Crop Over earnings uncertain
Friday June 10 2011 | 07:03 AM

Barbados is on course to reap at least $80 million from Crop-Over 2011, scheduled to officially start next month.

But the economic recession, and a range of related factors, including reduced tourist spending and increased Value Added Tax, seem destined to reduce the sweets the island will gain from the national event this year.

That's the assessment of Research Fellow with the Sir Arthur Lewis Institute of Social and Economic Studies, Dr. Jonathan Lashley, one of the key people behind an Economic Impact Assessment of Crop 2005-2007 study, sponsored by the National Cultural Foundation and released in 2008.

Barbados TODAY understands a number of agencies, including the Shridath Ramphall Centre at the University of the West Indies Cave Hill are keen to carry out further research on the subject, but "funding is the challenge".

Lashley, however, suggested the overall economic impact of the annual festival was unlikely to have galloped from 2007's $78 million past $100 million in light of the protracted economic downturn.

While noting it was "difficult to say what the current contribution is without doing the fieldwork", the economist said expenditure levels in the various revenue earning sectors related to Crop-Over were unlikely to have changed significantly over the last four years.

"There are many issues to consider, including the current financial downturn, reductions in tourism, inflation, new rate of VAT, etcetera," he noted.

"These will all have implications for the number of events planned, number of persons employed, contributions by sponsors, attendance at events and profit margins experienced. Given these issues it is impossible to estimate the contribution without having an idea of what is occurring on the ground.

"If you look at the calculations, the total impact was calculated as $79 million in 2005, up to $82.5 million in 2006 and down to below 2005 levels in 2007 to $78 million," Lashley added.

The research asserted that given this variation in the pre-crisis period he "would find it highly unlikely that in four years it would exceed $100 million in the middle of a crisis, even with inflation".

"If you look at the components of the calculations, you would need to establish expenditure by locals, visitors, artistes, vendors, security companies, hire companies and hospitality, as well as event organisers," 2011-06-10he told Barbados TODAY.

"Even accommodating for inflationary increases, I would not think these expenditure levels would have increased dramatically."

SALISES 2008 study was the first substantial piece of empirical evidence showing the significant contribution of Crop-Over to Barbados economy.

That research concluded a number of things, including that the event was "worth nearly $240 million to the Barbadian economy over the period 2005 to 2007", and that it generated 2,930 jobs directly, 1,465 full-time, the equivalent of one per cent of the island's overall labour force.

It was pointed out, though, that all of the estimates, including economic impact, were "conservative".

Speaking at a Crop-Over sponsor's breakfast in March, Prime Minister Freundel Stuart referred to the SALISES study as he spoke about the major contribution the festival made to the economy.

He said since being re-introduced in 1973 it had not only stimulated the local economy during the summer months, but replaced "the seasonal slump in the tourist market with vibrant economic activity".

"Crop-Over, more than any the national event, has demonstrated that there are employment opportunities outside of what traditionally have been regarded as 'real' jobs," the Prime Minister said.