Low farm gate price for cassava affects production
MANUFACTURERS of cassava by-products are pressing for more of the crop to be planted to satisfy growing demand in the local and export market.
The manufacturers say much higher levels of production are needed on a monthly basis to satisfy demand, but there are challenges with both of volume and quality.
Dale Crooks, factory manager at the Rural Agricultural Development Authority (RADA), which operates a bammy factory in Twickenham Park, St Catherine, told the Jamaica Observer, “We use...anywhere between 80,000 to 90,000 pounds [of cassava] monthly, if we get international orders. Fifty thousand pounds are needed for local demand. Most of our international orders are from the United States. We have been experiencing difficulty in sourcing adequate supplies.”
In 2021, just under 1,200 hectares of cassava were planted in Jamaica with 941 hectares dedicated to sweet cassava and 248 hectares producing bitter cassava. According to data from the RADA and the Jamaica Agricultural Marketing Information System (JAMIS), the main cassava-growing areas in the country are in the parishes of St Thomas and St Elizabeth.
Export data from the Statistical Institute of Jamaica (Statin) show that exports of both dried cassava, cassava flour and bammy have been on the rise since 2019.
Still, levels of production have not been able to meet overall demand.
The Business Observer obtained data from the Agro-investment Corporation, citing Agricultural Marketing Information Division (AMID) of the Ministry of Agriculture and Fisheries, which show that the farm gate price of cassava remains static at low levels, perhaps contributing to production levels. Agro-invest notes that fluctuations in production of cassava have marked the segment for the last decade as investment levels may be affected by poor farm gate prices.
Bitter cassava peaked at 345 hectares in 2015, falling to 248 hectares last year. Sweet cassava had been steadily increasing up to 2020 when production peaked at 1,233 hectares, but declined to 941 hectares last year.
While a large number of local buyers demand cassava as a raw material for their products, prices have remained low. The highest price for bitter cassava during the period was seen in 2019 ($56.26/kg). Whereas, the highest price for sweet cassava was seen in 2018 ($57.57/kg), according to Agro-invest.
During that time, prices climbed steadily but slowly from 2012, but not significantly in relation to the depreciation of the Jamaican dollar against its US counterpart. In January 2012, US$1 was valued J$86. In January 2022 that same US$1 was valued J$153.99.
LOW FARM GATE PRICE
Farm gate prices remain low when compared to the changes in the value of the currency. In 2012, the price per kilogramme for bitter cassava was $29.52, whereas that for sweet cassava was $36.88. In 2019 bitter cassava was priced at $56.26 per kilogramme, a price which fell to $54.33 per kilogramme in 2020 and further to $52.27 in 2022. The price per kilogramme of sweet cassava in the last three years was $52.58 in 2019, $53.91 in 2020 and $54.86 in 2021.
Agro-invest indicates that data obtained from RADA notes that the input cost is $210,575.00 per hectare of cultivation, which produces an average of 10lbs per plant, where 12,000 plants per hectare will yield approximately 120 tonnes.
Agro-invest asserts that most cassava is consumed locally with “exports being negligible”.
Buyers of cassava include Carleston Jamaican Bammies, Cherry Homemade Bammy, Creation Foods Ltd and Flower Hill Bammy. Others are Mello Bammies, Shavuot Foods Company Ltd, Twickenham Bammy and Willmac Bammies.
While farmers may not be seeing the returns expected, exporters have been reaping better results.
Bammies are responsible for the lion’s share of revenue from product exports. In 2019, total exports of dried cassava and bammy were valued at US$680,529. Bammy exports as a segment was US$665,066.
In 2020 bammy and cassava exports valued at US$1.21 million were exported, representing a significant increase as the novel coronavirus pandemic got underway.
Dried cassava was sold to Canada, the United Kingdom and the United States with cassava flour sold to Trinidad and Tobago. Bammy exported to Barbados, Australia, Canada, the Cayman Islands, St Maarten, the United Kingdom and the United States in that year valued at US$1.1 million.
Preliminary data for 2021 indicates that bammy sales surged to US$1.24 million with an additional increase in export markets. Export destinations last year were Antigua and Barbuda, Australia, Barbados, Bermuda, the British Virgin Islands, Canada, the Cayman Islands, St Lucia, French St Martin, Dutch St Maarten, the United Kingdom, and USA.
In 2021, over US$1 million in bammy products were exported to the main markets of the United States and the United Kingdom. In 2020 exports to these destinations were US$965,573. Export value of bammies to the UK and US in 2019 was US$543,285.
Manufacturers may need to increase the farm gate price as an incentive to increase production and support more exports.