Economics I.

TABLE OF CONTENTS
TITLE.............................................................................................
AIMS & OBJECTIVES......................................................................
GENERAL OBJECTIVE..................................................................
SPECIFIC OBJECTIVES.................................................................
METHODOLOGY EMPLOYED...........................................................
PRIMARY.....................................................................................
SECONDARY...............................................................................
REPORT.........................................................................................
DESCRIPTION..............................................................................
ANALYSIS....................................................................................
EVALUATION.............................................................................
RECOMMENDATIONS...................................................................
CONCLUSION..............................................................................
APPENDICIES...............................................................................
Questionnaire...........................................................................
REFERENCES...............................................................................

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Economics I.A

ACKNOWLEDGEMENTS
This study would not have been successfully completed
without the help and support of a number of persons.
Firstly, I would like to thank God. I would also like to
thank my teacher Mr. Blake for helping me every step
of the way. Final thanks go to my family and teachers
for their support and encouragement. I would also like
to thank the farmers of Santa Cruz who filled out the
questionnaires and made the information possible for
the success of this study.

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Economics I.A

TITLE
There are many challenges for small farmers of Santa
Cruz, Trinidad & Tobago. A report concluded from an
investigation into the problems faced by small farmers
of Santa Cruz, Trinidad & Tobago stating the top five
problems.

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Economics I.A

AIMS & OBJECTIVES

GENERAL OBJECTIVE
To

appreciate and learn about the nature of farming

and agriculture

SPECIFIC OBJECTIVES
To evaluate the top five challenges faced by the
farmers of Santa Cruz, Trinidad and Tobago.
To explain the nature of farming and agriculture:
Definition of farming
Types of farmers
To give recommendations as to how the farming and
agriculture industry can be improved.

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Economics I.A

METHODOLOGY EMPLOYED
PRIMARY
For my primary research, questionnaires were given to
small farmers of Santa Cruz , Trinidad and Tobago to be
completed. These farmers cater to persons in the
district of San Juan and environs via the San Juan
market. This method was used because it is quick,
easy, inexpensive and at the convenience of the
farmers. A total of 30 questionnaires were distributed
and returned.

SECONDARY
For my secondary research I gathered information with
the use of books, magazines and websites .For example
I

used

the

Oxford

Dictionary,

Comprehensive

Economics for Caribbean students, The Ministry of Food

Preparation, and Land & Marine resources website and
newspaper clippings. These were used to obtain some
relevant information including theories, diagrams and
definitions.

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Economics I.A

REPORT
Description
BRIEF HISTORY ON THE AGRICULTURE
INDUSTRY IN T&T
Agriculture has to deal with the cultivation of land
and rearing of animals (Smith, 1924) and farming is the
usage of land, growing of crops and raising of animals
(Delatunty, 2002). Agricultural farmers deal with plants
& growing crops.

Poultry deals with the rearing of

animals. Husbandry farmers deal with both crops and

animals.
Trinidad & Tobago has a history of agricultural
activities

because,

like

other

territories

in

the

Caribbean, Trinidad and Tobago developed firstly as a

plantation-dominated economy geared towards the
almost exclusive cultivation of tropical crops (cocoa,
sugar, coffee, banana, citrus) for metropolitan markets
in the U.K which neglected domestic food production.
The social organization of agricultural production was
centered in the activities of the plantation.
In the early 20th century, expansion in the
petroleum sector resulted in a gradual decline in the
export of agricultural products, particularly sugar, as
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Economics I.A
the major contribution to gross domestic product
(GDP). By the mid- 1960s, the relative decline in
agriculture was evident in both domestic production
and export, manifesting serious neglect and stagnation.
The tendency continued and was accelerated by
relative decline OPEC price increases of 1973/74. From
a contribution of 6.3% to GDP in 1966, the agriculture
sector declined to 3.6% by 1976.
Trinidads agriculture, from its earliest years has
acquired a dualistic character with the well endowed
export sector and an ill-equipped, poorly serviced
domestic small farm sub-sector on the other as a result
of the neglect the farming industry has faced. In the
latter, food production for local markets and domestic
use were a principal activity of the small farm
household. Despite inadequate institutional support,
investment, fiscal incentives and access to appropriate
improve technologies; the activities of food producers
were relatively efficient and consistent. As a result of
the expansion of the petroleum sector, small farmers
today face many challenges. Research was conducted
to assert these challenges but focuses mainly on the
top five. A group of small farmers within the Santa Cruz
district was chosen to gain the relevant information for
this study. There will be some asymmetric information
because

it

would

have

been

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difficult

to

obtain

Economics I.A
information from the entire population in Santa Cruz
and it would have also distorted the information
gathered that has to be used decision making process
that

would

be

used

to

make

recommendations

afterwards.
Firstly, the market structure, which is the type of
competition that exists among firms in a particular
industry (Bahaw, 2007)will be identified for small
farmers. The market structure these small farmers
operate

under

is

closest

to

that

of

Perfect

Competition. In reality perfect competition is a

hypothetical situation because no market can fulfill
these conditions (Bahaw, 2007).
This is said to be so because these conditions are
fulfilled:
Product is identical/homogeneous from each supplier No
barriers to enter & exit the market
Large numbers of buyers & sellers
No barriers to enter & exit the market
Buyers & sellers have perfect knowledge of the market
variables & are able to make informed decisions & take
full advantage of all opportunities
Suppliers are price takers
Farmers also have a comparatively small percent of
the market price. They have poor bargaining power,
that is, their inability to influence the market
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Economics I.A
conditions in their favor, both in the purchase of their
inputs and the sale of their products.

Demand

Price

Supply

$10

Quantity

Diagram showing a perfectly competitive market where

the farmers and agriculture industry is closest to in T&T.

Price

$10

AR=MR
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Economics I.A

Quantity
Diagram showing farmers under perfect competition,
where they do not set the price but they simply adopt
the price which prevails in the market where here it is
$10.

ANALYSIS
In Santa Cruz, there are more East Indian farmers than
African farmers. This is so because, since under colonial
rule when indentureship took place, the Africans
rebelled while the East Indians were brought in to do
the job.
The majority (80%) of the farmers are of age 35 years.
The remaining (20%) are farmers 35 years & under. The
following pie chart will show the information in diagram
form:

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Economics I.A

Ages of farmers
3% 10%
7%

18-24yrs
25-29yrs
31-35yrs
35+yrs

80%

From the 30 farmers, 29(97%) were males leaving

1(3%) to be a female. The information is shown in the
following table:
GENDER

NUMBER OF RESPONDENTS

MALE

29(97%)

FEMALE

1(3%)

In Santa Cruz, many of the farmers 24(80%) do

agricultural farming while 3(10%) do poultry farming
and 3(10%) do husbandry. Many of these farmers (40%)
have been farming for 20 years and over, some (23%)
16-20 years,(20%) 11-15 years, (13%) 6-10 years and
(3%) 1-5 years. The following column chart and line
graph will show this information in diagram form:

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Economics I.A

TYPE OF FARMING
30
25

Poulty

20

Agricultural

15

Husbandry

10
5
0

Poulty

Agricultural

Husbandry

NUMBER OF YEARS FARMING

12

3
1
1-5 yrs

6-10 yrs

11-15 yrs

16-20 yrs

All of the farmers in the Santa Cruz district are said to

be experiencing problems on a regular basis. These
problems are:

Capital
Theft/ Praedial Larceny
Transportation
Pest & Diseases
No compensation/ Poorly compensated
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Economics I.A

Storage facilities
Flooding
Cost of fertilizers/Chemicals
Incentive by government
All of the above

The diagram shows the responses to these problems in

relation to amount.

PROBLEMS FACED
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Incentive by government

Cost of
fertilizers/Chemicals

Capital

Storage facilities

Pest & Diseases

Theft/Praedial Larcency

Transportation

No compensation/Poorly
compensated

Flooding

These farmers are affected by these problems listed

above very often on a yearly basis but mostly in the
rainy season.
A total of 83% of the farmers state that banks & lending
agencies, such as The Agricultural Development Bank
(ADB) which provides the major source of funding for
the agricultural and agro-industrial sectors in Trinidad

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Economics I.A
and Tobago, are not willing to help assist them with
loans, leaving 17% stating yes, they do help.
All of the farmers state that there is enough land for
farming because the government is sourcing land for
the farmers of the community.
The agricultural force in the district of Santa Cruz
stated, 68%, as an un-competitive force and the
remaining 32% stated that the force is a competitive
force. Many of the farmers stated that in order to
improve the competitiveness of farmers, more persons
should be educated about the industry and attracted to
it

by

having

different

competitions

within

the

community.
All of the farmers stated that the government is not
doing enough to encourage persons to get involved in
agriculture/farming and that the government should
start in schools where children are educated and
allowed to get involved because they are the leaders of
tomorrow.
The farmers stated that when faced with problems they
go to the Agriculture Minister and if nothing is done
they take it into there own hands, praying to God for
help. Also as a result of the challenges faced, they
stated that sometimes they feel to stop farming but
they keep going. The government & other agencies are
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Economics I.A
sometimes involved when these farmers are faced with
problems.

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Economics I.A

EVALUATION
From the information revealed above we can clearly see that
the top five problems for small farmers in Aranguez are:

Flooding
Incentive by government
No compensation/Poorly compensated
Capital
Pest & diseases

Flooding which is a overflowing/influx of water especially

over land (Smith, 1924) has great impact on the agriculture
industry. In Trinidad and Tobago this occurs mostly because
of heavy rainfall or poor drainage. As a result, crops are
covered with water or sometimes washed away.
Incentives

by

government

are

measures

taken

by

government to attract the development of an industry in

specified areas. These include grants for building, plant and
machinery, work, assistance in encouraging sound industrial
projects, loans, removal grants to new locations, taxation
allowances against investments, and contract preference
schemes. (Answers.com, 2004)
Compensation is something, such as money, given or
received as payment or reparation, for a service or loss.
No compensation/poorly compensated is when these

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Economics I.A
farmers do not receive any of this stated above.
(Answers.com, 2004)
In economics, capital is a factor of production, whilst to
the business man it is funds invested in the business
either by sole traders, shareholders or leaders. It is
stored up wealth used as investment for business.
(Council, 2005) Here there are no funds to either start
or keep the business running.
Pest & Diseases has to deal with the destructive
animals (bugs or insects) that attack food sources and
the unhealthy conditions of plants as it is here. (Smith,
1924)
As a result of these problems the industry will have
much to deal with:
As a result of scarcity (the imbalance between limited
resources and unlimited human wants), individuals
would have to forgo a good/service for another which is
also known as an opportunity cost. This here can be
shown by individuals not purchasing tomatoes to make
the sauce but ketchup in the supermarkets instead.
Producers would also have to use other means of
producing the desired good (chemicals may have to
change).

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Economics I.A
The opportunity cost also changes the slope of the
production possibility curve which demonstrates an
economys

production

capacity

from

its

given

resources. The curve is typically concave to the origin

but because of these problems it will increase where
more resources will be allocated towards the production
of another good. An example of this is the decline in
lettuce production would cause an increase in water
cress but in a negative way for lettuce.
Y

A
B

E
0
X

The Production possibility curve with points A, B, C, D,

E showing where resources are fully utilized/employed.
Point

is

where

utilized/employed

and

resources
G

is

unattainable.

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where

are

not

resources

fully
are

Economics I.A

G
C

E
0
X

Diagram showing an increase in the production of the

other good/service that has cause a rightward shift of
the frontier.

To employ factors of production, some form of payment

or compensation must be made to the factor owners
termed factor rewards or factor returns. With no
compensation/poorly compensated farmers are unable
to produce at amounts that are necessary which also
means that supply, which is the total quantity of a
good/service that suppliers wish to produce and offer
for sale at a particular price would decrease. Here the
supply curve would make a leftward shift to indicate the
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Economics I.A
decrease and this is brought about by a factor other
than price of the good/service.

Things other than price that will cause the supply

curve to shift:

Technology
Price of other goods/services
Price of factor of production
Exogenous factors ( weather conditions)

The supply curve is:

Slope downwards from right to left
Slope upwards from left to right
Positively slope
PRICE
SUPPLY
P2

P1

100

220

QUANTITY

This is a diagram that shows suppliers are willing to

supply a large quantity when the price of the good
increases.

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Economics I.A

PRICE
S2

S1

QUANTITY

This is a diagram showing a leftward shift in the supply

curve because of a decrease and is brought about by a
factor other than a change in price of the good/ service.

As a result of technological progress, the supply of

agricultural products has increased rapidly. This
progress has many roots, such as, the electrification &
mechanization of farms; improved techniques of land

management and soil conservation; irrigation;

development of hybrid crops; availability of
improved fertilizers and insecticides; and
improvements in breeding and care of livestock.
The advances are very significant & as a result
productivity has risen.
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Economics I.A

As a result of decreased supply, the market would not

be in equilibrium, which is when both consumers and
producers coincide; the quantity which consumers wish
to purchase is equal to the quantity producers are
willing to offer for sale. Rather the market would be in
disequilibrium
quantity

where

demanded

there
by

is

inequality

consumers

and

between
quantity

supplied by producers.
There are two main types of market disequilibrium:
Surpluses or excess supply, which occurs when
the price in the market is such that, quantity
supplied by producers exceeds quantity demanded
by consumers.
Shortages or excess demand, which occurs when
price

in

the

market

is

such

that

quantity

demanded by consumers is greater than quantity

supplied by producers.
In this case the market will be at disequilibrium because
of a shortage/ excess demand.
PRICE

PE

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Economics I.A
0

QE

QUANTITY

Diagram showing equilibrium within a market where

consumers (demand line) and producers (supply line)
coincide.

PRICE

PE

QS

PL
0

QS

QD

QUANTITY

SHORTAGE
Diagram showing where there is disequilibrium in a
market where consumers demand exceeds producers
supply.

Prices will increase, not only because farmers may want

to cover their cost for their lost crops and make a profit
but also because the crops that consumers may
demand will be scarce. An increase in price will lead to
a decreased quantity demanded which is termed a
contraction in demand. (Bahaw, 2007)
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Economics I.A
PRICE

Demand

P2

P1
QUANTITY
Q2

Q1

Diagram shows that as price is increased P1 to P2

quantity demanded decreases from Q1 to Q2 leading to a
contraction in demand.

Demand is the quantity of a good/service which a

person is prepared to purchase at a price at a particular
point in time & it is a want backed by money. (Bahaw,
2007)
Things other than price that will cause the demand
curve to shift:

Level of income
Credit facilities
Rates and interest
Size & structure of population
Government policies (taxes & subsidies)
Taste, fashion, styles
Advertisements
Change in price of related goods (substitutes,
complementary goods)

The demand curve is:

Upward sloping from right to left
Downward sloping from left to right
Inversely related to price
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Economics I.A

The combination of large increases in supply and small

increases in demand has also made agriculture a
declining

industry.

Technological

advances

have

increased supply greatly but because of highly inelastic

demand for agricultural products, this has increased
demand slightly. This is demonstrated in the diagram
below:
Price

S1

S2

P1
P2

D1

Q1

D2

Q2

Quantity

By the use of the total revenue and total cost

approach , small farmers in a perfectly competitive
market maximizes profits or minimizes its losses in the
short run by producing at the point where total revenue
is more than total cost (TR>TC). Since these farmers
cannot set price, they can maximize profits only by
selecting the level of output to produce.
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Economics I.A
TC

TR

R
A

Q
Maximum output and profit is shown by the point at Q &
R.

Normal profits are obtained by the two points A and

B.

Using

the

Marginal

cost-

Marginal

Revenue

Approach, small farmers maximizes profits by

producing at the output at which marginal revenue
equals marginal cost (MR=MC).
Price

ECONO
MIC
PROFIT

MC

ATC

P=AR=MR

Output
Q
The economic profit is shown by the region
PLKR, where total revenue is more than total
cost (TR>TC). This will encourage new farmers to
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Economics I.A
enter the market eventually causing economic
losses, where total cost is more than total revenue
(TC>TR).
Price
ATC

MC

ECONO
MIC
LOSS

o
This loss will cause an exit of farmers in the market
until normal profits is restored.

Price Ceiling (maximum prices) and Price Floor (minimum

prices) are also known as price supports which is a form
of government intervention. A price ceiling will only
affect the market if the maximum price is set below
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Economics I.A
the equilibrium price and this promotes equity and
enable

poorer

members

of

the

community

to

purchase basic necessities while a price floor will only

affect a market if it is set above the equilibrium price
and this protects the small farmers income.
Introducing a minimum price has a negative effect which is
a product surplus where consumers are willing to purchase
only a certain amount at the supported price while farmers
supply over the amount consumers want, which is an overallocation of resources to agriculture. The point at which
farmers supply and consumers wants intersect reflect
efficient allocation of resources.

Under production which is when goods are under

produced can also occur. This exists if output of a
good is kept below the socially optimal level. If
farmers under produce goods, this can lead to market
failure which is when the market output occurs at
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Economics I.A
a level which does not coincide with welfare loss
which results when net benefits from economic
activity are not maximized.
PRICE

D=SMB

Welfare Loss
S=SMC
Triangle from
nonSMB=SMC
attainment
of net

Q2

QA

QUANTITY
Diagram of Welfare Loss from Under Production.

Because of farming activities there can be said to have

positive & negative externalities. Externalities exist
when the action of producers or consumers affect
not

only

themselves

but

also

third

parties

(persons who are not directly involved in the

production & consumption of the good/service),
other than through the price mechanism.
A positive externality which is the benefit to
third parties which farmers can cause is a beautiful
sight of their land with the different crops.

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Economics I.A

A negative externality which is the cost imposed

on third parties farmers can cause is the use of
dangerous chemicals which help plants but affect
individuals in the district negatively.
A lot of negative externalities can cause market
failure.

RECOMMENDATIONS
Many things can be done to avoid/stop these different
problems that are faced by farmers:

Agriculture should be made a compulsory subject in

the school, starting from primary level having many
different competitions. There should be agricultural
training programs to develop more youth involvement.
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Economics I.A
This would encourage person to see that it is very
important. Also many will be devoted to it and it will
become a very competitive economic sector.

Educate person on the importance of agriculture to the

country and how it helps tremendously with the
development.

Government agencies should respond to the problems

of these farmers more rapidly and efficiently.

The drainage within the country should be dealt with so

as to reduce flooding taking place on a yearly basis.

The level of competition from international sources via

the use of protection schemes which consist of price
controls and budgetary subsidies.

The

government

should

carry

out

policy

of

protectionism, to restrict trade, example: Tariff-based

System. A tariff is a tax on imports. It pushes up the
price of imports and makes home produced goods look
more attractive (affordable) by comparison.

Government should provide subsidies to our farmers to

help them keep their prices down and make the
imports seem less attractive (more expensive).

Processing

should

take

place

as

it

makes

the

agricultural products less bulky, more suitable for

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Economics I.A
storage and transport, and presents production in a
form that is more desirable to consumers.

It should have an improvement in the level of research

and the collection, analysis, storage between research
and extension services should strengthened.

Effective economic analysis of the agricultural sector

should be carried out to ensure productivity, improved
infrastructure and investment as this would promote
adequate

means

of

communication

between

consumers and producers.

CONCLUSION
There are many challenges faced by Aranguez farmers today
and the agriculture industry on the whole within Trinidad &
Tobago. It is not easy for farmers to face these problems but
the Aranguez farmers are being successful in doing so. They
and many farmers keep the agriculture industry alive in T&T
despite the energy sector is now the main part of the
economys development process.

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APPENDICIES
QUESTIONNAIRE
TOPIC: AN INVESTIGATION INTO THE PROBLEMS
FACED BY SMALL FARMERS IN ARANGUEZ
TRINIDAD
Please place a tick in box (es) where necessary and answers in
the spaces available. Thank you for your cooperation
Age: 18-24
25-29
31-35
35+
Sex: Male
Female
1.

What kind of farmer are you?

Poultry
Agricultural
Husbandry

2.

How long have you been farming?

1-5 yrs

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Economics I.A
6-10 yrs
11-15 yrs
16-20 yrs
20+

3.

Do you regularly experience problems?

Yes
No

4.
If you do experience problems, what are they?
Flooding
No Compensation/Poorly Compensated
Transportation
Theft/Praedial Larceny
Pest and Diseases
Storage Facilities
Capital
Cost of Fertilizers
Incentive by Government
All of the above
5.
How often are you affected by these problems on a yearly
basis?

6.
Are banks and lending agencies willing to help assist
farmers with loans?
Yes
No
7.

Is there enough land for farming?

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Economics I.A
Yes

No

8.
If no to question 7, is government sourcing land for the
farmers of the community
Yes
No
9.
Is the agricultural force in your community a competitive
force?
Yes
No

10. If no to question 9 what do you as a farmer think should

be done to improve the competitiveness of the farmers?

11. Do you think that the government is doing enough to

encourage person to get involved in agriculture/farming?
Yes
No
12. If no to question 11, what do you think can be done to
encourage persons?

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Economics I.A

13. When faced with problems, how do you go about dealing

with it?

14. Are the government and other agencies involved when

faced with problems to help?
Always
Sometimes
Never
15. As a result of the challenges have you ever felt to stop
farming?
Yes
No
Sometimes

REFERENCES

Answers.com.

(2004).

Retrieved

www.Answers.com: http://ww.answers.com

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from

Economics I.A
Bahaw,

E.

(2007).

Comprehensive

Economics

for

Caribbean Students. Caribbean Educational Publishers.

Council, C. E. (2005). Principles of Business Student Self
Study Guide. Commonwealth of Learning.
Delatunty, L. K. (2002). The Junior School Dictionary.
Heinemann & Rigby Ginn.
Smith, F. &. (1924). The Pocket Oxford Dictionary.
Oxford University Press.

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