Plantains and bananas are the principal crops in Puerto Rico, with the 2004 crop valued at US $89.8 million, representing 29 percent of the total annual Gross Agricultural Crops Income (GACI). After many years of being free of black sigatoka, the disease was detected in Puerto Rico in August 2004. The disease, which is caused by the fungus Mycosphaerella fijiensis, affects plantains and bananas and can reduce yields by as much as 90 percent. Government agencies have been funding research and assisting growers with the cost of treating the disease, but budgetary constraints may force the government to substantially scale back on funding these programs. The presence of the disease and the fact that eradication is highly improbable has also raised concerns over whether the current trade policy that restricts, the importation of plantains and bananas is no longer warranted. Consequently, this paper addresses two questions: 1. Should the government continue to subsidize the cost of treating the disease while maintaining strict prohibitions on plantain and banana imports? 2. Should the government remove the prohibitions on plantain and banana imports while still providing assistance to growers to treat the disease? The research utilizes an Equilibrium Displacement Model (EDM) to assess the effects of the proposed policy changes on plantain and banana prices, production, consumption, and revenue and welfare. The results suggest that it make sense for the government to continue to assist growers with treating the disease. The results also suggest that the modest gains to be made from opening of the market to imports of these commodities might not be sufficient to outweigh the potential losses that could arise from inadvertently introducing other invasive pests and diseases such a Moko disease and Papaya Fruit Fly which are sometimes transmitted via banana imports and can cause serious damage to the agriculture and ornamental industries.


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