take place. Never-
theless it is perfectly evident that such expansion, whether of total farm area or of total
crop land must be of a marginal nature as compared with current totals; only in Dominica
and British Guiana is significant expansion likely to be possible and this is unlikely to ex-
ceed more than 20'" of the current totals within the period with which we are concerned.
The figures in Table 9a indicate that a sizeable part (44% without British Guiana and 90%
with British Guiana) of the land area is not in farm occupation. In British Guiana this low
occupation ratio is of course related to the usual problems of developing a continental area
of tropical bush with low soil quality and poor drainage. In the island territories, however,
the reason for a fairly low occupancy is the rugged nature of the terrain. The island with
the lecst rugged land surface is Barbados and here the ratio of farm area to total area is
high. Dominica is by far the most rugged and, although there is more unused land poten-
tial in Dominica than in the other Lesser Antilles, this territory must always show a low
occupancy rate. The figures for Antigua are biased by the inclusion of Barbuda, a dry un-
cultivable island with a low population and fairly large land area. The Trinidad figures
are also biased by the inclusion of Tobago and by the high percentage of land tied up in oil
leases and in swampland. Nevertheless Antigua on its own and Trinidad do not have the
same problems of ruggedness that Jamaica, St. Vincent, Dominica, Grenada and to some
extent, St. l.ucia and Montserrat have. Grenada comes out rather well in all these compa-
risons since it appears to be, if anything, rather more rugged than St. Lucia and at least
as rugged as St. Vincent, but has a higher proportion of its land in crops. This fact may
have some significance in that it may indicate that not only Dominica but St. Lucia and St.
Vincent have more occupiable land than their topography would indicate. However, we
feel that such possible increases are small except in Dominica. We feel, moreover, that
higher prices for cash crops would not necessarily lead to cultivation of additional acreage
unless such additional acreages are as accessible and as simple to cultivate as those now
in production. Some land may be made accessible by new roads. Where this is impossible
however, we do not consider that, within the income structure we have postulated, farmers
will increase cultivation of inaccessible patches of soil in the mountains in Jamaica or in
the Windward Islands, such as has happened in Grenada's recent past.
Projected land use pattern
Table 9a shows the present land cultivation pattern as observed at the most recent cen-
sus dates. In Tables 9b and 9d these areas have been projected on the following assump-
tions.
The total acreage of crop land is derived from aggregating the average projections made
for the individual crops, which is explained in the next chapter.
The acreage under pasture is derived also in relation to projections of livestock num-
bers, although only for improved pasture can these be considered a fairly exact relation-
ship.
In Jamaica, we have assumed some increase in the land in farms between 1958 and 1965.
On the other hand, it is suspected that, due to migration, marginal land may be going out
of cultivation; we do not predict much if any increase in total land in farms between 1965
and 1975. We do, however, consider there will be soma increase in the ratio of pasture
to woodland and an even bigger increase in the proportion of pasture that is improved.
Since so much land in Trinidad and Tobago is tied up in oil leases and crown forests, it
is not unreasonable to suppose some increase in the area of farmland in the period. We
consider, however, that after 1970 any increase in the area of farms is likely to be asso-
ciated with increased pasture rather than crop land. The increases are not expected to be
large.
For the Leeward Islands, Windward Islands, and Barbados, we have predicted small in-
creases in farm areas since there is some room for increased farm use of land in Domi-
nica. If the hoped-for expansion in bananas takes place, it is expected that new areas will
come into use, although a considerable part of the expanded acreage would probably come
from land already in farms but not cultivated. Although we expect some increases in pas-
ture land improvement, it appears that in the small islands the biggest part of the increase
will be in crop land.
In British Guiana we have assumed a rather greater increase in the farm area. This
follows from known plans to increase rice acreage and to bring unoccupied land into rice
cultivation. We expect also that cattle ranching may spread to some unoccupied land, thus
increasing the area of farms further, although improved grasses may lead to intensive rath-
er than extensive expansion of this industry. The assumptions mainly based on our pro-
jections for rice, sugar and cattle cultivation indicate an increase of farm land from 5% to
T7' of total land area, and the proportion of crop land to total farm land isassumedtoin-
crease from 11% to 14%.
We should like to think that future increases in production will come from a better uti- v
lization of land rather than bringing of more marginal land into cultivation. Already one
finds examples of bananas and other crops being grown on land which can hardly be classed
as cultivable, and which will not be cultivable after a few years exposure to wind and rain
with the natural vegetation removed. Land tenure problems are among the many problems
facing proper land use. Some of the better uncultivated lands are owned by estates or by
small owners who do not utilise them. There is little doubt that a proper scientific approach
to the land use problem would advocate intensifying production and possibly reducing the
actual area of crop land. Due partly to institutional factors, we have not been able to pre-
dict a very significant move in this direction in this period, although some increases in
yields are projected. (See chapter 3.)
Chapter 2
SCALE OF PRODUCTION OF AGRICULTURAL COMMODITIES
In the last section we discussed the general pattern of land use in the West Indies as
we believe it to have been in 1958 and as we expect it to be if our projections are a fair
picture of the future. Tables 9a to 9d illustrate this broad land use pattern, but in these
tables we show crop land as a total. In this chapter we shall discuss the breakdown of
crop land into the various crops and also discuss some figures for populations of com-
mercial trees and livestock. Following this discussion of scale of production, we shall
in the next chapter discuss intensity of production and in the following one, total supply.
It should be noted that the tables relevant to this and the following two chapters, Tables
11 to 20, are arranged under commodities. This facilitates the assessment of the scale
effect and the intensity effect on total supply.
First, however, we draw attention to Tables 10a-d, which show how the total crop land
in each territory is made up. These totals are derived from already published censuses
and surveys (see Refs. G1 to G4) and from compilation of published data made at the In-
stitute of Social and Economic Research. Where we have obtained more up-to-date figures
in the course of making commodity studies, we have substituted these.
It will be noted that the figure of total crop land does not agree with the aggregated
acreages for the individual crops. Crop land is defined as: "Land under tree crops and
medium and short term crops, land in process of preparation for crops or normally
cropped but fallow. "
In the Jamaica figures we find that the aggregate of land under the various crops is
greater than the total of crop land. This is mainly because there is extensive intercropping
in coffee, cocoa, bananas, coconuts and more particularly among roots and vegetables and
fruits mainly consumed domestically. In Trinidad and Tobago there is less intercropping
so that the difference is smaller. In British Guiana, known totals for rice and sugar are
given for past years, while data for other crops was taken from the 1952 census in which
a reconciliation had already been made.
For the Windward Islands, Leeward Islands and Barbados we find that the aggregate
acreage of individual crops is lower, not higher, than the figure of total crop land, in
spite of the fact that some intercropping takes place (although not as extensively as in Ja-
maica). The difference in those totals is thought to be due mainly to the fact that the 1956-
58 sample surveys of the Windward Islands omitted some crop land then in fallows, and may
have omitted a number of small lots under crops. These differences underline some of the
problems associated with using available source material. Although we get this discrepan-
cy in the total, some figures of individual crops (for instance, rice, sugar, cotton and
banana) are probably rather more accurate than those for food crops and tree crops.
Starting with sugar cane, we shall discuss the sources and assumptions on which the
figures relating to scale of production are based.
The main sources of data on sugar cane are the British West Indies Sugar Association
and Sugar Manufacturers' Associations in the various territories, and also information
from agricultural departments. Although of rather greater reliability than information re-
lating to most crops, sugar information is by no means perfect, particularly in relation
to the Windward Islands where there are no large sugar exporting industries and because
much of the crop is produced by peasants.
Sugar cane acreage can be expressed in two ways, either as acreage cultivated or as
acreage reaped. Sugar cane takes at least 15 months to mature so that of the overall
acreage, only cane that is ripe will be cut. The acreage reaped is thus usually slightly
lower than the acreage cultivated but is not usually lower than 90% or higher than 96% of
the cultivated acreage. The amount of cane that is uncut at the end of a season due to im-
maturity may be the result of a deliberate planting policy; but in recent years, many acres
of mature cane have remained uncut because of strikes, labour disputes, incendiarism,
and in some cases, acute seasonal and regional shortages of labour which could not always
be cured by calling on labour from other more populous islands or areas. In one or two
cases, factory breakdowns have been to blame.
In Table lla, we have shown acreages reaped for the period 1940-60 as this figure is
considered to be more reliable than the figure for acreages cultivated. It will be noted
that the acreage increased from a total of 231,000 acres in 1940 to 443,747 in 1960. The
greatest increase was in Jamaica-44,484 to 186,787 acres.
Several estimates of future sugar cane production have been made for this study and
account has been taken both of the trend since 1940 and the trend since 1950 which is less
steep than the former. Consideration has been given to the limitations on good sugar land
which have already slowed down expansion in such territories as Barbados and St. Kitts
and are likely to be more important in other territories in the future than they have been
in the past. The projections shown in Table llb are thus based on a rate of expansion of
acreages of 5% between 1958 and 1965, 3%between 1965 and 1970 and l%between 1970 and
1975. In Table llc acreage reaped is taken at 95% of the total under cane for projection 1,
and 90% for projection 2.
As regards rice, no, or little expansion is seen in the acreage of the two smaller pro-
ducers, Jamaica and Trinidad and Tobago, but in British Guiana, by far the largest pro-
ducer, the expansion of the rice industry and its development as a major exporter are ma-
jor policies of government and the industry. Three major development projects are under-
way which will bring new acreages into rice production. Programmes for the drainage of
now unused land will eventually bring into cultivation an additional 100,000 acres for rice.
Although there might be small increases or decreases in acreages of present small holders,
it is evident that these are likely to be very marginal in comparison with the major schemes
Although occupancy of these lands has already started, organisational difficulties such
as lack of credit, housing, and the need for frequent cleaning may make the rate at which
they are occupied slower than was at first expected. Thus the increase in acreages actu-
ally in production is projected as being quite gradual. Past increases in rice acreage are
shown in Table 12aand the projections are shown in Table 12b.
We have shown past scale of production of bananas, by acreage over a past period in
Table 13a and in Table 13b by the number of bearing roots in 1958, by farm size. The
figures for the time series are felt to be of very dubious reliability. After careful consi-
deration we have often had to select what we felt to be the best of several contradictory
sources.
In banana production, both land and labour are seen as possible limits to acreage ex-
pansion. In Jamaica, the problem is reduced fertility, particularly on slopes where the
natural vegetation has been removed and erosion has been permitted. This problem is
also apparent in the Windward Islands, although in both Dominica and St. Lucia, due to
land tenure problems, better banana land lies idle while inferior slopes are cultivated,
and there is much room for expansion. Serious discussions have already been held re-
garding the start of an export industry in British Guiana. Here, land is likely to be plen-
tiful, but we do not consider there is likely to be a major development in this period.
Naturally, at the present time, marketing problems tend to overcloud the future banana
situation; nevertheless, we do not think land limitations are a negligible factor and have
given the above considerations some weight in making supply projections.
Sea island cotton is grown only in the smaller islands, and although production is very
small it is important in the economies of small islands such as Nevis and Montserrat.
Table 14a shows the acreages under this crop in the West Indies since 1940. The assump-
tions underlying acreage projections shown in Table 14d are that in Antigua, only peasants
will be operating towards the end of the period. The 1,200 acres still in production in
1974/75 is considered to be land suitable for cotton only. In Montserrat, it is considered
that 1, 000 acres or so may be in production, in spite of emigration, because of limited
feasibility of other crops. Similar limitations may apply in Nevis, but here it is thought
other crops will win land from cotton. In St. Vincent it is thought that other crops will
inevitably win land from cotton. Thus we conclude that this industry is likely to decline
Irom about 6,112 acres in 1959/60 to about 4,200 in 1974/75.
If the acreage declines to this extent, it is also possible that sea island cotton might-
go out of production altogether since it can be spun only on certain spindles and it may be
uneconomic for the processing to be continued if only a negligible quantity is produced.
Ascertaining the scale of production of citrus trees and coffee for this study has presen-
ted innumerable problems; many of these trees are grown in scattered plantings and can-
not easily be enumerated. The acreage figures shown in Tables 10a to 10d are based on
acreage equivalents estimated in some cases from source material which gives tree popu-
lation only. The acreages have, in some cases, been estimated from conversion factors
suggested by the Farmers Guide (Jamaica Agricultural Society) and from various agricul-
tural ministries and departments.
Figures of tree population for citrus are shown in Table 15a. Since figures for acreage!
of both citrus and coffee are considered of dubious reliability, we have not detailed the pro
section any more than to present estimated acreages in Tables 10a to 10d; but we have pre-
sented detailed figures of final, total supplies for citrus (Table 15b) and coffee (Table 16).
For cocoa, estimates have been more easily obtained, since there have been major re-
planting schemes in all major producing territories which plan to replace all old planting
with new clonal material. However, estimates going further back than 1958 are still of
extremely dubious reliability. So we have not considered it relevant to include a past time
series (Table 17a). The projections shown in Table 17b are based on the replanting pro-
gramme. Estimates in more detailed form are shown in Tables 17c and 17d. Production
from different aged trees, and acreage bearing at different dates can be derived from these
tables.
For coconuts, as with other tree crops, acreages and figures of tree population are dif-
ficult to come by. To some extent, we have had to work backwards from known data re-
garding final tree yields and land use as between non-bearing and bearing trees to derive
most of the information on scales of production so that our figures must be considered vere
provisional, particularly in respect to Trinidad and Tobago and Jamaica. There are very
definite limits to land available for coconut cultivation in the West Indies since this crop
will grow well only in fairly low lying, but well-drained land. Our projections of acreage
are thus trends towards limits. In projecting production of copra, we fitted an asymptote
curve of the type yc = k + a(bx) with known acreage as the limiting factor. This was also
a close fit with figures of copra production over the past decade. Of course, improvements
in production per acre could alter this trend, but we have felt with most crops perhaps
more particularly with this one -that the land limitation is a real one within this period.
Even in British Guiana, where a number of sand reefs could be used for coconut cultivation
the additional acreage possible is not high as most of the coastland has poor draining, un-
less artificially drained-usually not an economic proposition for coconut cultivation.
The figures for coconut acreage and tree population are shown for a base year and for
1965, 1970 and 1975 in Table 18b, and figures for past copra production in Table 18a.
No accurate figures exist to show past trends in acreage of domestic food crops. So
much of these products is grown on small lots, not recorded in the 1943-46 census, that
a comparison between figures at that census and later surveys is not valid. We believe
however, that the acreage of root crops is declining in Jamaica and possibly also in other
territories, and we attribute this partly to migration, partly to urbanisation and partly to
the growth of banana and cocoa cultivation by peasants, particularly in the Windward Is-
lands. Early and very provisional figures from the 1961 census also indicate that a num-
ber of small, mainly subsistence farms may have gone out of production in Jamaica due,
no doubt, to migration, or in some cases to farmers finding employment in the mining in-
dustries.
We expect a continued decline in the acreage of roots and little change in the acreage or
vegetables. The acreage of corn and pulses appears to have been declining in all areas
since 1950 and we expect this trend to continue. Our conclusions are summarised in
Table 19.
We should emphasize however, that we consider roots and vegetables may be fairly
competitive with certain cash crops for land; thus price factors, which we shall discuss
in a later section, may be more important than for products which have a more specialized
land need.
Only marginal increases in acreage under tobacco are predicted because methods of
cultivation and the cash return are making the crop generally uncompetitive with other
crops (see Table 20).
The scale of production of crops is measured in acreage or tree population. In livestock
production we have preferred to consider stock numbers of more relevance than acres un-
der pasture (although with the development of greater acreage of improved pasture the con-
cept of acreages and yield per acre becomes more meaningful). Totals of grassland im-
proved and unimproved are, however, shown in Tables 9a and 9b.
Livestock numbers at specified censuses as compared with those at a later date appear
in Table 21a, and projections of livestock numbers appear in Table 21b. Although there
may be some difference in coverage among smaller farms, the comparisons are probably
rather more valid than would be a similar comparison for crops, acreages or tree popu-
lations. Comparisons are not available for all territories because of the lack of data.
Cattle population increased in Jamaica, Montserrat, and Trinidad and Tobago, but ap-
pears to have remained unaltered or decreased slightly in other islands. The increase in
Jamaica's herd, which is believed to be continuing, is largely a result of the developments
in the beef industry pioneered by the mining and sugar companies. Since Jamaica's costs
are too high at present to make exportations of beef feasible, Jamaican livestock populations
are likely to be increased only in response to the local demand position, supply conditions
permitting.
Certain limitations may, however, make supply lag behind demand. Natural rates of
increase can only permit a growth in meat supplies of about 10% per annum unless new
stock is introduced. The dairy industry, moreover, has been thwarted in its development
by marketing, management and organisational problems, and if these should be overcome,
supplies of beef might show no increase temporarily while changes in the structure of the
cattle population take place.
We consider that in all territories there will be a relative increase in dairy herds as
compared with beef herds. We expect, however, that many islands, particularly those in
which crop cultivation has been affected by migration, will expand meat production. Many
of the small islands already have a high cattle population, however, and indications are
that increases in production must come from livestock improvement rather than more
cattle.
In British Guiana, where grazing is very extensive, we expect the growth of numbers
to be limited to some extent by reproduction rates and to some extent by lack of capital for
developing new areas. Here again we expect that production increases must come rather
from pasture and livestock improvement, than from greater numbers of livestock.
Figures of small stock population are not reliable. We believe that the goat population
would decline if better methods of agriculture and husbandry were practised since goats
are destructive to economic plants and must be fenced out of improved pasture. It is al-
most certain that goats cause economic losses almost equal to the value of their increment
to the net product although they are of undoubted value to inhabitants of arid, non-produc-
tive regions. Although we can only go by guesswork based on observation, we believe the
goat population will tend to decline as higher standards of living are reached.
Pigs, like goats, are at present mainly scavengers in the West Indies, living on what
they can find. However, more farmers are rearing pigs as a farm activity. They are
generally fed on coconut meal when feeding takes place, so that it is believed that their
expansion may be partially related to growth of the coconut industry. A recent report on
the pig industry recommended that it would be more economic to import feed and export
coconut meal, but it is considered doubtful that this change in the economic pattern of the
industry will take place.
No section of agriculture in the West Indies has been revolutionized so much as has the
poultry and egg industry in the last decade. Here a major changeover has occurred from
the backyard poultry system to proper methods of feeding, rearing and housing. Unfortu-
nately, no comparable figures are available in two periods for Jamaica, Trinidad and To-
bago, and British Guiana and we have not found it possible to make an accurate assessment
of the extent to which scale of production, as compared with yields, is responsible for the
vast increase in supplies both of poultry meat and eggs that has taken place over this
period.
Chapter 3
THE EFFECT OF CHANGES IN INTENSITY OF PRODUCTION ON TOTAL SUPPLY
In this chapter we shall consider the influence that changes in intensity of production
have had and are likely to have on supply.
In measuring intensity of production we have related a quantity of product to land area,
as for instance, tons of cane per acre, or a quantity to unit of production such as coconuts
per tree, or pounds of meat per carcass, milk per cow, and so on. In this section we dis-
cuss the quantitative results of our conclusions on yields. In chapters 5 and 6 we discuss
qualitatively the conditions which influence yields.
In measuring the influence of yields in total product we wish to abstract this from the
effect of scale on product. One method of doing this is to relate the yields of a base per-
iod to the acreage of a later period and relate the total product that results to that which
actually occurred in later years. This can be expressed by the equation
Qo
Q Rn -
100 =n R R = X Yield factor
Qn
where Q = Base period yield, Rn= Acreage at period n and Qn = Supply at period n.
R
0
If we use this equation to relate total production of milled sugar, we find that, compar-
ing the period 1940-49 with the period 1950-59, the product for Jamaica in the second
period is 5.5% lowerthan it would have been with the yields of the first period; that for Tri-
nidad andTobago it is 20.3% higher; for the Leeward Islands, Windward Islands and Barba-
dos it is 23% higher; and for British Guiana 17.5% higher.
Changes in quantities of milled sugar are due mainly to changes in yields of cane per
acre. Factory efficiency and the sucrose content of cane must also influence the quantity
(see discussion of processing-chapter 6). Yields of cane per acre for the period 1950-60
are shown in Table lId. Production of sugar, 1940-60 is shown in Table 11h.
We have first projected yields of cane per acre; these are shown in Table 11e. In pro-
jecting these yields, various considerations have been taken into account which are de-
scribed in chapters 5 and 6.
If we apply the yield factor to the total product of cane and the acreage under cane for
1965, 1970 and 1975, and compare it with the period 1950-59, we find that of the total
supply of sugar cane in 1975, 32% is due to a projected increase in yields in Jamaica; 13%
in Trinidad and Tobago. 7% in the Leeward Islands, Windward Islands and Barbados, and 5% in
British Guiana. The recovery of milled sugar from sugar cane is projected at the same rate
as that for 1940-60 (see Table llf). Table Ili shows projections of sugar production.
For bananas, yields can be expressed in pounds which relate to stems per root or stems
per acre (which is also of course a function of roots per acre). Table 13c indicates that
there is a great variation between these factors in different territories. Since the exact
influence of the root/stem ratio as compared with the root/acre ratio on actual yields
cannot easily be predicted, we have simply projected the yield in terms of pounds and
stems per acre. Applying our yield factor to total projected production and acreage, we
estimate that in Jamaica, Trinidad and Tobago, and Grenada there will be no change in
yield; in Dominica and St. Vincent, 5% of the additional production in 1975 will be due to
increases in yield and in St. Lucia 3"' will be due to changes in yields. (See Table 13e.)
See Table 13d for projected acreages of bananas.
Rice yields for the periods 1951-55 and 1956-60, and projected for the years 1965,
1970 and 1975 are shown in Table 12c. The yield factor between the 1956-60 average and
1975 is 27% in Jamaica, 14% in Trinidad and Tobago and 14% in British Guiana. Projec-
tions of rice production are shown in Table 12d.
Yields for sea island cotton during the period 1940-60 are shown in Table 14b. It will
be noted that yields per acre increased in the area as a wholebetweenthe 1940's and the 1950's,
although they did not increase in all territories. Projected changes in yields for the years
1965, 1970 and 1975 are slightly higher than for the year 1960, but rather below the ave-
rage of 1955-60. This means that changes in yields will have a negligible effect (Table 14e).
Information on citrus and coffee, roots, vegetables, corn and pulses has been of so du-
bious a nature that we have preferred to make projections in terms of total supply only.
Although approximate projections of acreages are included in Tables 10a to 10d, so as to
indicate roughly the changes in land use, it is not felt that they are reliable enough to use
as a basis for projection of yields.
For cocoa, however, more reliable information exists on account of the new planting
programme. Because of this programme, yield factors are very important in local supply
and, comparing the 1975 projected supply with the 1960 supply, we find that in Jamaica
2.3, of the increased supply (expressed as yields per bearing acre) is a result of yield
factors, in Trinidad and Tobago 21.6%, and in Grenada 34%.
Some figures showing estimates of coconut yields are shown in Table 18b. There is a
complete lack of reliable information on past yields per acre or per palm. The yield fac-
tor, in terms of nuts per acre is approximately 10% in Jamaica and Trinidad and Tobago,
and 12% in other territories. But, data are not considered reliable enough to estimate
effects of the bearing/non-bearing ratio on yields in the future.
No information is available on the yield factor in tobacco but the yield in Jamaica in the
past has been about 410 pounds per acre-about half the world average.
There are a number of methods of measuring cattle yields; one can measure return in
meat per acre, meat per animal slaughtered and meat produced in relation to total cattle
population. Figures for slaughterings are not complete because only registered slaughter-
ings are available. There seems little case for reckoning returns per acre in an area
where so little grassland has been improved. We have taken as a crude measure the meat
per head of the total cattle population and quarts of milk per head of the population of cows
of two years and over.
These estimates show little change in the relationship between meat and cattle popula-
tion. The reason for this, however, is partly that we have projected an increase in the
proportion of cows to total cattle for most areas. In terms of yields of meat per acre of
pasture, we expect some increase as more improved pasture comes into being, but we
cannot express the yield factor quantitatively. The relationship between cow numbers and
total milk supplies is more exact. Here the yield factor as between 1958 and 1975 is esti-
mated at 18.7% in Jamaica, 4.8% in Trinidad and Tobago, 10.4% in the Leeward Islands,
Windward Islands and Barbados and 9.4% in British Guiana.
Chapter 4
THE ESTIMATION OF TOTAL LOCALLY PRODUCED SUPPLIES OF COMMODITIES
We have endeavoured to isolate the factors influencing yields and total acreage in the
base period to ascertain the importance of each in total supply. It should be noted however
that many of our source data gave total production as a more reliable figure with rather
less reliable information on yields and acreages. However, having tried to isolate the
scale factor from the intensity factor in the base period, we have for most products pro-
jected these two factors and derived total projected supply from these. It should be em-
phasized that the supply projections were drawn up independently of the demand projections.
Although in the case of subsistence or non-cash consumption, reconciliation had, ofcourse,
to be made at an early phase of the study.
For sugar we present final supply tables for milled sugar. The totals for cane can be
derived from tables of yields and acreages (Tables lie and 11f). It is the final product,
milled sugar, with which we shall mainly be concerned in our comparison of demand and
supply.
Final productions of rough rice and milled rice are shown in Table 12a and final projec-
tions are shown mainly in the form of milled rice, with milling rates indicated (Table 12c).
Total production figures for bananas for a past period are not very reliable but we show
projections in Table 13e. For sea island cotton, past trends in production are shown in
Table 14c and projections of production in Table 14f. For tree crops, data on past pro-
duction is extremely scant; we have, however, shown some figures for citrus in Table 15b,
coffee in 16, cocoa in 17a, and copra in 18a. Total production figures for the projections
are shown in rather more detail for cocoa, for which crop the new planting programme has
enabled better estimates to be made than for other tree crops. For vegetables and roots,
figures of acreages and yields were virtually non-existent and our estimates are based
much more on our assessment of the total products. (See Table 19.) Naturally, estimates
of the acreage and yields were used in this assessment, but for the base year at any rate,
estimates of the total supply were considered more reliable than estimates of average
equivalents.
For livestock products also (see Table 21c), the base year estimates depended on
assessments made of supplies coming forward rather than on assessments of numbers and
yields. For milk, for instance, the total supplies to households and to the condensery were
the basis for the estimates. Data on yields were fragmentary, but of course yields and
stock numbers were taken into account when projecting future supplies.
Then the method of estimating future supplies depended very much on the availability
of different types of source data. In some cases we were able to work purely from inde-
pendent projections made of yields and the scale of production acreagess, tree numbers,
livestock numbers, etc.), while in others we were inclined more to picture local supply
itself, as the first assessments have given due weight to what fragmentary data were
available on the factors influencing supply.
Chapter 5
FACTORS INFLUENCING YIELDS AND PRODUCTION:
ECONOMICS AND FARM ORGANISATION
Changes in growers' prices 1955-60
Comparative prices cannot mean a great deal in areas where the general price levels
are different. However, the figures in Table 4. 5. i below do give some indications of re-
cent changes in prices paid to growers of sugar cane.
Table 4. 5.i
Prices per ton paid to farmers for sugar cane by territories, 1955 through 1959
Territory 1955 1956 1957 1958 1959
BWI$
Jamaica 12.44 12.78 14.68 13.16 12.66
Trinidad and Tobago 11.97 10.98 14.53 11.44 12.30
Antigua 11.65 11.30 14.61 11.00 13.20
St. Kitts 12.80 12.21 16.54 13.01 13.20
Barbados 15.17 14.68 17.55 14.87 15.80
British Guiana 8.94 9.48 11.05 9.00 8.70
Source: British West Indies Sugar Association.
Prices for cane vary to some extent with the sucrose content of the cane and also are
influenced by the average price per ton of sugar exported, which itself may depend on how
much has to be sold outside the negotiated price quota. It will be noted that 1957 prices
were highest but that in most territories 1959 prices were higher than those of 1958.
If the production of cane reaches the figure which we have predicted we expect an in-
creased proportion of total sugar will be sold at prices below the negotiated price. How-
ever, the effect of this is likely to influence prices by approximately 8% to 10% in any one
year.
In British Guiana the price of higher quality rice has risen consistently since 1955 as is
shown in Table 4. 5. ii.
Table 4.5. ii
British Guiana: Prices per 180 pound bag of rice, 1955 through 1960
Export types f.o.b. Local
Year Supergrade First Second Brown A
BWI$
1955 19.65 18.75 17.85 17.05
1956 19.65 18.75 17.85 17.05
1957 19.50 17.85 16.05 17.05
1958 21.30 19.20 16.95 18.80
1959 21.30 19.20 16.95 18.80
1960 21.30 19.20 16.95 18.80
Source: 1. Reports of British Guiana Rice Marketing Board 1950-51 to 1960-61.
2. Reports of the Rice Conferences.
The price of rough rice paid to growers who sold rough rice directly to the mills in-
creased from $3.25 per bag of 140 lbs. in 1950 to $6.80 per bag in 1961. The average price
paid to growers who sell milled rice rather than rough rice has depended on changes in the
export price but, in general, has followed the trend shown in Table 4. 5. ii.
In Jamaica, growers of bananas are paid on the basis of the count bunch but in all other
areas by weight, which makes comparison difficult. Growers in all territories are paid
on the basis of actual realisation, which final price is the true grower's price. There are
seasonal variations in banana prices, but Table 4. 5. iii gives the average prices in Jamaica
and the Windward Islands over the period 1955-60.
Table 4. 5. ll
Annual average prices of bananas in Jamaica and the Windward Islands,
1955 through 1960
J a g a, Jamaica growers, Windward Islands
Year Jamaa g shillings per growers,
J per ton
count bunch cents per ib.
1955 74. 8. 0 9/- 4.75
1956 73. 1.0 9/2 5.00
1957 77.3. 0 9/6 5.00
1958 74. 1. 0 9/5 4.00
1959 68. 3. 9 8/10 4.75
1960 66.2. 10 8/8 4.00
Source: Data and material developed during the study and other available data.
This indicates some decline in growers' prices following a decline in the Jamaica green-
boat. or export. price, which is also used as an indicator for deciding growers' prices
in the Windward Islands.
Information on price changes is not easily available for all products, but Table 4. 5. iv
shows some recent changes in prices which will indicate the general trends for the various
commodities.
Table 4. 5. iv
Prices of various commodities, 1954-55 through 1959-60
Growers' prices F. 0. B. prices
Year Coffee, Cocoa,Jamaica, Copra, West Indies Cotton, MSI 2/
Jamaica, shillings per area export price, Antigua, BWI cents per
price per pound 100 pounds BWI $ per ton pound clean lint
1954/55 2s. 5d. 254 300 106-112
1955/56 2s. 5 id. 154 300 100-106
1956/57 2s. 6d. 129 300 110-116
1957/58 2s. 5d. 104 300 111-117
1958/59 2s. l d. 154 320 99-105
1959/60 Is. 9 d. 154 340 84- 90
1/ Rates for smaller quantities than 100 pounds are slightly less.
2 MSI (\Montserrat Sea Island).
Source: Data and material developed during the study and other available data.
When we summarise all the trends in export crops we cannot but conclude that there has
been a slight decrease in all products. The two crops in which there have been price in-
creases, copra and rice, are those for which the export market is mainly or wholly a re-
gional one. All other prices reflect the general world situation of falling commodity prices
since 1955. However, due mainly to established markets and trading agreements, price
fluctuations are rather less than would be exhibited in the world market over the same
period.
Turning now to domestic food crops and livestock products, we find that information on
growers' prices is fragmentary. Although movements in retail prices are not exactly the
same as movements ingrowers' prices, the broad trend is the same.
The retail prices of all foods were about 10% lower in the country although Irish pota-
toes and tomatoes were frequently higher. The retail price index for all food items in-
creased in Jamaica from 100 in December 1955 to 103.5 in December 1956, 105.9 in De-
comber 1957, 109.6 in December 1958, 112 in December 1959, and 122 in December 1960.
Table 4. 5. v shows retail prices for selected foodstuffs in Kingston for various periods
from 1955 to 1961.
Table 4. 5. v
Retail prices for selected foodstuffs in Kingston, Jamaica, for selected periods
Commodity 1955 1959 1960 1961
Commodity
Dec. av. annual av. annual av. annual av.
Pence Pence Pence Pence
Roots, yams, lb. 5.17 6.14 6.50 6.92
Sweet potatoes, lb. 4.00 4.62 4.88 5.15
Irish potatoes, lb. 4.75 6.00 6.60 6.00
Pulses, red peas, pt. 31.50 33.75 33.00 33.56
Plantains, each 3.10 5.18 4.90 5.24
Cornmeal, lb. 4.50 4.50 4.50 4.50
Oranges, doz. 12.72 21.55 19.33 25.41
Tomatoes, salad, lb. 13.08 11.20 12.10 12.00
Beef rib roast, lb. 27.00 33.00 33.00 45.33
Mutton, lb. 30.00 41.00 38.00 36.10
Pork, lb. 24.00 31.00 30.00 31.50
Fish, snapper, lb. 26.00 30.00 27.60 29.00
Source: Data and material developed during the study and other available data.
In Jamaica, beef prices show the most marked increase. The price of this product
was controlled between 1940 and 1960 although between 1950 and 1960 the controlled price
increased from JE4. 15. 0. per 100 pounds liveweight to J7 per 100 pounds liveweight, or
or 180s. per 100 pounds w.d.c. 1/ After decontrol the price increased to about 240s. per
100 pounds w.d.c. 1/ It is too early to say what effect the decontrol has had on supplies
since slaughterings in 1961 must to some extent have been the result of decisions made
before price control. Also the number of legal as against total slaughterings would in-
crease after decontrol anyway. Supplies were increasing in 1962 and the price appeared
to be stabilising, averaging 48 J pence per pound in the first six months of 1962, which
would indicate that a new equilibrium is being established.
In Trinidad and Tobago, the food section in the retail price index increased from 100
in January 1952 to 126.5 in December 1955 to 138.9 in December 1959. Noting some in-
dividual prices, it is observed that fresh beef increased from 77.9 cents per pound in 1955
to 86.2 cents per pound in 1959, fresh pork from 77.3 cents to 83.6 cents per pound, sweet
potatoes from 9.7 cents to 10.3 cents per pound, yams from 7.1 cents to 10.6 cents per
pound and tomatoes from 31.1 cents to 36 cents per pound. Trinidad and Tobago imports
much of its sweet potatoes from St. Vincent and there is little doubt that competition from
banana, and also emigration of growers has reduced the supply and increased prices.
1/ Warm dressed carcass.
The shape of the supply-price function
While in some underdeveloped economies with a large peasant sector, aggregate agri-
cultural supply functions are thought to be negatively rather than positively price elastic,
recent trends in the West Indies indicate that the supply price function for all agricultural
commodities is generally positively elastic, and not least so in areas of peasant produc-
V tion. In fact there are sound indications that peasant responses to price increases up to
1957 were greater than those of estates. This is probably due partly to the fact that estate
lands have not been so easily extended as have peasant lands and also to the fact that es-
tate labour costs have increased as greater peasant opportunities have emerged.
The amount of substitution of one crop for another which can take place following rela-
Stic price changes is somewhat limited by physical conditions in some places, and also to
/ some extent by organisational factors. If, for instance, no mill exists nearby to accept
deliveries, sugar will not be grown; or one might cite the case of specialisation in arrow-
root in St. Vincent and nutmeg in Grenada which has been partly due to the existence of
marketing organizations. Some substitution has undoubtedly taken place in response to rel-
;a\ve price changes, but we believe that this has been marginal in the case of export crops
and has probably seriously affected the production of roots and vegetables only. Root crops
may actually have declined in acreage or remained static. The output of vegetables and
other domestic foods has not increased in line with population increases.
We consider therefore that price-supply responses have been positive for most of the
main export products, although not necessarily positive for domestic food crops. The re-
lationship is not measurable in quantitative terms, partly because the price levels, which
have tended to stimulate supplies, have been price levels of an undefinable period. In tree
crops, for instance, we consider that until recent years, memories of pre-war prices,
and fears of a return to such levels of prices may have inhibited some expansion, while for
most of the shorter term crops, last season's prices will probably have had a greater in-
fluence in the amount supplied.
Returns to growers
Table 4. 5. vi shows recent est mated gross returns per acre per annum for various
crops.
Although production costs have been estimated for various crops these have been gene-
rally for one or two farms only. Only for rice have properly sampled studies been made
(Ref. S.b.2. and S.b.3.) 2/. One of the problems however is that straight comparisons be-
tween estate and peasants are meaningless since the peasant and his family undertake most
of the work on a peasant farm.
Considering peasant production alone, however, some calculations made at various tim(
for national income estimates indicate very roughly the receipt per acre for labour and
profit after all outgoings have been met. These figures indicate that where banana can be
grown it is the most profitable crop for peasants in terms of returns per acre. In terri-
tories where banana is not grown, sugar is generally more profitable than ground provi-
sions, vegetables or coconuts, on a per acre basis.
2/ A cost survey for cocoa has been undertaken in Grenada.
Table 4.5.vi
Gross returns per acre per annum to growers for selected products, by territories
Territory Sugar cane Cotton Copra Banana Ground provisions 1/
BWI dollars
Jamaica 278.9 90.8 228.2 110.0
Trinidad and
Tobago 346.3 95.0 411.4 NA.
Barbados 478.8 -- -N.A.
St. Vincent 275.0 192.0 134.0 320.6 150.0
St. Lucia N.A. 110.0 N.A. N.A.
Grenada N.A. N.A. N.A. N.A.
Dominica -- 140.2 443.2 N.A.
St. Kitts 404.6 N.A. N.A. N.A.
Antigua 188.1 200.2 N.A. N.A.
British Guiana 362.1 89.0 -N.A.
1/ Roots crops.
Source: Data and material developed during the study and other available data.
In certain conditions rice yields more revenue than sugar for a small farmer in British
Guiana, and in Trinidad and Tobago and Grenada cocoa may yield more revenue than bana-
na. Conditions of production naturally influence these comparisons a great deal.
As regards estates, where sugar is grown on a significant scale it is considered the
most profitable crop; there are only minor cases of sugar acreages being given over to
other crops on estates and these are not representative. On the contrary, where substi-
tution has taken place, it has probably been in favour of sugar.
In the absence of more exact cost data, we can only give general conclusions. Fairly
definite trends are, however, in evidence.
The traditional sugar economy has not suffered from competition from the newer cash
crops such as banana and cocoa. Sugar still remains oneofthemostprofitablecashcrops.
Banana and cocoa expansion may have resulted in a decline in the acreage of less profit-
able domestic crops, particularly roots, but has probably been achieved mainly by more
intensive intercropping and by the cultivation of new areas. Supply has been positively elas-
tic to price increase for most products, and substitution effects due to relative price
changes have been negligible. It is not so certain whether we can predict a continuation
of this characteristic of positive elasticity, since available new areas are now limited.
(See part four, chapter 1.) Perhaps the most important factor is a negatively elastic la-
bour supply curve which is becoming apparent in some areas. This is discussed in the
section on labour and manpower problems in this chapter. Already there are indications
that supply-price functions have not been positively elastic to the same extent in the period
1957-62 as they were earlier, and we feel labour factors may be the main cause of this
change.
External trade agreements
The prices which are paid to growers for export crops are of course a reflection of the
world market price. The subject of the future of world market prices is outside the scope
of this study, and in particular we would not be in a position to make an assessment of the
effect that Britain's possible entry into the Common Market would have on the return for
the various commodities. We feel it is relevant, however, that we refer to the price ar-
rangements which apply to sugar, copra and rice, and to some of the buying arrangements
for other products.
Although as far back as 1929 a commission suggested to the United Kingdom Govern-
ment that colonial sugar should be purchased at a fixed price, no measures were taken un-
til 1932 when the United Kingdom introduced Colonial Sugar preference certificates by which
all sugar exported to the United Kingdom received an extra 1 per ton over the world price.
This price was not sufficient to alleviate a condition of bankruptcy and severe unemploy-
ment which existed in West Indian Colonies. During the war a guaranteed market was of-
fered but shortages of equipment made it difficult for producers to improve their produc-
tive capacity or increase their efficiency. Between 1946 and 1949 the United Kingdom Gov-
ernment guaranteed a market for West Indies sugar and these guaranteed marketing ar-
rangements were extended to 1952. World prices were considerably higher on the average,
however, when the British Commonwealth Sugar Agreement came into being. The agree-
ment was initially extended to 1959, and has now been extended to 1968.
Under this agreement all Commonwealth countries agreed to an export quota, the over-
all agreement quota. Of this total, two-thirds was to be purchased by the United Kingdom
at a price which would be negotiated annually and which would be based on costs of produc-
tion rather than on world prices. The West Indies share of the overall quota is 900,000
tons: only 640,000 tons was, however, the negotiated price quota (revised to 672,000 tons
in 1960). The difference between the overall agreement quota and the negotiated price
quota is sold at the world price plus the advantage of preferential tariffs applicable to all
Commonwealth countries. Any exports over and above the 900,000 tons can be sold in
world markets at the world price. In addition, however, the Commonwealth producers
have a quota of production under the International Sugar Agreement.
Since 1954 total production has exceeded the overall agreement quota for the West In-
dies, and the quantity of sugar sold in unguaranteed markets increased by 1960 to 157,148
tons. The West Indies has from time to time obtained the benefit of short-falls by other
Commonwealth producers. Also, since the United States embargo on Cuban sugar, part
of the West Indies surplus has been disposed of to the United States at premium prices.
The quota premiums will be reduced by 1964, but it is expected that a more certain U.S.
market will exist so long as the present political situation between Cuba and the United
States persists.
Thus, in spite of the growth of non quota production in the area, prices, when averaged
over the whole of the exports, have only been influenced marginally.
Although we have predicted a fairly substantial increase in production up to 1968, we
do not consider for the reason given above that the average price will be seriously affec-
ted although a decline of up to 10% might be expected. The events after 1968 are uncertain,
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