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Grenada: Farm Industry Pins Hopes on Nutmeg
The Wall Street Journal / December 4, 1997

By Larry Luxner

ST. GEORGE'S, Grenada -- Until recently, the Caribbean's self-proclaimed "Isle of Spice" could have also been called a banana republic, and the description would have fit well.

Not anymore. The banana industry in Grenada -- which traditionally exported tons of the yellow fruit to Great Britain -- has collapsed due to poor quality, disease and the end of European Union trade preferences, and agriculture officials are hoping other sectors will compensate for the sudden drop in banana export revenue.

Justin Francis, chairman of the Grenada Banana Cooperative Society, says the WTO's recent rejection of preferential EU quotas for banana-producing former colonies as a violation of free trade will hurt Grenada severely.

"We cannot truly be competitive with Latin America by virtue of our small scale," says Francis, explaining that Grenadian banana production peaked in 1968 at 26,000 metric tons and has been sliding ever since.

"When our local banana industry collapsed, young people started to gravitate into town, because there was nothing to do. They're becoming a nuisance."

The problem isn't only one of quotas. Last year, the Windward Islands Banana Development and Exporting Co. (Wibdeco) suspended Grenadian banana exports because of poor-quality fruits and moko disease. As a result, Grenada is importing half a million tissue-cultured banana plants from South Africa through the Caribbean Research and Development Institute; the plan is to resume exports on a limited basis by mid-1998.

Things are looking brighter for nutmegs, which were introduced to Grenada in 1843 from the East Indies and have thrived ever since in the tropical climate. Today, Grenada accounts for one-third of world nutmeg production; the other two-thirds are supplied by Indonesia.

In the first half of 1997, Grenada exported 2.19 million pounds of nutmegs and 159,818 pounds of mace, together worth about US$2.5 million. Its biggest customers for nutmegs -- currently selling for $2,800 to $3,000 per metric ton -- are Holland (37.3%); Germany (19.7%); the United States (14.2%), Canada (5.7%) and Brazil (4.8%). More than half of Grenada's mace -- which sells for $15,000 a ton -- goes to Germany, with the remainder shipped to Holland and Canada.

"Prices have been better," says Pilton Campbell, field officer for the Grenada Cooperative Nutmeg Association (GCNA). "There was a time when Grenada enjoyed a cartel with Indonesia, but that agreement collapsed in 1990. During that period, prices rose to $10,000 a ton. Regardless of market conditions, the farmer gets paid for his nutmeg."

The GCNA, which has 7,000 affiliated farmers, celebrates its 50th anniversary this year. "With the demise of the banana industry, nutmeg is now seen as the savior of the market," says Campbell. "Until we start exporting bananas again, nutmeg is the only hope." Meanwhile, he adds, world nutmeg prices haven't risen high enough for farmers to be able to hire the workers they need.

In addition to nutmeg, Grenada exports clove, cinnamon, ginger and half a dozen other spices, but until recently, few attempts were made to process these spices into processed foods. That changed in 1970, when De La Grenade Industries -- using a secret family recipe -- began exporting Morne Delice Nutmeg Syrup to Trinidad and Barbados.

The company now produces La Grenade liqueur, guava jams and jellies, nutmeg jams and jellies, and rum punch.

Managing director Cecile La Grenade, who studied food technology at the University of Maryland in College Park, says her 17 employees export the company's products to the United States, Canada and Western Europe. This year, sales came to US$700,000; next year, she's aiming for $1 million.

"Manufacturing could get into niche markets with the types of fruit we have here," she says, "but it'll take some creative thinking."

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