CARIBBEAN DEVELOPMENT BANK

34th ANNUAL MEETING OF THE BOARD OF GOVERNORS

SEMINAR ON AGRICULTURE AND RURAL DEVELOPMENT

TRANSFORMING AGRICULTURE THROUGH THE DEVELOPMENT OF THE AGRIBUSINESS SECTOR

Presenter: Vassel Stewart

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TABLE OF CONTENTS LIST OF ACRONYMS......................................................................................................................iii

SUMMARY.......................................................................................................................................4

1. BACKGROUND........................................................................................................................5

2. OVERVIEW OF THE SECTOR.................................................................................................6

2.1. The Importance of the CARICOM Agri-business Sector .......................................................6

2.1.1. Economic Contribution of the Primary Production........................................................6

2.1.2. The Economic Value of the Agri-business Sector .........................................................6

2.1.3. Linkages with other Sectors.........................................................................................7

2.1.4. The Environmental and Social Benefits........................................................................8

2.2. Management of the Sector...................................................................................................8

2.3. Performance Competitiveness and Prospects ........................................................................9

2.3.1. The Products..............................................................................................................9

2.3.2. The segments ...........................................................................................................12

3. SWOT ANALYSIS OF THE SECTOR......................................................................................15

3.1. Strengths ..........................................................................................................................15

3.2. Weaknesses......................................................................................................................17

3.3. Opportunities ...................................................................................................................20

3.4. Threats.............................................................................................................................21

4. PROPOSED SECTOR DEVELOPMENT STRATEGY..............................................................23

5. THE PROPOSED STRATEGY FOR THE CARIBBEAN AGRI-BUSINESS ASSOCIATION.....26

5.1. LEGAL STATUS AND OWNERSHIP..............................................................................26

5.2. VISION...........................................................................................................................26

5.3. MISSION STATEMENT..................................................................................................26

5.4. GUIDING PRINCIPLES ..................................................................................................26

5.5. GOAL .............................................................................................................................27

5.6. MEMBERSHIP/MARKET...............................................................................................27

5.7. SERVICES/PROGRAMMES............................................................................................27

5.7.1. CABA Development Services ...................................................................................27

5.7.2. Industry Research and Development Service ..............................................................27

5.7.3. CABA COMMERCIAL SERVICES.........................................................................29

5.7.4. Investment Facilitation..............................................................................................32

5.8. ORGANISATIONAL STRUCTURE.................................................................................33

5.9. FINANACING................................................................................................................ 34

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LIST OF ACRONYMS

CABA Caribbean AgriBusiness Association CABFI Caribbean Association of Banks and Financing Institutions CAMID Caribbean Agribusiness Marketing Intelligence Development Network CARDI Caribbean Agriculture Research & Development Institute CARICOM Caribbean Community CDB Caribbean Development Bank CEDA Caribbean Export Development Agency CLA Committee of Lead Agencies CPEC Caribbean Programme for Economic Competitiveness EU SFA European Union ICI Informal Commercial Importers FAO Food & Agricultural Organisation GDP Gross Domestic Product HACCP Hazard Analysis and Critical Control Points System IADB International Agricultural Development Bank IICA Inter-American Institute for Co-operation on Agriculture IPM Integrated Pest Management MDC More Developed Countries MIF Multi- lateral Investment Fund OECS Organisation of Eastern Caribbean States OECS EDU Organisation of Eastern Caribbean States Export Development Unit PROCICARIBE The Caribbean Agricultural Science and Technology Network System RTP Regional Transformation Programme STABEX Stabilisation of Export Receipts on Agricultural Products UK United Kingdom US United States USA United States of America UWI University of the West Indies WHO World Trade Organisation

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SUMMARY

The paper examines the importance of the Agribusiness Sector in CARICOM in terms of its economic contribution, linkages with other sectors, the performance, competitiveness and prospects for specific commodity groups and individual products. It presents a SWOT analysis of the sector and proposes a developmental strategy composed of the following: 1. A policy position that recognises a bi-polar agri-business sector consisting of :

? Competitive Component ? Food and Environmental Security Component

The Food and Environmental Security component should not be subjected to WTO or similar free trade rules and should be safeguarded through the use of appropriate tariffs, while the Competitiveness Component should be subjected to free trade rules but also supported by effective, enforced anti-dumping and fair trade competition legislation.

2. The public sector should take lead responsibility for the development of the Food and

Environmental Security Component while, the private sector through the Caribbean Agribusiness Association (CABA), should take lead responsibility for the Competitiveness Component which will drive the sector.

The paper presents a strategic plan which would allow CABA to play the lead role in transformation of the agribusiness sector in the region. The strategy requires CABA to provide services under two major areas namely:

1. CABA Development Services

This will include the provision of services to members under the following functional areas: 1.0 Industry Research and Development 2.0 Policy Advocacy 3.0 Marketing Intelligence 4.0 Product and market development

2. CABA Commercial services This will include services which should be delivered to members and non-members with a motive to secure financial surplus. The services will include:

1. Consultancy services 2. Joint Marketing Co-ordination 3. Promotional Events 4. Investment Facilitation

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1. BACKGROUND

The Caribbean, perhaps more than most of the world, is experiencing a period of profound change in its agricultural landscape. Many of the economies in the Caribbean were built on preferential trade arrangements and international aid, arising primarily, from our historic relationship with Europe and to lesser extent North America. The changes in the international trade environment brought about by the World Trade Organisation, has resulted in the removal or negation of the preferential trade arrangements, whilst the changes in the geopolitical alignments have resulted in international aid to the Caribbean be reduced from a steady flow to trickle. The agricultural sector has arguably, been the major beneficiary of these arrangements, which were considered critical to the competitiveness of the sector in the region, given its lack of economies of scale and high production cost. Under this arrangement, the Caribbean concentrated on the large scale production of a limited number of agricultural products mainly for export in the primary and minor-processed bulk forms. The Caribbean is now faced with the challenge of moving from competing on the basis of ‘preferential trade and aid” to the new era which will require it to compete on the basis of “Technology, innovation and knowledge”. The Caribbean Development Bank known for its leadership role in Caribbean development, recognize that the this shift also require a move from the focus on primary agricultural products to one that focuses on the maximization of the value that can be added to these products by Caribbean producers and suppliers before sale. That is, the Bank wishes to provide leadership in facilitating the movement from the “old era of agricultural development” to the “new era of agribusiness development’’. This means that the region must develop the capacity to research, develop, produce, store, transport, process, distribute and promote value-added agricultural products and services along the business continuum from idea to post consumption. This paper represents one effort by the Bank to obtain the views of agri-business development specialists as to how this transition from the old paradigm of agriculture development to the new paradigm agri-business development may be undertaken. The paper examines the importance of the Agribusiness Sector in CARICOM in terms of its economic contribution, linkages with other sectors, the performance, competitiveness and prospects for specific commodity groups and individual products. It then outlines a SWOT analysis of the sector, defines the respective areas of responsibility and focus for the public and private sectors and then elaborates on the strategy that should be undertaken by the Caribbean Agri-business Association.

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2. OVERVIEW OF THE SECTOR

2.1. The Importance of the CARICOM Agri-business Sector

2.1.1. Economic Contribution of the Primary Production The agricultural sector in the Caribbean Community (CARICOM), continues to be a major underpinning of economic development in the member states, though to varying degrees. It is an established fact, that as countries become more developed, the relative contribution of the agricultural sector to Gross Domestic Product decreases and this is reflected in the variation of the sector’s contribution to GDP in different member states, as shown below. Countries Contribution to

GDP % of Exports Employment

Guyana, Haiti, Dominica, Belize

20- 40% > 50% >30%

St. Vincent, Grenada, St. Lucia, Suriname

10-20% 30-50% >25%

Jamaica; St.Kitts-Nevis

5-10% 10-20% > 20%

Antigua, Bahamas, Barbados, Trinidad

< 5% < 5% 5-10%

The above indicates mainly the contribution in terms of the primary agricultural sector and does not capture the contribution of the value-added sector in terms of the activities involved in the processing and marketing of the primary products. The contribution of the Agri-business sector is therefore yet to be determined.

2.1.2. The Economic Value of the Agri-business Sector An estimate of the value of the agri- food sector is presented below, based on the contribution of the value added from processing and trade.

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CARICOM+ CONSUMPTION US$ MILLION (Est. 2000)

CATEGORY PROD. IMPORTS EXPORTS CONSMP.% Meat & Prep. 450 137 7 580 15% Dairy & Eggs. 100 170 12 258 6% Fish & prep. 250 94 60 284 7% Cereals & Snacks 600 254 65 789 20% Fruit &Veg. Staple 700 182 231 651 16% Sugars, & conf. 400 86 163 323 8% Beverages 800 33 64 769 19% Animal feed 150 69 20 199 5% Misc.. 50 144 59 135 3% TOTAL 3500 1,169 681 3988 100% % of Total Consmp. 88% 29% 17% Source: CARICOM and CAMID Secretariat, Industry Associations, author's estimates; + excludes Antigua, Suriname, Haiti. The table above provides a rough estimate of the size of the agri-business sector taking into consideration the value-added in converting primary products to secondary products, such as processed meats and fish and juices, and secondary products such as snacks but does not include tertiary products such as restaurant meals. The data also does not include data from Antigua, Suriname and Haiti. It is felt that when these sectors and countries are added the value of the sector will exceed US$ 6 billion per annum.

2.1.3. Linkages with other Sectors The above also does not capture the importance of the sector in terms of linkages with other economic sectors particularly those of tourism, financial, education and health. In the tourism based economy, domestic food production contribute significantly, though insufficiently, to consumption of food in the hotels and helps to differentiate the tourism product. The tourism product is and can be further enhanced and differentiated by tourist visits to farms, recreational parks, processing plants and community food festivals. In the more agricultural based economies, the banking and construction sectors rely heavily on the income generated from the agricultural sector for growth and sustainability. Income from agricultural is also the main source of financing the education and for ensuring some level of food security, of rural families.

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2.1.4. The Environmental and Social Benefits Often overlooked, is the contribution of the agricultural sector to environmental and social stability. The Islands states of CARICOM, particularly the Windward Islands and Jamaica are characterised by ecosystems and topographies that are very fragile and can be easily damaged by agricultural practices. Most notable from a negative perspective are the potential hazards form poor agricultural practices in terms of erosion, water system contamination, threats to marine life. From the positive side are agriculture’s contribution to our water supply, to environmental esthetics and recreational activities. The environmental aspect of the agriculture as previously indicated is also a critical aspect of the tourism product. The above confirms the fact that the agri-business sector is a major contributor to the economic, social and environmental development of Caribbean countries.

2.2. Management of the Sector

The agricultural sector can be seen as being comprised of two components;

1. The traditional Component

2. Non-traditional Component

The traditional component is comprised of commodities such as sugar, banana, cocoa, coffee, citrus and spices that have been developed with an export focus based on preferential market arrangements to Europe and/or the USA. They are the sector's main earners of foreign exchange and major source of employment. These products are grown under both large plantation type systems and small scale commercial and peasant type systems. An important aspect of these traditional export products is the fact that they are managed by the private sector that has established organized industry associations, usually with government support. These associations undertake the planning of the industry’s development, often providing an assured processing or export market, subsidized inputs, technical assistance, research and in the case of bananas, hurricane crop insurance. This kind of management arrangement reduces marketing and production risks and allows farmers greater opportunity to focus on managing the production activity and is largely responsible for the success of these commodities over decades. It is a fact that in these industries, the private sector leads while government provides support based on the request of the private sector.

The non-traditional sub-sector has been developed around a variety of agricultural products including a range of fruits, root crops, vegetables, herbs and spices, livestock, fish and to a far less extent, forestry. This sub-sector unlike the traditional sub-sector does not benefit from centralized private sector management. In this arrangement the

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government develops the limited planning that occur in these industries, provide the technical assistance, research and market infra-structure and in some cases marketing arrangements. The individual small farmers are required to find markets, plan and manage their individual farm operations. These industries lack assured domestic processing or export markets, though in a limited number of instances private firms such as hotels processors and exporters provided fairly reliable markets for farmers. These industries have not been adequately served by governments in terms of technical assistance, research and development. In response, farmers have sought to establish either umbrella national agricultural associations or individual commodity associations similar to the traditional sub-sector, for example, the Jamaica Agricultural Society and the Agricultural Society of Trinidad Tobago, both of which are over 100 years old. The success of these umbrella national associations have, however, been confined to the traditional products such as, coffee, cocoa and the spices where these products have benefited from dependable export or agro-processing markets.

Efforts to develop individual commodity associations for non-traditional products have failed, due to both production and marketing problems. Where dependable markets have been found, such as in the case of paw-paw, hot peppers, ackees, pimento and yellow yams, production problems relating to diseases, high manual labour content, very low levels of irrigation and mechanization and inadequate level of production have stymied expansion of these industries. The production of these crops and also of livestock are therefore subject to much greater risks and places greater demands on farmers.

The reality is that the growth of these industries is significantly constrained by the absence of organized industry planning and technical support.

2.3. Performance Competitiveness and Prospects

The performance of the Region's agricultural sector as measured by the GDP, has always been erratic, given the regions susceptibility to vagaries of the weather, particularly hurricanes, but over the last 5 years, the general trend for many countries has been very slow or negative growth in the primary sector. The declining trend has become more evident since the implementation of trade liberalization policies and the specific terms of WTO Agreement on Agriculture, which has been developed largely in the interest of the developed countries. A summary of the performance, competitiveness and prospects for specific industries and segments in the sector is provided below.

2.3.1. The Products SUB-SECTORS

PERFORMANCE, COMPETITIVENESS AND PROSPECTS .

Meat & Prep.

Has shown consistent growth in poultry and pork, declining in beef, stagnant in small ruminant. Agro- industry is based largely on imported raw material for products targeted at domestic and regional markets. None of the current products are likely to be competitive without high

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tariff protection. Limited export competitiveness prospects based on high value-added content targeting the high end export market niche. Example would be rabbit meat.

Dairy & Eggs.

Significant decline in the dairy industry and no realistic prospect even with leveling of the international playing field. Eggs have shown steady growth and fair room for further growth in domestic and regional markets. No prospects for extra-regional export competitiveness even with increase investment in technology.

Fish & prep.

Growth in all segments of the market for marine and fresh water species, with demand in the fast food and export segments for fish fillets exceeding supply. Need for better management of and investment in marine fishing resources and fish processing infra-structure. Best opportunities lie in tilapia, catfish and shrimp farming especially for fillet production for export and for the regional fast food and hospitality markets, and in salted fish production from marine species for domestic and regional markets. CARICOM is internationally competitive in both marine and fresh water species.

Cereals & Snacks

Significant growth in has been achieved especially in the breakfast cereals market, including extra-regional export. Competitiveness has been based on imported raw material, tariff protection and high technology. Good growth potential in dried fruits as components of mixed snacks. Prospects in breakfast cereals and snacks from high fibre complex carbohydrates such as plantains, bananas, cassava and sweet potatoes and dasheen flavoured with Caribbean herbs and spices.

Fruit &Veg. Staple

Major growth area for fruits and vegetables driven by health consciousness. Growth greatest in the fruit segment where demand greatly outstrips supply for all tropical products, including ripe banana in the regional markets. Demand is being increasingly filled by imports. The region has been competitive in the regional market and in the small ethnic Caribbean export market segment. Main areas of opportunity;

-- Paw-paw for fresh fruit and fresh juices in all markets. -- Golden apple for fresh market and for agro-processing into juices,

nectars, confectionaries for all markets -- West Indian Cherries and sorrel for juice production for all markets --- Root crops ( yams, sweet potato, dasheen, cassava) for all markets,

especially fresh chilled or frozen products for the fast food and hospitality sector.

--- Ackees and Breadfruit for all markets. -- Seasoning pepper as a major vegetable for all markets --Hot pepper, fine-thyme, and shadow beni (cilantro) pimento for fresh

and dried ground seasoning for all markets; ---Organic Herbs ( ginger, mints, fever grass, cercea, channey roots)

Sugars, & Declining per capita demand in all markets and segments except in the

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conf. lower income levels based on health cons iderations. Competitiveness was based on protected and preferential price market which is being removed by 2006. This industry is not price competitive and no significant prospect for developing competitiveness except for limited opportunities in;

-- Environmentally friendly or organic sugar production targeted at the high end international hotel, restaurant chains and health food stores

-- Caribbean “branded” desserts and confectionaries -- Production of chewing cane for the international health food and snack

market

Beverages

Growth in both alcoholic and non-alcoholic industries. Competitiveness has been based on protected markets and differentiation based on organo- leptic quality. Protected market has or is being removed but competitiveness can be maintained for the differentiated product Greatest potential lies in; Fresh and single strength juice market, coconut water, branded spice and herb based rums, fruit based alcoholic beverages, nutra-ceutical drinks, bottled spring water and organic cocoa and coffee drinks and non-traditional herbal teas for all markets.

Animal feed

This has never been a competitive industry for the region and there is only limited prospects in the area of fermented by products feeds, especially if the support that this sub-sector enjoys in the developed countries is removed and the international playing field is leveled. The uncompetitiveness of this sub-sector is the major reasoned the livestock sub-sector is uncompetitive.

The Agro- industry in the region continues to perform poorly relatively to its potential and remains in a generally underdeveloped, state. The sector can be seen as comprising of two segments, namely;

1. Processing based on domestic raw material

2. Processing based on imported raw material

The sub-sector based on domestic raw material includes products such as sugar, rum, coconut oil and its derivatives, citrus fruit juices, cocoa and coffee powder, pepper and fruit based sauces, jams and jellies, chicken, pork and fish. These products are generally produced by the larger well organized firms with formal management systems supported by well trained and technically competent staff. In addition there are numerous small home based cottage industries that are involved in the processing of confectionaries, condiments and snacks mainly form fruits, seasonings and root crops. A major constraint to the development of the regional agro-processing industry, which depends on local or regional raw material, is the unreliable supply of raw material arising mostly from the disorganized nature of these industries. In general in can be said that the erratic

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performance has been due to both production and market failures with production been the major cause.

The sub-sector based on imported raw material included products such as wheat, soya beans and corns into oils, animal feeds and other derivatives and meats and non-food products such as fertilizers and pesticides. Production of these products is carried out by large food processing operations some of which are owned by foreign investors. Larger investors are willing to invest in these imported raw materials based industries due to the reliability of supplies and the large size of the market demand.

2.3.2. The segments There are large numbers and varied types of retail grocery stores and supermarkets in CARICOM. These include upscale supermarkets chains, conventional large supermarkets, small supermarkets, local family shops and convenience stores, retail public markets as well as street vendors. In several countries, particularly in Trinidad, Jamaica, Haiti, Barbados and St. Lucia, there are supermarket chains with outlets in the major towns throughout the country. Large chains include Hi Lo, which has 19 stores in Trinidad and 7 in Jamaica and J.Q. Charles in St. Lucia which, is reported to have 11 outlets in St. Lucia. These supermarkets are owned by national or regional companies. More recently however, major United States retail Club chains led by Price Mart have entered the regional retail segment and are providing significant competition to the local and regional retailers. K-Mart had also commenced building a store in Trinidad before it filed for bankruptcy, but is expected to return. This has forced local retailers to improve their infra-structure, operations product range and services. The major retailers such as Hi- lo and Tru-Valu in Trinidad & Tobago and JQ in St.Lucia have responded by consolidation through acquisition of smaller supermarket chains as well as individual independent stores. In an effort to reduce costs they have also increase their backward integration by expanding their direct purchasing from producers, processors and manufacturers. Hi- lo has also increased the number of own brands for products for which there is mass demand as a means of cutting price and increasing competitiveness. Despite these changes they are still a large number of importer/distributors who purchase products directly from local and overseas manufacturers. These distributors in turn sell to smaller wholesalers, supermarkets, grocery stores and counter shops, as well as the hotel, restaurant and institutional trade. Informal commercial importers (ICI’s) normally referred to as Higglers and Hucksters play an important role in food distribution system in countries such as Jamaica, Guyana, Haiti and the OECS countries. They are individuals who buy products in small amounts, mostly from wholesalers in the US, other CARICOM countries, particularly Trinidad and the French Islands then bring products back to their own countries mainly via large boats. They then either distribute the products to stores who have placed orders with them or simply sell them shop to shop. In some countries such as Jamaica it is estimated that up to 10% of consumer food imports are brought in by ICI's.

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The public retail market is a significant outlet for fresh produce in the major towns. In the rural areas, retailing is dominated by small shops that carry non-perishable products, with fresh produce seldom featuring among the product line up. In most countries the re are also small roadside or street retailers who operate on stalls carrying a mix of perishable and non-perishable products. The indications are that the supermarket segment will continue to increase their share of import as well as the retail markets. The consolidation of supermarkets is also expected to continue as national and regional chains seek economies of scale as a means of competing against the encroachment of Unites States retailers. The institutional segment includes the hotels, restaurants and government institutions such as the school feeding programmes, prisons and hospitals. This is the fastest growing segment of the food industry, which is led by the restaurant and fast food segments. The restaurant segment has seen tremendous growth all across the Caribbean as national, regional and international franchises expand their operation. Most noticeable has been the major influx of United States fast food chains in Jamaica and Trinidad and Tobago. At least 15 United States restaurant franchises are now present in the Caribbean. In Trinidad and Tobago 7 different United States franchised brands have entered the market over the last 3 years, in response to the growing demand for dining away from home. Caribbean franchises or individual owned restaurant chains have also expanded both domestically and regionally led by the Royal Castle chain in Trinidad and in the case of Jamaica, by Island Grill, Juicy Patties and Honey Crust Bakery and Restaurant. Both Island Grill and Honey Crust have also begun to expand to extra-regional markets in the United States. The hotel segment continues to be a growth area as it recovers from the effects of the 9/11 terrorism act in the United States. The school feeding programme represents significant demand for food products particularly in Trinidad and Tobago where government has been expanding the programme. The region however continues to be unable to secure a significant share of the food demand in the cruise ship industry, though some progress has been made. The restaurant segment including those in the hotels are expected to continue to show significant growth though expected weak economic performance in some countries will likely slow the rate of growth. Investment in the primary production sector has also been erratic driven in the most part by environmental conditions such as drought, floods and diseases which have affected income and profits and thus re- investment as well as new investments. In the MDCs, the private sector has made new investments in the condiments, rice, sugar, citrus, exotic fruit juice, vegetable, poultry, pork, marine fish and aqua-culture industries. Investments have decreased in the banana, paw-paw, mangoes, melons, dasheen, tannia, sweet potato and beef industries. In the case of paw-paw and tannia diseases are responsible for the reductions, whilst in the other cases lack of competitiveness is the fresh product market is basis of the problem. In the OECS countries, investments have decreased as a result of the non-competitiveness of banana, citrus, root crops, melons and vegetables, as well as the risk involved in agriculture in these hurricane or drought prone countries. Private

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sector investments have increased in Belize in the fruit and vegetable industries particularly in the hot pepper industry. In the case of governments, those in the More Developed Countries have sought to maintain or increase investments through accessing loans from the IADB to facilitate infra-structure repair and expansion, reform institutions and support investments in primary production of selected products. In the case of Jamaica emphasis is being placed on the tree crop industry including citrus, coconut, ackee and pimento, whilst in Trinidad emphasis is being placed on root crops, vegetable and aqua-culture. In the OECS countries the focus is less clear though organic production and processing of frozen staples have emerged as priority areas in some Windward Islands. The government in Belize has made very significant investments in improving the animal and plant health and food safety sub-sectors. It should be noted that funds for investment into primary and secondary production are available at generally acceptable interest rates in most countries, except in Jamaica. In countries such as the OECS and Trinidad & Tobago lack of demand for investment funds appears to be the problem. In the Windward countries, the European Union funds available to these countries under the STABEX and the SFA arrangements continue to be under utilized.

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3. SWOT ANALYSIS OF THE SECTOR

3.1. Strengths

• Commitment to a regional policy and strategy-- the Regional Transform Programme for Agriculture which was mandated by the Heads of Government in 1996 has defined the regional goals of the sector as follows;

1. Development and sustainability of an internationally competitive sub-sector 2. Ensure equitable distribution of sector income 3. Ensure sustainable food security 4. Ensure sustainable environmental security

• Mechanism for regional co-ordination of policy and strategies through the

Committee of Lead Agencies (CLA) which is responsible for the co-ordinating the RTP. The CLA consists of the CARICOM Secretariat, IICA, FAO, CARDI, OECS Secretariat, UWI, CAMID, CABA, University of Guyana and Industry Associations. In addition there are several othe r regional bodies such as CEDA and OECS EDU which can facilitate co-ordination.

• Diversified primary production. There are over 30 primary agricultural

products being produced on a commercial basis in most countries in CARICOM. • Strong and positive international position in the cuisine industry particularly

in spices. Caribbean food has gained international reputation and is among the fastest growing ethnic cuisine in North America and Europe. Products purporting to be of Caribbean origin are a major feature of the food industry, especially sauces, in these countries.

• Caribbean owned overseas agri-businesses and institutions . There are several

Caribbean owned importer/distributor companies located in Miami, New York and Toronto, and several retail companies and reataurants in these and other cities in North America and Europe. Several of these companies have complained about the weakness of the supply system in the Caribbean. Two Jamaican owned distribution companies based in Miami which supply all the major retail chains in Florida, including Wal-mart, for example, have indicated that they have gone to Costa Rica for the supply of hot pepper products due to the weaknesses of the hot pepper products supply system in CARICOM. Opportunities to supply the Auchan supermarket chain in France, the ADM Buss food processing and distribution company and Sainsbury Supermarket chain in England, and several supermarket chains in the United States remains unexploited due to this very reason. In addition there are a number of overseas Chamber of Commerce comprised of people from the Caribbean Diaspora who are seeking to establish trading relationships with the region.

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• Caribbean nationals in management positions in major overseas processing, distribution and retail companies. There are several such Nationals in management positions in major overseas processing, distribution and retail food companies who can facilitate entry of CARICOM food products, in their respective markets.

• Direct shipping service to Europe . The Caribbean has significant direct air and

sea service to Europe arising from the tourism industry and banana industry respectively. There is significant underutilization of the available air and sea freight space.

• Experience in supplying fresh produce to the major super market chains in

the U.K., selected United States and Canadian cities. Caribbean banana is widely distributed throughout the U.K retail sector. The non-traditional fresh and processed foods are also supplied throughout the retail segment, particularly the ethnic segment.

• Major International Caribbean Brands (Sandals, Angostura, Grace). The

Sandals brand has emerged as the number one international brand in the “all inclusive” segment of the hospitality industry and is advertised at prime time on CNN, the T.V station with the greatest global coverage. Angostura also enjoys significant international recognition, whilst Grace is well established among the Caribbean ethnic market segment in both the food and financial industries. It should be noted that the CL Financial Group in Trinidad & Tobago has recently launched its “Worlds Brand” with heavy emphasis on the alcoholic beverage market and has commenced the development of several fruit based alcoholic beverages.

• Opportunity to link our food with our unparalleled achievements in sports.

CARICOM has produced the greatest number of world class sprinters per capita in the world and continues to dominate international short distance running. The Caribbean has featured in the finals of all of the World Games and Olympic Games sprint finals (100, 200, 400 meters) for men and women over the last 25 years, and is the most consistent performers except for the United States. The current men number 1 outdoor 100 meters sprinter, number 1 indoor 200 meters and 400 meters sprinters are from the Caribbean, as are the world number 1 women indoor 4 * 400 meters relay team and world number 1 women 100 meter outdoor sprinter. The exciting development is that, these outstanding athletes are now coming not only from Jamaica as was long the case, but now from across the Caribbean, Trinidad, St.Kitts-Nevis, Grenada, Bahamas. Note must also be taken of the Caribbean’s considerable achievements in international boxing, cricket and football. The opportunity to link the promotion our food to our success in athletics are substantial and Caribbean businesses have failed to capitalize on this.

• Our strength in the growing market for international Carnival events. The

Caribbean has exported its Carnival to several major cities in Europe, North

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America and is now expanding to Asia. These events always feature Caribbean cuisine and provide a formidable platform for promoting Caribbean foods.

• Our outstanding position in the international music industry. Reggae music

has not only spread to every corner of the globe but has engendered a desire for Jamaican and by extension Caribbean culture including its food. This, as the case with Carnival and athletics present a significant vehicle for promoting our food.

• Our position as the cruise ship capital of the world. This industry holds

significant promise as a market for Caribbean food products but will require greater and consistent efforts to break into this market in a major way.

• The size and durability of the regional tourism industry. This industry is large

and growing and wishes to differentiate itself through greater utilisation of Caribbean foods. Although the industry is currently using significant amount of Caribbean food products there are major opportunities for increased utilization of Caribbean sourced products, particularly in the area of staples, fruits and fruit juices.

• The commitment to upgrade information systems. The region has begun to

modernize the agri-business information system through the CAMID Network, which includes a supply and demand forecast, a planning database, an electronic trading mechanism and a transportation database.

3.2. Weaknesses

• The management strategies in the Ministries of Agriculture which does not allow staff to be rewarded based on performance and this is a major disincentive for improved performance.

• The operational strategy of CARDI. The Institution continues to operate offices

and research field stations in each country. These research stations are generally seeking to carry-out low technology research relating to agronomic practice but even here they are starved of financial resources. Further most of this type of research work can be done by the agricultural educational institutions and by the Ministries of agriculture that often have more resources. In the meantime there is tremendous need for increasing research that will lead to higher levels of irrigation and mechanization on small farms, for increasing the capability in biotechnology, Integrated Pest Management and organic farming. These are of major importance in the quest to improve productivity, reliability of production and competitiveness. The resource being used to maintain these country offices could be used in developing two effective research centres focusing on IPM, Bio-technology and organic farming thus making the Institute more relevant and effective.

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• The weak impact of the Committee of Lead Agencies (CLA). This body which was established to lead the Regional Transformation Programme, comprises all the major regional and international organization involved in the agri-business in CARICOM and provides an excellent mechanism for co-ordination of the planning and implementation of agri-business strategies and programmes at the regional levels and to a lesser extent at the national level. However, the absence of a coherent strategy has resulted in the CLA having very little impact on transforming the sector. The RTP initially focused on a strategy of developing thematic areas such as Policy, Technology Development and Transfer, Marketing, Finance, Agri-business, Water Management and Forestry. This strategy was, however, impractical in the absence of the identification of the products to which these thematic or functional areas would be applied. As a result, the strategy was adjusted to include a focus on commodity/industry development. However, the inadequacy of funds and the inadequate administrative mechanism has led to very slow implementation of the industry development strategy and very little to show after 6 years.

• The drifting of Caribbean Agri -business Association (CABA). CABA was

established in 1998 to provide leadership to and co-ordination of the private sector efforts to transform the agri-business sector. However after 5 years the Association still does not have an agreed strategic plan, an adequate or agreed administrative mechanism nor a significant source of funding. It impact has therefore been unsatisfactory.

• The inappropriate strategy of the Caribbean Export Development Agency

(CEDA). This organization was established to promote and support the export of CARICOM products. Over last 5 years it main strategy has been to assist individual firms at the national level with improving various aspects of their operation so as to achieve or maintain market access and to be more competitive. This strategy of intervention at the firm level and at the national level limits the impact of the organization in terms of the number of organization it can reach and the time and cost of the intervention. Secondly, the national intervention often results in competition with national or sub-regional organizations present in all countries and which have similar mandate. As a regional organization, its focus should be on interventions at the industry level in those functional areas that can be delivered under collaborative arrangements, it should be wholesaling rather than retailing services and should be located in the overseas market place rather than compete at the national level with national export development agencies. In addition the organization obtains limited financial resources from government and now enjoys weak support form the European Union which was once its major source of financing. To further compound the situation, the organization has been essentially leaderless for more than 1 year.

• The inadequacy of Caribbean Agri -business Marketing Intelligence

Development Network (CAMID’s) resources. The Network has had to seek development funds and undertake consultancy in order to implement its

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development programme, which seeks to modernize the regional agri-business intelligence system. This financing strategy slows the process and is constraining the pace at which the modernization of the information sector can occur.

• The uncertainty of PROCICARIBE Network. This is meant to provide a

mechanism for co-ordinated planning of research in the region and consists of 12 thematic and product network, (e.g. post-harvest, IMP, vegetables, root crops etc.) However after 7 years only 4 of the individual networks can be said to be performing satisfactorily. These are networks that are co-ordinated through a full time Secretariat and are operated on the basis of private sector principles. There is the general view that PROCICARIBE is comprised of too many networks and that the current struc ture and modus operandi is unsustainable. A restructuring of the Network is expected to be undertaken by IICA and CARDI.

• The inadequate resources of OECS Agricultural Unit. The OECS Secretariat

has established an Agricultural Unit in order to more effectively co-ordinate the planning and implementation of the sub-region agri-business programme.

• The inadequate private sector linkage of UWI. The UWI over the last 5 years

has restructured its training programme to better address the needs of the agri-business sector through its agri-business degrees. However its research in primary production, product development and food processing is not sufficiently linked to specific needs of private sector companies and no sustained attempts are being made to effectively commercialise the useful research that has been done. Furthermore there is a major need for the development of small farm equipment, innovative irrigation systems and food safety systems, areas in which the University is best placed to take the lead but has not been active.

• The inadequacy of technological advances in the primary production and

processing sectors . The primary production sub-sector continues to be highly underdeveloped especially in the area of non-traditional products where the level of irrigation and mechanization is less than 10 %. The absence of irrigation system is one of the most limiting factors in the transformation of the sector given its impact on productivity, risk and reliability of supplies. In the area of processing, most plants do not have or not in the process of putting in place HACCP systems which are becoming a pre-requisite to enter new and maintain existing markets.

• Our inability to effectively utilise development funding. The region has

developed a reputation for inability to effectively utilise development funds. This is particularly so in the case of European Union funds, where financial resources available under the Lome Agreement or under STABEX have not been, and now under SFA, continues to be heavily under utilized. In some cases under the Lome Agreement funds have reportedly been loss after years of non-use. The difficulty arises from the inadequate mechanisms for project development and management in the sector, particularly in the public sector which generally has responsibility

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for un- locking the funds. In response to this undesirable situation, the development agencies led by the European Union are increasingly making the development funding available to the private sector and this has opened a new opportunity for reversing the situation. However, in many instances governments are still required to be involved in the process and could still be a source of constraint.

• The culture of individualism. It is recognized that a collaboration at all levels of

the sector and industries will be necessary in the efforts to develop and maintain competitiveness. Experiences have shown however that this is very difficult in the region given our strong culture of individualism.

• Inadequate strategies to commercialise the research work of the food

technology research institutions in the region. There are national food technology institutions in member countries charged mainly with the responsibility of value-added agro-product development. Some of these, particularly in Jamaica, Trinidad, and Grenada have developed products with good market potential, some of which have been successfully commercialized. However, with the exception of the SRC in Jamaica, several of these products with good market potential have not been commercialized due to the absence of systems to facilitate the process.

3.3. Opportunities

• The home meal replacement market. The trend towards eating out is increasing rapidly, driven by the changing labour market, technology and advertisement. It is currently estimated that only 55% of American meals have a home made component. A similar life style trend is occurring in Europe, the Caribbean and to a much lesser extent Asia. This points to the fact that the restaurant and pre-cooked segments of the food market will become the dominant segments.

• E-commerce market, b2b and b2c billions, over 35% of USA population can be

reached on line.

• Tremendous growth in ethnic cuisine market and strong position of Caribbean cuisine especially in USA & Canada.

• The massive growth in supermarket “own” label market segment estimated at 20% of the supermarket trade in the USA and is growing rapidly in EU and Canada and the evident interest in Caribbean products.

• Growth in the nutraceuticals (plants with distinctive disease preventative or

health enhancement capacity) market segment in USA 7% per annum.

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• The 15-20% growth in the organic and natural food sector and the absence of major preferred brands in this segment in all markets.

• The continued strong growth in the specialty food market and the natural

association of the Caribbean with this segment.

• The strong growth in the snack food, juices, cheese, fish and desserts market, particularly in the EU.

• The fact that price is the third most important factor after quality and freshness

for European consumers.

• The bio-terrorism requirements which will provide an advantage to those firms that are able to comply.

• The opportunity to access major USA retail chains through their subsidiaries and

affiliates in the region (e.g Price Smart, members of IGA).

• The significant amount of development funds available in the region, particularly to the private sector, including the Trade Sector Support Programme established by Trinidad for CARICOM countries, STABEX, SFA, Pro- invest, C-trade com, MIF, CPEC etc.

• The extremely high liquidity in the banking system in Trinidad, the

accompanying low interest rates and the availability of this to other CARICOM countries.

3.4. Threats

• The tremendous influx of foreign restaurant franchises in the region (at least 15) and their successful promotion of foreign food products.

• The inadequate number of Caribbean restaurant in the extra-regional

market place and the increasing share of the food that will represent.

• The inadequate transport service between CARICOM countries.

• Obtaining and maintaining access to the supermarket segment will become increasing difficult as supermarkets consolidates, ruthlessly remove weak performing products, expands their own labels in high demand products and seek to purchase low cost imitation products.

• The high cost of brand promotion and its critical importance to maintaining and

increasing market share.

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• High interest rates in Jamaica. • The high cost of market entry, particularly in the supermarket and cruise ship

industries resulting form food safety regulations .

• Competition from Costa Rica. This country is CARICOM’s most direct competitor in the ethnic food market and there highly organized industries have been out competing the region even where there products have weaker organoleptic qualities

• The lack of a mechanism to exploit the potential market presented by Caribbean

owned food marketing and non Caribbean owned companies in which Caribbean nationals are in important management positions.

• The rapid rate and extent to which bio-technology and information technologies

are impacting on the competitiveness of the food industry and the absence of a strategic response from CARICOM.

• The inadequacies of the national and regional systems for animal and plant health security and food safety.

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4. PROPOSED SECTOR DEVELOPMENT STRATEGY

1. A policy position that recognises a bi-polar agri-business sector consisting of :

? Competitive Component

? Food and Environmental Security Component

The Food and Environmental Security component should not be subjected to WTO or similar free trade rules and should be safeguarded through the use of appropriate tariffs, while the Competitiveness Component should be subjected to free trade rules but also supported by effective, enforced anti-dumping and fair trade competition legislation. This policy should also apply to intra-regional trade.

2. The public sector should take lead responsibility for the development of the Food

and Environmental Security Component while, the private sector through the Caribbean Agribusiness Association (CABA), should take lead responsibility for the Competitiveness Component which will drive the sector.

3. CABA should facilitate the development of the Industry Associations comprising

of all the stakeholders in the sector. The Associations in turn should take the lead in developing each industry and should conduct industry analysis which should form the basis for assessing industry competitiveness and for preparing development plans.

4. The products identified as having the potential to be competitive should be

included in the competitiveness sub-sector whilst the others should be included in the environmental and food security sub-sector.

5. Government and the Industry Associations members must then provide financial

resources backed by development agencies to implement the industry development plans.

6. Institutional reform of the Ministry of Agriculture, UWI, CEDA, CABA, and

CARDI should be undertaken to ensure that these institutions develop their technical assistance and research work programmes based on needs submitted by the Industry Associations. In this respect the following institutional focus is recommended;

1. Ministries of Agriculture---- Food and environmental security and

traditional productivity research and policy formulation. 2. UWI----Training and research in small farm mechanization, irrigation,

food product development and food safety, traditional productivity rsearch.

3. CARDI---IPM, Bio-technology and organic farming

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4. CABA--- Competitive/commercial agriculture production, marketing, food processing and policy advocacy.

5. CEDA--- Withdrawal from the agri-business sector, concentration on other sectors and industries and overall promotion of Caribbean products and services.

7. The Ministries of Agriculture should be reformed, such that, the Extension

Service is either removed and be assigned to the industry associations along with the equivalent financial resources or such that the remuneration of the Extension Officers is based on their performance with respect to their defined responsibilities to the private sector industry associations.

8. The national and regional associations must develop specific strategies to expand

CARICOM’s share of the domestic/regional household market, the regional tourism market, the regional fast food market and the high end extra regional niche markets segments.

9. The facilitation of massive investment in the establishment and international

expansion of a Caribbean Cultural Restaurant Franchise, drawing on investments from the Caribbean Diaspora, major Caribbean private sector investors, government and the industry associations. This Franchise will integrate Caribbean food with its language, music, arts and craft and provides the means for pronounced differentiation of the Caribbean product and sustainability of its long term competitive advantage

10. Facilitation of the establishment of a Caribbean Food Exporters Club as a

mechanism for coordinating the production and export of Caribbean food products to extra regional markets.

11. Facilitation of the establishment of a Caribbean Overseas Food Marketers Club

including foreign importers, distributors, retailers, restaurateurs, as a mechanism for coordinating the purchasing, distribution and more importantly, the promotion of Caribbean food products in extra regional markets

12. Establishment of Caribbean owned distribution centres in Miami, Rotterdam,

New York and Tokyo should be a priority for the region especially to support the restaurant franchise and an e-commerce marketing strategy with emphasis on the gift market.

13. Exploitation of the non-food component of the sector through facilitation of

significant investment in; (i) The forestry and lumber industry especially as it relates to environmental

security.

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(ii) Recreational theme parks (e.g.flowers, animals, butterflies, fish, herbs and

spices)

(iii) Pet Industry (e.g. dogs, donkeys, monkeys, birds)

14. Food industry leaders such as Sandals, CL Financial, Neal and Massey must be

involved in the development and implementation of industry and sector development strategies.

15. Increase modernization of the regional agri-business intelligence systems must be

given the highest priority. 16. The sector must ensure the establishment of national and regional animal and

plant health and food safety systems with the capacity to meet international standards and requirements.

17. Stronger alliance with the Caribbean Tourism Industry particularly the Caribbean

Culinary Federation and the aggressive promotion of Caribbean cuisine in the hospitality sector as a means of differentiating the Caribbean tourism product.

18. Production research, product development and promotion of Caribbean cuisine

and brands must be given the highest priority by the associations. The promotion of Caribbean brands must be closely linked to Caribbean achievements in the international sports and music industries

19. The sector needs to develop a region wide agri-business insurance programme

covering primary and secondary production with the cost being shared by both public and the private sector.

20. The sector needs to strengthen the alliance with the financial sector under the

auspices of the Caribbean Development Bank and the Caribbean Association of Banks and Financing Institutions (CABFI)

21. Governments must apply a service charge on imports of food to support the

development of the industries consistent with international practice rather than with respect to the letter of international agreements. The funds should be distributed to the industry associations in proportion to their existing or potential contribution to the sector

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5. THE PROPOSED STRATEGY FOR THE CARIBBEAN AGRI-

BUSINESS ASSOCIATION

The recommended sector development strategy calls for CABA to take the lead role in the development of the competitive sub-sector. The following outlines the writers view as to the strategic approach that should be pursued by the Association.

5.1. LEGAL STATUS AND OWNERSHIP Not for Profit Company owned by national and regional agri-business Associations.

5.2. VISION CABA should seek to be the acknowledged regional leader of a vibrant and growing agri-business sector in CARICOM enjoying the enthusiastic involvement of all its members and the respect and support of the national, regional and international agri-business community.

5.3. MISSION STATEMENT To promote and co-ordinate the sustainable development of the Caribbean agri-business sector through the provision of high quality affordable developmental assistance, business services and advocacy to national and regional agri-business associations and co-operate entities.

5.4. GUIDING PRINCIPLES The association will be guided by the following principles: ? Teamwork ? Fairness ? Honesty ? Equality ? Transparency ? High quality ? Sustainability

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5.5. GOAL To establish CABA as a respected and sought after leader in the agri-business sector in the region and to ensure its financial independence by end of 2006.

5.6. MEMBERSHIP/MARKET

1. Regional commodity industry associations 2. National agri-business associations 3. National and Regional corporate entities 4. Overseas corporate entities

5.7. SERVICES/PROGRAMMES It is proposed that CABA provides services under 2 major areas, namely;

1. CABA Development Services 2. CABA Commercial services

5.7.1. CABA Development Services This should include those projects and activities for which development fund will be sought from development agencies and will also include services that will be delivered at cost recovery rates to members. These are also the services for which members would pay their membership fees. These will include; 1. Industry Research and Development 2. Policy Advocacy 3. Marketing Intelligence 4. Product and market development

5.7.2. Industry Research and Development Service This service should include: 1. Establishment and or strengthening of industry associations. CABA will provide

direct assistance to two (2) types of industry associations, regional commodity associations and national umbrella associations, such a farmers associations, processors associations and exporters associations. Strengthening will be achieved through provision of secretariat services to regional or national associations, training and preparation of projects proposal and general advice.

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2. Conduct of industry analysis and planning. The Association will undertake analysis of

all the commercial agro-industries in the region. 3. Preparation and co-ordination of the implementation of industry development plans.

Based on the outcome of the industry analysis CABA will facilitate the preparation of development plans and assist where required in their execution. The preparation of the development plans will be the basis for establishing or strengthening industry associations.

Policy Advocacy CABA will actively initiate and participate in policy discussion and advocacy through: Position papers, Seminars, Town Hall meetings, Workshops, participation in internationa l negotiations through being part of or providing advice to, national or regional negotiating teams.

Marketing Intelligence The Association should through incorporation of the CAMID Network into CABA, provide the sector with the following marketing intelligence services. The Product Supply Forecasting Mechanism will allow for information to be available on the future product supply situation at the individual farmer, district, country and regional levels for individual products. Domestic buyers in each country will be given access to the database and will be able to search for suppliers of a product in a particular area or in the whole country who can supply products within a particular period. The forecasting software will not allow buyers and sellers to communicate via the computer. Buyers who do not have access to a computer will be able to contact central locations by phone for such information. The supply forecast will be a very important technology introduction in the in the sector and will go a long way in assisting buyers to monitor their suppliers. A demand forecast model which will utilise historic data and surveys of selected buyers to forecast demand will also be developed. The Agri-business database which is accessible through the CABA web site, will allow authorised members nationally and regionally to store and retrieve data on a commodity and thematic basis inclusive of; Industry profiles, Market profiles, Trade Statistics, Production profiles, Production trends, Investment profiles, Supplier and buyer profiles, Production technology packages, Post harvest technology packages, quality assurance protocols, Price trends, Current market prices, Processing technology packages, Supply forecast, Market opportunities, Current sources of inputs, Source and conditions for accessing funding, Trade agreements, Government policies & Support agencies, Industry news and events.

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The Freight Availability Database will be accessible via the CABA Website. It will allow providers of air, sea and land freight services in the region to post details on their freight services in terms of up to date schedules and rates. The software will allow authorised traders to access the database to find the most appropriate transportation solutions. Exporters will also be able to post their needs for freight service and have providers bid to obtain their business. Product and Market Development The sector analysis indicated that the restaurant segment will take an increasingly large percentage of the of the agri- food market. Secondly, obtaining and maintaining access to the supermarket segment will become increasingly difficult as supermarkets consolidates, ruthlessly remove weak performing products, expands their own labels in high demand products and seek to purchase low cost imitation products. This trend is already very evident with respect to CARICOM products as several supermarkets are carrying imitated Caribbean products under their own brand. The supermarket segment is also very price sensitive and a few cents difference in price can lead to one securing or loosing a market. The situation can be quite different in the restaurant segment, especially in the high end niche, where the cost of the food product is often a small part of the total cost of the meal and thus the market is not as price sensitive. Given CARICOM inescapable high production cost, the high end restaurant segment must be a major target for CARICOM. A major and most urgent focus for CABA should be that of facilitating the establishment and international expansion of a Caribbean cultural restaurant franchise, targeted at the higher end of the restaurant industry. This will require CABA working with major Caribbean private sector investors, governments, Caribbean Development Bank and Development Agencies to undertake this venture as a prerequisite for transforming the sector. The development, improvement and promotion of primary and processed food products targeted at this and other segments will also be an important aspect of the Associations responsibility. It is expected that the association will work with Caribbean overseas based organizations such as the Caribbean American Chamber of Commerce in expanding the markets for Caribbean agri -business products.

5.7.3. CABA COMMERCIAL SERVICES This will include services which should be delivered to members and non-members with a motive to secure financial surplus. The services will include; 1. Consultancy services

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2. Joint Marketing Co-ordination 3. Promotional Events 4. Investment Facilitation This component of the Association’s business scope should be established as a separate legal subsidiary if deemed necessary. The main aim of the commercial arm should be to ensure the sustainability of the developmental arm which would be the main reason for CABA’s existence. The separation of the developmental component from the commercial component would allow for the avoidance of conflict of interest and efficiency in the execution of the developmental services. Consultancy Service

The Association should provide consultancy services to; (a) The membership The preparation of industry plans will result in the need for the implementation of many projects on behalf of the national and regional associations. CABA Development would have assisted the members in preparing their plans, but the plans would be submitted for funding by the members, that is, either by the commodity associations, the national associations, the regional associations or private companies and not by CABA Development. If they were to be submitted by CABA, then more often than not, CABA would be unable to bid for projects and to benefit directly form the funds. Many development institutions have a policy of not providing salary support to the staff of beneficiary organization, except on a short term basis as part of a strengthening exercise. Further many see a conflict of interest if the project sponsors and managers are also the project beneficiary. Under the separation arrangement, CABA would be able to bid for projects just like any other private consultant or firm. CABA would only submit request for funding when it is the direct beneficiary or when the organisation’s policy makes it appropriate for CABA Consultancy to be a service provider. (b) Non-member private companies. CABA would provide consultancy service to firms and organizations in the private sector. Some of these firms or individuals maybe members of the commodity or national associations but would have need for agri-business services, that are beyond the services that CABA Development would provide to their associations under the membership agreement. This would involve preparation of business and marketing plans, marketing research feasibility studies, product and process improvements. (c ) Government and Development organizations . Governments, regional and international organisation are major clients for agri-business consultancy service. Given the wealth of knowledge and access that CABA Consultancy would have as a result of being part of CABA, it will be well placed to provide these entities with consultancy services either as a firm or through its individual staff and associates. CAMID staff already provides such services to development agencies.

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Joint Marketing Co-ordination A critical component of any export strategy of the region is the need for small and medium size companies to be engaged in a joint, collaborative export programme. This is intended to provide these SMEs with the economies of scale and more reliable supply capability and thereby assist in increasing market access, competitiveness and market share in extra-regional markets. This service will involve co-ordination to ensure; ? Identification and negotiation for purchasing contracts with buyers ? Consolidation of products to satisfy volume requirements of large buyers ? Consolidation of financial resources to jointly promote products ? Joint procurement of inputs to reduce unit costs ? Sharing of cost of information procurement ? Joint negotiation for freight space and rates ? Joint negotiations for development assistance ? Stronger lobbying voice with respect to government policy CABA should commence the trading activity through the Electronic Trading Facility developed under CAMID, which will allow for communication between buyers and sellers via the computer. Sellers including packinghouses, processors and importers, will be able to post on the site what they have for sale. Domestic and overseas buyers such as wholesalers, hotels, supermarkets, restaurants and exporters will be able to browse and select products from the offerings from sellers, as well as advertise their requirements on line for the attention of sellers. In the domestic and regional markets the individual companies including the packinghouses and processors will be responsible for supplying orders placed with their firms. In terms of the export market CABA should work with exporters in the region and with existing Caribbean companies in the export market place to establish Caribbean Warehouses. These Warehouses should be jointly owned by the regional exporters, the overseas partner and CABA and managed by the overseas partner. The Warehouse should be able to make timely delivery of products to all type of buyers but CABA should place major emphasis on the restaurant and gift markets. A key component of the joint market should be the establishment and promotion of a regional brand. This may not be a new brand since it may be possible for an existing Caribbean brand to become the regional brand.

Promotional Events This component of the CABA operations should undertake promotional events on a commercial basis aimed at creating awareness and preference for Caribbean products. This should include; 1. Food Festivals 2. Agricultural Fairs 3. Farmers’ Balls and Fetes CABA should undertake these events at two levels;

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1. At the national level CABA sould assist its members in executing such events to allow them to generate revenue and to facilitate the payment of their membership fees.

2. In the overseas market CABA Commercial should promote and host “Caribbean Food Festivals” in major cities in North America, Europe and Japan. These festivals should be targeted at the high income clients consistent with the niche that will be targeted by the Caribbean Restaurant Franchise.

5.7.4. Investment Facilitation CABA should identify opportunities for investment in the sector and prepare investment profiles and feasibility studies which it should sell to interested entrepreneurs and businesses. Further the association should assist investors in working through the political and administrative constraints to investment on a fee for service basis.

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5.8. ORGANISATIONAL STRUCTURE The following organizational structure is recommended.

CABA PRESIDENT

CABA C.E.O & SECRETARIAT

CABA BOARD ( Heads of national agri-business associations, regional commodity associations and cooperate entities)

EXPERT COMM./ BOARD OF TRUSTEE

CABA COMMERCIAL

National Agri-business Associations, Regional Commodity Associations, and Corporate entities.

National Commodity Associations

Individual stakeholders

CABA DEVELOPMENT

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5.9. FINANACING

1. Membership fees. Members comprising of national and regional agri-business associations and corporate bodies should benefit from a suite of information and technical services for which they should pay an annual fee. The information service in particular should be of value to members, several agri-business associations are already seeking such information services. In some instances CABA would provide secretariat service for regional organizations.

2. Fees from use of forecasting software . Buyers including packing houses,

processors, exporters, importers, wholesalers and retailers would be required to pay for the service. Government would also have to pay for data to allow for greater accuracy of national forecast.

3. Fess from e-commerce service. Direct fees would be charge for using the site.

4. Fees from consultancy services. This is expected to be a significant source of

income. 5. Funding from development agencies. This will be the main source of financing

the industry analysis and the industry development plans. There are several source so funding, some such as Pro- invest are specially targeted at industry associations. The M.I.F. is already showing very positive signs of providing CABA with significant financial support for industry development.

6. Revenue from promotional events. This has the potential of being a major

source of net income if effectively managed. The potential for extra-regional food festivals targeted at the high end of the market can be very lucrative. The annual farmers’ ball which could be held at Christmas time for example, would give farmers a sense of value and importance and could potentially be a major source of revenue for national members and indirectly CABA.

7. Revenue from buying shares in Caribbean Restaurant Franchise.

8. Revenue from investing surplus in mutual funds .