PHAMA Project target market access and high-value primary commodities A
griculture in the Pacific remains a significant contributor to rural employment, food security, and foreign exchange earner. In some Pacific states up to 30% of national GDP is attributed to the agricultural sector, Solomon Islands in 2006 pegged agriculture at over 50 percent of GDP. Most Pacific islands have large rural populations. Agriculture’s contribution to the economy of Pacific islands goes far beyond simply the production of crops and livestock. The multiplier effects of agriculture on the rest
of the economy can be many times more than that shown on quantities of primary production alone. However, exports of noncommodity primary products and in particular high-value products have been poor (commodity products include coffee, cocoa, oil palm, and copra). In contrast, developing countries have benefited from the trade in high-value agricultural and horticultural products over the past 20-30 years. Exports of high-value primary products have become an important means of increasing economic growth, incomes, and employment; and reducing poverty. Exports of generally higher-value noncommodity agricultural and horticultural products account for just 2% of exports (or 32% of total agricultural exports). The trade in high value agricultural and horticultural export industries is heavily concentrated on relatively few products, including noni juice, spices (especially vanilla), root crops (especially taro), squash and copra meal. These products account for 89% of all agricultural exports (by value). Agricultural exports however on average account for only 6.3% of total exports to major
Vanilla plants in Tonga....trade in high-value primary products is important to increasing economic growth, incomes, and reducing poverty. volume 7 number 1 - April 2011
Pacific overseas markets including the US, Japan, Australia and New Zealand. PICTs are primarily agricultural economies; however export performance in primary products and high-value products in particular is poor. This is despite the Pacific region having the comparative advantage often identified in the production and export of a wide range of agricultural and horticultural products, as well as close proximity of the region to some affluent markets. A major reason behind this poor performance is the difficulty faced by PICTs in managing the regulatory processes associated with accessing key markets. The imposition of stringent market access protocols for products that were historically traded with much ease has created anxiety and frustration within industry as well as wasted export opportunities. Conversely, developing countries have taken advantage of this revolution in the trade in high-value primary products (including horticulture, livestock, fish, cut flowers, and organic products) over the past 20—30 years. Exports of this nature now make up 66% of all developing country agricultural exports, or twice that for PICTS. The Pacific Horticultural and Agricultural Market Access (PHAMA) Program will benefit PICTS through a targeted approach aimed at identifying and working with highest priority products and market access issues. The key objective of the program is for PICT governments and industry organisations to work collaboratively to gain, maintain, and improve access into key markets for selected high-value primary products (fresh and processed), particularly agricultural and horticultural but also fish and forestry products where warranted. ....cont’d on pg 2
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