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Agriculture is a business

Original article from ttfi.net

Agriculture is a business

Release Date: 21 December 2009

What’s the background?

After the food price spike in 2008, many of the region’s citizens and politicians became concerned about the decline of the agriculture and the poor state of food security throughout the region. A high reliance on imports is now typical in many Caribbean countries. A great deal of talk has focused on producing more food within countries to supply the needs of local people more effectively. The challenge is how this can be achieved without subsidies at prices that are competitive with imports because agriculture in the region has not evolved much beyond its traditional roots and tends to be highly labour intensive, inefficient, low yielding and inconsistent in the way it delivers a contribution to national economies. But there are examples in the region that show how these challenges can be overcome. One is Montpellier Farms which is located in Antigua.

How did the story start?

It started with an Israeli agricultural specialist, Micha Peretz, who was asked to help address some agricultural production challenges in Jamaica in 1983. Following his time in that country he was invited to go to Antigua to help establish a large horticultural unit and became the farm manager for seven years. The farm eventually failed because the resources were not available to address one of the greatest risks to agriculture in that country - namely adverse climatic events, in particular severe droughts that are often experienced in water-poor Antigua.

What happened next?

Micha went back to Israel in 1992 but returned to Antigua in 2000 with a plan. He was going to set up his own large horticultural operation doing it in a way that would mitigate the risks that he would face. His many years experience in Israel provided him with a high degree of expertise in risk management, in particular in the field of water use efficiency and drought management. He had also had a great deal of experience in value chain development and linking production with end client needs.

How did he set things up?

He teamed up with a local Antiguan business partner to ensure he had strong local connections and began developing a 70 hectare property that is today known as Montpellier Farms. The aim was to provide a select range of products not only for local customers but also offshore clients in the UK and USA with whom he set up mutually beneficial arrangements. In order to be able to do this he needed to ensure that he could schedule and manage his production to be able to deliver upon the commitments he had made to clients both within Antigua and offshore. This resulted in the installation of a sophisticated highly efficient drip irrigation system which included a back-up desalination unit to assure supplies of water even during the most severe droughts. He built 7 ha of greenhouses and sheltered growing houses to optimise the quality of his outputs. He also focused on a limited range of high value crops including canteloupes and melons (which are highly regarded overseas), butternut squash, a mini papaya that is particularly sought after in Europe, specialist tomatoes and sunflowers.

Why is this company a success story?

The Farm is highly profitable without a need for subsidies or support, exports over 33% of its total production and is expanding its business further by linking up with cruise ship operators and satellite growers. Micha is also in the process of developing a similar large operation with satellite growers in Guyana where water is more plentiful and there are many enthusiastic youthful farmers.

What does this mean for T&T?

The reason this farm has been a success in a small high cost Caribbean island nation is because it has been developed and run as a totally commercial business from day 1. To do that means being able to effectively manage risk in every area - production, marketing, geographical location, crop selection, timing, and disaster management. Success in agriculture can be achieved in the Caribbean - and T&T - but only if enterprises in the sector are managed and run as businesses.

Useful link:www.shigam.com (this includes a YouTube video showing Montpellier Farms operations)