Agricultural Diversification: A Strategy Out of the Economic Difficulties of the Sugarcane Industry

Abstract

There is tendency to view agricultural diversification as crop diversification with the tenets of multiple cropping, crop rotation, and so on. Small island states which are characterized by being single crop producers for export in a protected market have realized that they must now compete in a hostile trading environment with limited resources. Diversification has had limited success in the past, and possible reasons given were that the alternate crops were not economical and the policymakers have not been able to convince farmers that they were profitable. In 1983, Caroni (1975) Ltd, a state-owned company, embarked on a diversification programme based on the fact that the company was unprofitable for the previous eight years. This together with the declining fortunes of sugar forced the Board of the company to engage in agricultural diversification. Diversification was viewed both as a means to improve profitability and as a means to reduce the risk to which the company exposed itself as being a single commodity producer. This chapter reviews operations and financial management, crop productivity and efficiency, praedial larceny and losses, internal organized pilferage, trade unionism and work to rule, and the general view of the public and politicians over the 20-year period of this company. The lessons from the failures and success of that project inform future attempts at diversification.