PROMOTION AND EXPANSION OF AGROTRADE AMONG EXISTING AND YOUNG ENTREPRENEURS IN THE COMMONWEALTH OF DOMINICA PROJECT PROFILE

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1 PROMOTION AND EXPANSION OF AGROTRADE AMONG EXISTING AND YOUNG ENTREPRENEURS IN THE COMMONWEALTH OF DOMINICA PROJECT PROFILE INCREASING THE USE OF APPROPRIATE GREENHOUSE TECHNOLOGY IN DOMINICA Esther Carbon Consultant for IICA January 2008

2 ACKNOWLEDGEMENTS A great deal of thanks is owed to the individuals who were interviewed and provided feedback on draft document: Mrs. Margaret George (Dominica Greenhouse Farmers Network and Agri Sales and Services), Mr. Francisco Esprit (Non-governmental Organisation Agricultural Diversification Project), Mr. Malcolm Wallace (National Association for Youth in Agriculture), Mr. Kent Coipel (Dominica Bureau of Standards), Ms. Vernelle Joseph (KFC Dominica), Mr. Pierre Astaphan (J. Astaphan and Co. Ltd.), and Staff of 4-D Ag-Centre. 2

3 SECTION I: TECHNICAL PROFILE PROMOTION AND EXPANSION OF AGROTRADE AMONG EXISTING AND YOUNG ENTREPRENEURS IN THE COMMONWEALTH OF DOMINICA CHARACTERISTIC TITLE SUMMARY DESCRIPTION Increasing the use of appropriate greenhouse technology in Dominica. The project will provide funds to establish seven demonstration greenhouses to show potential farmers the technical and business aspects of greenhouse farming. To achieve this objective the project will identify seven farmers, one from each of seven existing agricultural districts, to produce vegetable crops for targeted domestic and export markets. The project will also establish an operating network of producers, domestic suppliers and exporters to share knowledge and information. This will be achieved by working with the National Association for Youth in Agriculture (NAYA) and the Dominica Greenhouse Farmers Network (DGFN). These two organisations will select the seven farmers from their membership and will monitor the implementation and execution of the project. The Inter-American Institute for Cooperation on Agriculture (IICA) will provide funds and technical assistance. BACKGROUND It is expected that project implementation will be complete by the end of 2008 with seven operational demonstration centres. The project expects increased collaboration among producers and buyers and increased private investment in the rural environment through the operating network. Current challenges facing agriculture requires a new vision for the sector one that is able to respond to market demands, technology changes, consumer preferences and the threat of a variable climate. A recent national agrotourism symposium revealed the major constraints facing both industries. Tourism players identified high cost of food both domestic and imports, inconsistency of supply and low quality of fresh food products as some of their constraints. The agricultural sector though, has been plagued by limited access to finance and insufficient market access as well as all the other challenges associated with globalization and slowed economic growth. Very important to both sectors is a formal communication channel to guide their activities, 3

4 environmental conservation and overall cost reduction. IICA Dominica has identified the advantages of greenhouse farming to tackle some of those challenges. Greenhouse production is: Highly productive technology. Controlled production increases the diversity of potential products, improves scheduling, improves quality and reduces cost of production. Protective of the environment. Conserves water and land. This demonstration greenhouse project will show farmers appropriate technology in action and in the long-term help reduce the food import bill, reduce foreign exchange leakages, increase farmer income and spur innovation in both agriculture and tourism sectors. Given that stakeholders are enthusiastic about working together, there is immediate need to build on this impetus by formalizing the relationship between stakeholders and facilitating the operating network between them. RATIONALE There has been a great deal of talk about the potential for tourism locally and in the region for the better part of three decades. Regional governments have channelled funds, planning and policy endeavours to develop tourism and other service sectors while agriculture and the rural sector remains under-funded and under-developed. Tourism has not created robust backward linkages with the local economy and coupled with the global challenges facing small island nations like Dominica our two leading sectors are only marginally successful. Competitive pressures on traditional exports, especially bananas which has been Dominica s main agricultural export for over fifty years, means farmers are facing increased production costs and a decline in real prices. These traditional export systems are highly dependent on imported chemical inputs and in a changing environment, alternatives are needed. By underestimating the importance of food and agri-business in Dominica has led to phenomenal food import bills, high cost of locally produced food, unstructured, disorganized markets. Government of the Commonwealth of Dominica has committed to address problems in agricultural production but immediate 4

5 action is needed to address pressing needs of farmers, hoteliers and exporters. Sustainable agriculture and tourism is the goal. Tourism is an opportunity to transform rural areas and with agriculture being the key component of the base of sustainable tourism these two sectors are poised to save each other. The Caribbean s sun, sea and sand tourism product has reached maturity and is losing its appeal to source markets but IICA recognizes that tourism can continue to be a mainstay of the economy if the product is transformed. A unique product of impeccable standards that takes advantage of the agricultural base of the island, one to include unique fresh foods, farmbased tours, farm-stays, health and wellness based on our plant biodiversity. Opportunities for fresh, appropriate vegetable varieties exist in the domestic, regional (OECS) and cruise markets but these non-traditional crops face different problems; inconsistent production and non-established markets. This project will increase the volume of fresh vegetables produced and facilitate an operating network between producers and buyers. It is hoped that this will spur new agro-industries, expand production into other long-term crops thereby expanding economic activities especially in the rural sector. COMPARATIVE ADVANTAGE Several existing conditions suggest that greenhouse farming is poised to succeed in Dominica. A favourable climate, abundant sunshine, water and mild weather enable us to produce vegetables under relatively simple, protected structures. A large percentage of targeted farmers have had some training in greenhouse technology. Government policies favour an integrated approach to development. Proximity to potential regional and international markets. Labour intensive production will reduce unemployment in the agricultural sector. Greenhouses can withstand natural hazards such as hurricane force winds better than crops produced on open land. Though these comparative advantages exist it is imperative to gain competitive advantage by: Reducing the average age of our farmers by investing in young farmers Training extension staff in greenhouse 5

6 GENERAL OBJECTIVE SPECIFIC OBJECTIVES EXPECTED OUTPUTS OPPORTUNITY/ THREAT ANALYSIS technology Developing alternatives to imported inputs Improving policies for access to finance Establishing post-harvest facilities Establishing a network of sellers and buyers. Increase the consistent supply of high quality greenhouse produced vegetables for the domestic and export markets. 1. Promote the use of appropriate greenhouse technology by establishing seven greenhouse demonstration labs. 2. Facilitate the formation of an operating network between producers and buyers. 3. Develop human capital by training and education programmes aimed at increasing productivity and competitiveness of greenhouse farmers and effectiveness of extension staff. 1. Seven demonstration greenhouses, one in each of seven agricultural districts. 2. Seven district extension officers trained in greenhouse technology. 3. A minimum of 75 vegetable farmers trained in greenhouse technology, management and marketing as they relate to the tourism sector. 4. An effective mechanism for negotiating contracts between producers and buyers. 5. Twenty farmers trained in seedling production and operation. The keys to the success of this project are the commitment of stakeholders and the demand-driven nature which should ensure that the project is sustainable. Opportunities Expansion of product range and business for small producers. Government policy supports greenhouse production of vegetables. Building networks of local collaborators. Enhanced tourism product. Distinctive agro- and other products that identify Dominica as a brand. Cadre of trained, enthusiastic farmers and managers with an understanding of the market. Financing opportunities from donor funds European 6

7 Union for example. The project is in a unique position to meet the needs of an existing market, but while the potential for success exists there are several challenges that may affect sustainability: Threats Farmers may be hesitant to consider new varieties of crops. Payment schedule from hotels delayed by 1-2 months after receiving goods will affect operating capacity of farmers without working capital. Access to credit for expansion and development. Praedial larceny and other security issues. Variable climate increase of natural disasters e.g. hurricanes. Access to skilled and unskilled labour. Quality and varieties of seedlings. Enabling Environment The Dominica Bureau of Standards is able to provide guidelines for safety. A recent national agrotourism strategy will be integrated into national policy and action plans to guide agriculture and tourism linkages. Institutional reform needed A committee of greenhouse farmers, hoteliers, exporters and public service representatives spearheaded by the IICA to coordinate the activities of the public and private sectors. Expertise available The implementing agencies are able to provide skills and expertise in several key areas: - irrigation - experienced farmers - agronomists - exporters - research and development They are able to access experts in: - market grades and standards - packaging and labelling - product development Resources The Government of Dominica and financial services sector need to establish micro-finance schemes specifically for 7

8 agro-trade. This project will provide access to greenhouse technology for young and existing farmers. REQUIREMENTS OF THE PROJECT KEY ELEMENTS OF THE PROJECT ESTIMATED LIFE OF PROJECT IMPLEMENTING AGENCY Operational Capacity Several members of the institutions and organizations involved in the project have years of management experience planning, delegation and communication.. IICA should initiate the formation of a committee of sellers and buyers to discuss specific varieties of crops needed, potential contracts, and forecasts for planting. NAYA and DGFN will identify and take an inventory of the needs of the targeted farmers. 1. Establish an agro-trade committee of sellers and buyers to determine specific needs, requirements and constraints of each sector. 2. Identify and inventory participating farmers. 3. Identify and reproduce or source varieties vegetables required by the market. 4. Prepare and reproduce technical manuals for participating farmers and others. 5. Train participating and other farmers and extension staff in greenhouse technology and management of targeted production for the tourism industry. 6. Establish seven demonstration greenhouses for the production of several crops. These demo-greenhouses will provide technical and operational guidelines, and serve as motivation to non-greenhouse producers. Twelve months IICA will implement the project through the National Association for Youth in Agriculture (NAYA) in collaboration with Dominica Greenhouse Farmers Network (DGFN) and the Caribbean Agricultural Research and Development Institute (CARDI). IICA will provide funds to purchase greenhouses for new and/or existing farmers. NAYA and DGFN will select from its membership farmers to participate in the project. The IICA, DGFN and CARDI will provide technical support and be part of the agro-trade committee. 8

9 GOVERNMENT INSTITUTIONS RISK ANALYSIS Ministry of Agriculture, Dominica Bureau of Standards, Discover and Invest Dominica Authorities have committed to the development of agro-trade. Agricultural production systems must be continuously monitored so that efforts to manage risks can be periodically evaluated or adjusted. Natural hazards, hurricanes, seismic activity, fire etc. may pose serious threat to the project. Building solid structures, with correct directional placement as well as taking appropriate measures during natural hazards will reduce potential for loss. Market risks can be reduced by employing contracts between buyers and sellers. Contracts reduce supplier and buyer power and threat of substitution. The major human threat to greenhouse production is praedial larceny. Continuously policing the site or placing it in a high traffic area reduces risk from praedial larceny. Operational risks will be minimized by the action of the agrotrade committee in collecting and disseminating relevant information in a timely manner. The project will contribute to increased agricultural activity so the risk of reduced supply is diminished. EXPECTED IMPACT OF THE PROJECT Immediate Impact Increase in availability of new varieties of fresh vegetables on the market. Improvement in consistency of supply and quality of greenhouse crops. Create jobs in the agricultural and/ or tourism sectors. Increase skills in greenhouse technology and management for 75 local farmers and extension staff. Create opportunities for agriculture and tourism sectors with the formation of the agro-trade committee. Reduction in domestic fresh vegetable prices. Long-term impact A vibrant, sustainable agrotourism product reputed for high quality, uniqueness and impeccable standards. Promote investment in the rural environment. An improvement in the competitive advantage of agroindustries through collaboration with end-users of their 9

10 products. Reduction in foreign exchange leakages. Development of a diversified Dominica brand of agroproducts and activities. Expanded markets for small and micro-enterprises. Foster sustainable development and environmental conservation on a national level. Develop local festivals and theme nights centred on agricultural products. DIRECT PROJECT STAKEHOLDERS INDIRECT PROJECT STAKEHOLDERS Farmers Hoteliers Exporters of agricultural produce Extension staff Consumers of agricultural products Marginalized rural communities Agricultural marketers Since the project is aimed at the two major industries on island, the indirect stakeholders would be all Dominicans. The indirect stakeholders will through agro-trade network formed as well as other agencies and organizations identified as contributors. 10

11 SECTION II: ESTIMATE OF COSTS BUDGET ALLOTMENTS IICA CONTRIBUTION NAYA CONTRIBUTION TOTAL ($US) CASH ($US) IN KIND CASH ($US) IN KIND 1. Training (75 farmers, 5 3, , facilitators) Transportation Venue Promotion Lunches/ Snacks 3, Greenhouse Expert 7, , Committee meetings 1, , Preparation of technical manuals 3, , Greenhouses 75, , Planting material 5, , Contracts 2, , Security measures 3, , Miscellaneous 10, , TOTAL 108, ,

12 SECTION III: ESTIMATED TIMETABLE Expected results and/ or products Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Establish an agro-trade committee Identify interested hoteliers, exporters Convene first meeting of agro-trade committee Establish draft contracts Meetings of agro-trade committee Identify participating farmers (Demonstration farms) Identify several interested farmers Inventory the needs of farmers Identify and reproduce planting material (Nursery) Train farmers in seedling production Determine varieties of crops needed Source or reproduce planting material Reproduce technical manual Identify appropriate greenhouse technologies Reproduce manuals of best practices Train farmers Train farmers in appropriate greenhouse technologies Establish greenhouses Identify size and type of greenhouses needed Purchase greenhouses Establish greenhouses Month 11 Month 12 12

13 REFERENCES Coipel, A., Foye, J., and F. Esprit (2005). Greenhouse Needs Assessment Survey NGO-ADP Ltd. Esprit, S. (2007). Draft Strategic Plan for Agrotourism Development in Dominica. Zamore, U. (2007). Final Report on Survey of Suppliers of Agricultural and Agroprocessed Products Traded in the Tourism and Food Service Sector in the Commonwealth of Dominica. Interamerican Institute for Cooperation Agriculture. 13