AGRICULTURAL TRADING TRUST
AGRICULTURAL TRADING TRUST – BASIL SPRINGER COLUMN APPEARED IN THE BARBADOS ADVOCATE’S BUSINESS MONDAY ON APRIL 05, 2010
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“Then said Jesus unto his disciples, If any man will come after me, let him deny himself, and take up his cross, and follow me. For whosoever will save his life shall lose it: and whosoever will lose his life for my sake shall find it.”- Matthew 16:24 -25
Sir Courtney Blackman recently wrote an article which was published in www.businessbarbados.com and entitled “The Barbados Economy at the Cross Roads – An Alternative Perspective”. In prescribing for the “short run” he says “the obvious strategy must therefore be to minimise expenditure on projects that require the use of foreign inputs. Corporations and households should also be encouraged to substitute local products for foreign imports wherever feasible”.
He made reference to one of my recent columns where I said that agriculture was a sector where the prospects of import substitution were most promising, which is reminiscent of the extent to which Barbadians fed themselves during world War II. Sir Courtney also commended the Thompson Administration for its financial support of a Venture Capital corporation under the aegis of the Caribbean Business Enterprise Trust (Barbados) for breeding a new generation of business entrepreneurs.
As I keep on saying, “What I really don’t understand is why the agricultural sector (often deemed to be partly an art and partly a science), which is certainly basic to our survival, is traditionally treated with such scant respect”. We pay lip service to its importance to produce food, one of our basic needs, and merely flirt with the prospects for agricultural exports and import substitution, as contributors to net foreign exchange gains, from time to time.
What is needed is the political will to establish a public/private Barbados Agricultural Trading Trust (BATT) which would master mind the effective and efficient movement of agricultural products from supplier to consumer. BATT should be established as a co-ordinating entity which is private sector led by private sector trustees with public and private sector support. This is in keeping with the well established corporate governance philosophy where the role of the private sector is to lead and the role of government is to determine policy and create a user friendly enabling environment through regulatory and service functions.
BATT’s purpose would be to efficiently co-ordinate the flow of agricultural produce from the supply sources which may be large farmers, small farmers, householders, the Barbados Agricultural Society or indeed brokers to the market. At a recent venture capital fund board meeting, the board expressed surprise that, although there was an abundance of submissions from the creative industries sector, no agricultural projects had been submitted for consideration. A few days after, as if by divine intervention, a farming couple called me out of the blue to introduce me to a wonderful project which has been existing for five years, with high levels of efficiency, and is now poised for exponential growth on the export market.
The markets available to the growers to drive agricultural growth include hotels, restaurants, institutions (e.g. hospital, school meals service, prison), supermarkets, hucksters, farmers’ markets, exotic exports, home-porting and other cruise ships, agro-processing and import substitution. Even with this simple description one can see that it is not a trivial exercise to move perishable produce efficiently through the cool chain from supply sources to the markets. A major co-ordination thrust is required.
There are many central and other support services that will be required: (1) An information system is required so that production information for marketing intelligence and marketing information for production intelligence is readily available to facilitate the decision making process; (2) Timely access to appropriate finance is mandatory and indeed the recently established venture capital fund is ideal for this type of initiative; (3) Incentives – there are already many on the statute books, but for one reason or another, access is sometimes difficult; (4) Land availability – I really don’t see what the problem is here except perhaps the cost of land; (5) Training – there are many training institutions and resources available but they are not properly co-ordinated; (6) Praedial larceny mitigation – Less effort should be spent talking about strengthening legislation, especially if it is not going to be efficiently policed. More action should be taken addressing the general principle that if it is no longer profitable for the larcenists to practise their “enterprise” then they would “go out of business”. There are many ways of doing this; (7) Appropriate agricultural inputs must be made readily available through removal of bureaucratic constraints; (8) Shepherding is mandatory for optimal application of resources; and (9) research and extension are essential to successfully grow and sustain an agricultural economy.
There are more than 20 public and private organsiations that provide services to the agricultural sector. But alas, these resources are not fully cost-effective because of duplication and lack of co-ordination. If these services were rationalized within the framework of a co-ordinating entity such as BATT, then we would be well on the way to success.
The major activities of BATT would be to match producers to selected markets, co-ordinate the product growth, identify problems that impede the path to progress, develop solutions to these problems through the service organisations and ensure that there is timely access to venture capital funds to drive the commodity supply and other activities. BATT would also have access to the Ministry of Agriculture to address policy matters.
What kind of deal is it to get everything you want but lose yourself? What could you ever trade your soul for?
(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET – Columns are archived at www.cbetmodel.org)