The citrus plant, for example, was never constructed due to lack of funds and the planned-for processing of 85 percent of the crop that could not be consumed fresh, never occurred. The selection of planting materials and livestock was rushed once the diversification plan was approved with the result that the materials was not well suited to the soils and climate, or were of poor quality and were not readily marketable. The coffee varieties selected were of poor quality and that activity failed. The sheep project was designed for superior breeds available from Barbados, but due to time and budget pressures, less desirable local animals were used. Whether the diversification could have been done successfully cannot be know, but other countries had similar disappointing experiences.

The World Bank was involved in a diversification effort in Barbados which was initially successful but eventually failed. The World Bank had a Technical Assistance project with the Ministry of Agriculture in Barbados to support vegetable production and marketing in 1982 and an Industrial Credit Project in 1983 to support agro processing. This led to a substantial increase in vegetable exports. The implementation completion reports were satisfactory (World Bank 1996), but the capacity was lost once the World Bank support ended according to Ministry of Agriculture Officials.

# **The World Sugar Market**

Without the high prices of the preference markets, Caribbean producers would be more directly affected by the developments and trends in the world sugar market which has a long history of policy distortions that affect price levels and price volatility. These distortions have included government guaranteed prices to producers, import tariffs, quantitative import controls, and export subsidies. Most often these policies have been intended to protect producers from lower cost imports. The highest protection has generally occurred in OECD countries such as Japan, the European Union, and the United States. This protection has contributed to slower consumption growth, higher production, the emergence of alternative sweeteners, reduced net imports or increased net exports, and lower world prices. For example, such policies have caused the combined net imports of the European Union, Japan, and the United States to decline from one-half of world sugar imports in the 1970s to about zero in recent years (Mitchell, 2004). This has slowed the growth of world trade and depressed world prices compared to the levels that would have occurred without policy distortions in these countries.

Consumers have often paid for such policies through higher prices. For example, U.S. consumers pay about US$0.22 per pound for raw cane sugar compared with a 2004 average world market prices of about US$0.07 cents per pound. Consumers in the EU pay about triple the world market price and consumers in Japan pay nearly twice those levels. Consumers in the Caribbean pay higher than world market prices because of high duties on imports or government policies which limit imports. In Trinidad & Tobago, for example, sugar prices are government controlled with higher prices for retail sugar sales than for wholesale prices for companies which use sugar in food processing or baking. In Jamaica, consumers pay about triple the current world market price for raw cane sugar because of government import controls and high import duties.

The trend in world sugar prices has been down, after adjusting for inflation, with real sugar prices declining by about half since 1950 (Figure 7). This price decline has 19