Agro-parks::the nuts & bolts

Roger Clarke, GUEST COLUMNIST

THE MINISTRY of Agriculture and Fisheries takes note of the editorial in The Gleaner of Friday, May 10, 2013, regarding lack of clarity on agro-parks. The ministry accepts this editorial as an opportunity to provide clarity.

What, then, are agro-parks?

Essentially, an agro-park is an area of intensive agricultural production which seeks to integrate every facet of the agricultural value chain from pre-production activities (irrigation, drainage, road and land-clearing activities) to production, post-harvest handling and marketing. All of these activities will be executed within the framework of a tripartite partnership involving the Government, farmer/investors and marketing entities.

Except for those agro-parks proposed for New Forest/Duff House, Hill Run and Yallahs, where lands are privately owned by existing farmers, the Government, in all the other parks, will make some 3,237 hectares (8,000 acres) of Crown land available to participating farmers/investors on a leasehold basis and at concessionary rates.

The Government will further install such critical infrastructure as irrigation systems, drainage, proper access roads, land clearing in some instances, as well as necessary post-harvest facilities such as packing houses and drying facilities, where warranted.

Participating farmers/investors will be selected on a competitive basis and on predetermined criteria such as strength of business plan, availability or demonstration of access to working capital, a willingness to enter into contractual arrangements with marketers and to grow predetermined crops based on clearly established markets, knowledge and expertise in agriculture.

Participants must subscribe to such shared services as security, dedicated extension services and the use of tractors and other equipment. One critical success factor of the agro-parks is the engagement of best practices in terms of agronomy and animal husbandry. These are crucial, as agro-parks must achieve a higher level of productivity than they obtain conventionally in order to be models to the rest of the sector, while ensuring profitability and sustainability of the venture.

Marketers are the individuals/entities who will purchase the produce from the farmer/investors to be processed and disposed of through exports, or sales on the local market through retail outlets or the hotel industry. In some instances, the marketers will, in fact, be people who are currently importing agricultural produce for local distribution. They will now purchase the same items produced in the agro-park for distribution through their established channels. This is the case, for example, for all the onions that would be grown in the agro-parks.

In other instances, the marketers will be large, established agricultural distribution companies. The Export Division of the Ministry of Agriculture & Fisheries will purchase all the ginger produced in the agro-parks. This entity currently has large markets that it cannot supply at this time.

Exporters will also buy produce from the agro-parks for export. In a few cases, the investor/farmer will also be the marketer. In all instances, however, the production, in terms of the types of crops and the volume of output, will be determined by the availability of clearly established markets. Farmer/investors will produce based on contracts with the marketers. It is also envisioned that the post-harvesting facilities to be established in the agro-parks will be leased to, and managed by, the marketers.

SCALE AND IMPACT

Nine agro-parks will be established in Plantain Garden and Yallahs in St Thomas; Amity Hall and Hill Run in St Catherine; Ebony Park and Spring Plain in Clarendon; New Forest/Duff House in Manchester/St Elizabeth; Meylersfield in Westmoreland; and Ettingdon in Trelawny. It is proposed that more than 5,000 people will benefit directly and indirectly. This will result in foreign-exchange earnings/savings of more than $4 billion when the programme is fully rolled out over the next two years.

The agro-parks will make a significant contribution to the strengthening of the local economy in the areas immediately surrounding the parks, given the strong multiplier effect of these investments.

In addition to the income and earnings to be derived, the agro-park will play a critical role in rural development and rejuvenation. In Plantain Garden, for instance, the agro-park will absorb a number of former banana industry employees and restore economic activity in an area that has been abandoned since the demise of banana in eastern St Thomas in 2008.

The Agro-Invest Corporation (AIC), an agency of the agriculture ministry, will be the principal agency of the Government in this tripartite partnership. All Crown lands involved in this initiative are vested in the Agro-Invest Corporation. This entity, therefore, has the responsibility to select farmers/investors and execute leases with participating farmers/investors. This entity is also responsible for the installation of the infrastructure and facilities that will be provided by Government. They will also hold and execute leases with the marketers in respect of the post-harvesting facilities.

At the level of each agro-park, AIC will also provide park managers and dedicated extension specialists. The Corporation will also coordinate the involvement of other government agencies in providing services to the park. For instance, irrigation facilities, once constructed by the AIC, will be handed over to the National Irrigation Commission for operation. RADA, as the Government's principal extension agency, will also provide technical advisory services where required. The cost of these services, including security, will be recovered by the AIC from participating investor/farmers.

FUNDING

Financing for the infrastructure being provided by the Government will come through the European Union-funded Sugar Transformation Programme and the Inter-American Development Bank-funded Agricultural Competitiveness Programme.

Farmers/investors are required to provide working capital either from their own resources or through loans provided principally by the Development Bank of Jamaica/PC Bank network. In the Plantain Garden River agro-park, farmers will access their working capital from a loan from the St Thomas Co-operative Credit Union. The working capital covers land preparation, all production inputs, on-farm irrigation and equipment/tractor services, and security.

The marketers will also provide their own working capital to purchase the produce from the farmers/investors. Where farmers access loans from financial institutions, a crop lien mechanism is in place for the marketers to deduct and hand over loan payments from the farmers' proceeds of sales.

ACHIEVEMENTS

Three agro-parks are currently in operation.

St Thomas - Plantain Garden River: This park consists of 48 hectares (120 acres), of which 23 hectares (50 acres) are now in production. More than 40 farmers have commenced cultivation of 16 hectares (40 acres) of onion and four hectares (10 acres) of ginger. All land-preparation activities are complete and planting has commenced. The St Thomas Co-operative Credit Union provided the working-capital loan of $40 million. The ministry is currently finalising irrigation and drainage works and will provide access roads.

A current importer of onions has issued contracts to buy all the onions that will be produced, and the Export Division of the Ministry will buy the entire ginger crop. We expect the full roll-out of this park within this financial year.

St Catherine - Amity Hall: This park comprises more than 800 hectares (2,000 acres). The principal activity to be undertaken at Amity Hall is the production of sorghum. To this end, the Government, through the AIC, leased some 330 hectares (818 acres) of land to Caribbean Broilers Ltd, of which some 200 hectares (500 acres) have already been cleared and prepared and on which planting has commenced.

By the end of this year, Caribbean Broilers and another entity should have a total of 600 hectares (1,500 acres) of sorghum in production. The intention is to use sorghum to substitute a portion of imported corn now used for the production of animal feed. Other activities, such as onion, vegetable and hay production, occupy another 112 hectares (240 acres) of land. The Government has already cleared drains and installed the necessary irrigation system, and is currently completing access roads in the development.

Clarendon - Ebony Park: More than 323 hectares (800 acres) of production in Ebony Park will be engaged this year involving onion, pepper, vegetable and tubers. Of this, nearly 80 hectares (200 acres) are already in production. The ministry will undertake the construction of drainage and irrigation facilities to serve the full 323 hectares (800 acres) this year and up to the entire 809 hectares (2,000 acres) of land in Ebony Park next year.

TIMETABLE FOR OTHER AGRO-PARKS

Production activities at the agro-parks in Yallahs and New Forest/Duff House are currently under way, since these areas represent existing farming communities in which the Government has just established two brand new irrigation systems at a cost of nearly $1 billion.

The objective, therefore, is to increase the production and productivity of the existing farmers through the engagement of best practices and to link them to markets. These arrangements between farmers and potential marketers are currently being finalised. It is, therefore, projected that these areas will start producing under our agro-park concept within this year.

In the case of Meylersfield, a lease is being finalised between AIC/SCJ Holdings Limited and a group of farmers for the growing of rice and the rearing of freshwater fish on some 140 hectares (340 acres) of land. Already, land clearing and infrastructure works are being executed and arrangement being finalised for marketing that output.

The Hill Run, Spring Plain and Ettingdon agro-parks are currently being scoped in terms of markets, crop selection, and requisite infrastructure works. These will come on stream next year.

Roger Clarke is the minister of agriculture. Email feedback to columns@gleanerjm.com.