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Reviving Agriculture

Reviving Agriculture. How to move from planning to action T&T – March 1, 2010. What it really comes down to. Agriculture is a business!. So, who is going to produce all the ‘cheap food’ everyone is talking about?. Me either!!. Not me!!. Setting the global context.

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Reviving Agriculture

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  1. Reviving Agriculture How to move from planning to action T&T – March 1, 2010

  2. What it really comes down to Agriculture is a business! So, who is going to produce all the ‘cheap food’ everyone is talking about? Me either!! Not me!!

  3. Setting the global context

  4. We need to follow the right model of thinking Future Shapers Forecast Model – is dangerous because it perpetuates the traditions of the past Foresight Model – the foresight model, is essential because it identifies the opportunities in future Forecast Model +1-2 yrs Foresight Model +5-10 yrs Today ‘Best Bets’

  5. The global ‘triple whammy’ Food prices Energy costs Resources

  6. 3 big challenges to 2030 1.7 billion more mouths to feed – 50% more food Ratio of arable land / population declines 40-55% 1.8 billion live with absolute water scarcity

  7. Key trends shaping global agriculture Security of supply Technologies Health and wellness Renewable resources More wealthier consumers Land and water constraints Sustainability Increasing population Climate change / Environment

  8. 2010 2015 2020 GM/ non GM bio-entities Multiple trait GM and non GM enhanced bio-entities – genetic markers Bio-pharming – GM animals and plants Agriculture transition roadmap Demand for renewable commodities grows rapidly Major supply constraints lift global prices and drive technology driven alternatives Food as a fuel Food is your medicine Bio-fuels 5 – 10% of market Bio-fuels are now in decline Bio-fuels 1 – 2% of market Food supply / demand concerns Like cheap energy and water, the era of cheap food has now become part of history. The best positioned are ‘winners’ Non-sustainable agriculture Sustainable agriculture Extensive rural agriculture Intensive urban agriculture – feeding cities Limited ‘Factor X’ value adding Extensive ‘Factor X’ value adding

  9. Trends in business – big or unique FUTURE BUSINESS BIG High volume mass production units that deliver on a global scale, have the latest technology and lowest cost. UNIQUE Smart, customised, high value, niche businesses There is no middle ground any more

  10. At one extreme.... .....and the other Global food security trends Switzerland Japan Sweden China Singapore Some Arabian countries Favour high cost home production and subsidies Favour offshore lowest cost options Highest food prices in the world Most highly subsidised farmers Globally competitive food prices No or low subsidies for farmers

  11. What about the Caribbean?

  12. Poor image

  13. Local food is often not ‘cheap’. The cost of much home-grown food in the Caribbean is helping keep people poor!

  14. What’s a mega-farm? The largest dairy farms in NZ now milk 3000+ cows on 1,500+ acres. An average Idaho potato farm is 1,500 acres, grows 500 acres of potatoes a year, and pays US$ 50,000 for labour. China recently paid US$ 10.5 billion to The Philippines and Indonesia to grow food and fuel on 1.3 million+ ha. An average Australian extensive farm is 3,500 hectares (8,750 acres) and half is cropped each year.

  15. “Food security means you need to be able to feed yourself. If it is based upon core competencies then it would mean you would focus on those areas which you are best at. Food security is not just about growing your own food.” What is food security in the Caribbean? “There is a need to define what is meant by ‘national food security’. In my view it is the ability of a nation to feed itself with the least risk – at least in the basic food area. It doesn’t mean we need to grow all our own food. It means we need to set up a structure to minimise risk. In that case it may be better to contract the growing of food to Guyana if they can produce it more competitively.”

  16. Conflicting expectations

  17. ‘Promoters and resistors’ THE PROMOTERS Passionate people breaking with tradition Smart efficient value chains / marketing Cooperation, networking, and synergies Making things happen – being innovative – R&D High value extraction / IP protection SECTOR 2020 AGRICULTURAL SECTOR TODAY Aging players, traditional attitudes Poor inefficient value chains / marketing A lack of trust and the sharing of ideas ‘Waiting for something to happen’- no R&D Low value extraction / lack of IP protection THE RESISTORS

  18. What really drives agriculture?

  19. What I want and what I need What I want is priceless! What I need is the lowest price!

  20. Let’s talk about cocoa ‘First Class’ Unique $ 1500 /kg $ 300 /kg $ 105 /kg +1000% ‘Business Class’ World Class +400% $ 23 /kg $ 12 /kg ‘Economy Class’ Commodity products and services $ 3 /kg

  21. Let’s talk about Sea Island cotton ‘First Class’ Unique $ 400 $ 660 /kg $ 500 +1000% ‘Business Class’ World Class $ 42 +400% ‘Economy Class’ Commodity products and services $ 22 / kg

  22. Customers now drive the value chain R&D / Knowledge / Education / Networks Channels / alliances / key partners Providers Customers State agencies / support services

  23. ‘Tobago Wild’ value chain Advance electronic customs clearance New York restaurant (and customers) Door to door logistics E-commerce interface Aggregator Fisherman

  24. Grenada Choc value chain High-end Retail UK / EU Distributor Online Retail By sea/air High-end Retail USA Distributor Online Retail Local supermarkets

  25. What are Caribbean entrepreneurs doing in agriculture?

  26. What’s happening in the region? Almost without exception Caribbean entrepreneurs in agriculture have gone ‘unique’

  27. Funding & Scaling - up Value chains Branding Marketing Exporting Science & Technology Cooperation Value - add Novel uses Sustainable Entrepreneur success factors

  28. Tropical Farm Produce - Dominica 9 of the 10 success factors Darwin Telemaque TFP Exports to the region/USA Win-win relationhips A networked business

  29. SVG Dasheen Growers Network - SVG Jethro Greene 9 of the 10 success factors Exports to the UK/Europe Win – win alliances 100% increase in value

  30. Baron Foods LtdSt Lucia Grown 1000% in 15 years Exports to Europe, North America and Caribbean countries Also does private labels Ronald Ramjattan 9 of the 10 success factors

  31. Goodfellow Farms The Bahamas ‘Mini-greens’ Appropriate technology Customised services 9 of the 10 success factors Karin & Ian Goodfellow

  32. Nut-Med Grenada USDA Approval International markets Internet marketing Denis Noel 9 of the 10 success factors

  33. The Grenada Chocolate Co. Makes premium organic chocolate Markets only in high end offshore outlets One of the top 4 brands globally Mott Green 9 of the 10 success factors

  34. Montpellier Farms - Antigua Micha Peretz 9 of the 10 success factors Exports to Europe / USA Win-win relationships Appropriate technology

  35. Setting priorities

  36. Agriculture opportunity areas AGRICULTURAL SECTOR FOOD FOR HUMANS & ANIMALS ENVIRONMENTAL & AESTHETIC USES BIOTECHNOLOGY & HI-TECH FARMING PERSONAL HEALTH, WELLNESS, PERFORMANCE INDUSTRIAL RAW MATERIALS BIO-FUELS AND ENERGY SUPPORT SERVICES & INPUTS 36

  37. But not every growth opportunity is appropriate

  38. The ‘Best Bet’ project approach with key players Global Foresight & Global Growth Market Niches Phase 1 Capabilities & Enablers Assessment Phase 2 Best Bet 1 Best Bet 2 Best Bet 3 Best Bet 4 Best Bet 5 Best Bet 6 Phase 3 Business Investment Case Completion – Top 3 Phase 4 Commercialisation Action Plan Phase 5

  39. What’s viable?

  40. Making decisions

  41. Making things happen

  42. H3: Long Term Vision 10 Years H2: Strategic View 3-5 Years Moving towards a common ‘destination’ H1: Operational View 1 Year Alignment of Key Stakeholders OUTCOMES

  43. Taking a systems approach

  44. Providing a framework

  45. The 3 business planning horizons Horizon 3 5 Years + The longer term vision for the business Horizon 2 2-3 years Key strategic goals that need to be realised Horizon 1 1 year Annual business and operational plan implementation

  46. Cocoa sector roadmap Advanced proof of effect clinical trials 2020 Initial proof of effect clinical trials Release health related product range Release first PEA based pleasure products 2016 Develop S&T based rating scale Achieve US$ 30 /kg for Trinitario cocoa Develop win-win alliances with key offshore partners Move to an integrated networked business model 2013 Achieve US$ 20 /kg for Trinitario cocoa Survey biotypes and confirm 4x factor X variations Identify – secure key high value channels 2010 Achieve US$ 10 /kg for Trinitario cocoa

  47. Commercial targets and KPIs

  48. Strategic focuses

  49. Using benchmarks Competitive Un-competitive

  50. The work environment Unfriendly Friendly

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