AS global attention continues to be riveted on the nexus between fuel and food, and the multiple international upheavals which have snowballed into spiralling cost for food, Trade Ministers of the Caribbean Community (CARICOM) will this week zero in on how the rising cost of fuel and commodities is impacting on the Region’s economies. The matter is one of the key agenda items of the 32nd Meeting of the Council for Trade and Economic Development (COTED) to be convened at the Pegasus Hotel, today and tomorrow.
Among the other items the COTED will consider are developments related to the CARICOM Single Market and Economy (CSME), and the Economic Partnership Agreement (EPA).
CARICOM ministers with responsibility for trade will place in context the situation in the Middle East and North Africa, and the impact on regional economies of the situation unfolding in that part of the world. They will also focus on the regional response to rising costs of both energy and food.
The current unrest in the oil-producing Middle East and North Africa, following so closely on the heels of other global upheavals, including the financial and economic crisis, have been blamed for the current spell of surging fuel and food prices which have resulted in deleterious effects on regional economies, the majority of which are net importers of both oil and food.
Oil prices reached US$115 a barrel in mid-March, 2011, an increase of over 40 percent from an average of US$80 a barrel in 2010. Food prices rose 52 percent between 2007 and 2008. In January this year, the Food and Agriculture Organisation (FAO) Global Food Price Index surpassed the high level it had reached in 2008. Specialised international agencies have predicted that food prices will continue to remain at high levels into the foreseeable future.
The rising costs of these important commodities have trickled down to the region’s populace, driving down purchasing power and threatening any gains that were made towards the reduction of poverty.
The volatility of food prices has been on the agenda of several meetings of the Conference of Heads of Government of CARICOM, including a December 2007 special meeting, and the regular meeting in July 2008.
In 2008, Mr. Luis Alberto Moreno, President of the Inter-American Development Bank (IDB), acknowledged that the Caribbean was hardest hit by the food and energy price shocks.
Back then, the IDB’s analysis indicated that the effects of high oil prices exceeded those related to food in most of the Caribbean.
Mr. Moreno also said the IDB and the Caribbean Development Bank (CDB) were studying ways of reducing food prices in the region through an in-depth assessment of transport, logistics, taxes and tariffs and options for strengthening regional food production clusters.
In discussing the food/fuel situation then, the meetings of Heads of Government as well as those of the COTED had acknowledged that a combination of factors, including the high cost of grain, climate change, higher global demand for food, and the production of biofuels, was responsible for the increasing cost of food.
With regard to the latter, Heads of Government, at their regular meeting in Georgetown in July, 2009, while affirming that the production of energy and biofuels from biomass must be increased in a sustainable manner, nevertheless were adamant that such production should not compromise food security.
The community has also developed a Regional Food and Nutrition Security Policy that makes provision for short- medium- and long-term strategies in recognition of the fact that the region could no longer have an ad hoc approach to food security.  (CARICOM Secretariat)