Agriculture is a Business Investment, It is NOT a Way of Life


By Rudolph Williams
My expert friend always reminds us that agriculture is not a Way of Life, it is an investment and all the attendant business principles should be applied to agricultural investments. Agricultural operations in Northern and Central Belize have been catastrophically impacted by the ongoing drought episode affecting the region. Previously in this column I determined that the current drought episode is the most severe type of drought, a hydrological drought. The National Meteorological Service (NMS) has predicted that this episode will persist through November 2019.
It is noteworthy that Belize’s laws mandate the development of a National Water Plan for the better management of the nation’s water resources. A National Water Plan include plans for Drought, Irrigation, Water Quality Control, Drinking Water, etc. Developing plans for those components, independent of a National Water Plan, will maintain fragmented water resources management in Belize. The agriculturalist’s immediate response to drought is irrigation. Water is the main, not the only, component of an Irrigation Plan and such plans are not applied only during a drought episode.
The evidence of the occurrence of a hydrological drought are significantly reduced river and groundwater levels and the drying up of the wetlands and lagoons. Water availability is reduced and consequently abstraction costs become elevated. Also, as manifested in the New River, contaminants concentrations become elevated and more negatively impactful. A National Water Plan will include contingencies to refine the monitoring of the occurrences of drought episodes for more timely management of the negative impacts on agricultural operations. Drought forecasts are provided quarterly by the NMS. This forecast interval is equal to or longer than the 60 to 100 days required for planting and harvesting of corn.
In my opinion, based on the quantum of investments, agriculturalists should never rely on the chance that weather/climate conditions will conform to historically normal trends. History no longer foretells the future and there is too much to lose. The climate change impacts studies on Belize indicated that variations in the shifts in the wet, transition, dry and meagre seasons have no regular frequency. There is no guarantee that next year will be better than this year.
It is disheartening that the corn and soybeans farmers’ return on their investments will be miniscule to none this year. A businessman whose business is vulnerable to climate uncertainty should have a facility to address the impacts of such uncertainty. When bankers issue personal loans there is an accompanying individual insurance in the event of loss of income or death. The operators of vehicles are required to carry insurance in the event of catastrophic road traffic event. The Government of Belize and other Caribbean nations buy insurance from the Caribbean Catastrophic Risk Insurance Facility to deal with the uncertainty of the impacts of a tropical event.
The rhetoric that the Government of Belize should prove aid to the farmers whose crops failed, due to climate uncertainty should be discontinued. Climate uncertainty is a reality and the risks should be an integral component of the investment plan. Considering the climate uncertainty, it is past time that the agriculturalists, insurance companies, banke rs, and Government of Belize conjointly explore the provision of affordable crop insurance for drought episodes, flood events, pests, viruses, etc. The impact of extreme climate events can be mitigated if we plan appropriately. Crop insurance is a resilience to climate change adaptation measure.
When climate conditions are ideal, and there is a bumper crop farmers should adjust prices to recover their investment and earn a reasonable, not exorbitant, return on their investment. This is when consumers should benefit. When there is a bumper crop, there is no sharing of the excess earnings with the government. The government and the general population are also victims of the drought episodes. Any farm aid provided comes directly from the taxes Belizeans pay into the consolidated fund.
Agriculture is Not a Way of Life, apply the appropriate business principles.