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Modernizing agribusiness in Guyana

 

Abundant land and water, all outside the Caribbean hurricane zone, gives Guyana the potential to be the breadbasket—and perhaps the fruit basket—for the region.

But despite international demand for higher-value, non-traditional produce, the country has relied for centuries on just two exportable crops, rice and sugar. Reasons abound: a lack of commercial-sized farms dedicated to non-traditional crops, limited financing for new projects, outdated farming methods, and a disconnect between international buyers and local producers. To compete globally, Guyana needs commercially viable lead or “anchor” firms with modern farming techniques and international market connections, which would then contract Guyana’s many small farmers to supplement their export shipments.

Through this market-led value-chain approach, the USAID Guyana Trade and Investment Support (GTIS) project, managed by CARANA, is taking the country’s agricultural industry in a new direction.  First, the project worked with the National Agricultural Research Institute (NARI) of Guyana and a team of New York-based Guyanese investors to set up a demonstration farm using modern agriculture techniques. The success of that farm—beginning in July 2010, it will function free from USAID/GTIS assistance—inspired two anchor firms to build their own modern farming facilities.

Bounty Farm Ltd., Guyana’s single largest poultry producer, established an acre of greenhouses to conduct crop trials of exportable produce. Shigam Inc., an Israeli farm based in Antigua, is building greenhouses and planting non-traditional crops on a 200-acre concession near the community of Hauraruni. In addition to decades of experience in modern farming techniques, Shigam brings international market connections and demand for non-traditional produce to Guyana.

With these anchor firms in place, USAID/GTIS is turning its focus on small farmers, which would supplement export orders. Working under contract with anchor firms would give farmers access to credit, technical assistance, and a guaranteed market.

 

Yet farmers may still be hesitant to explore contractual farming, largely untried in Guyana and requiring unfamiliar technologies. So USAID/GTIS and Shigam are partnering with the Hauraruni Friendly Farmers Society (HFFS) to develop a model farm with five acres of butternut squash and two acres of papaya for export.

For the first year, USAID/GTIS will fund certain startup and running costs, provide an on-site farm supervisor, and create a business plan that details required capital for the initial crop cycle, estimated revenues, and additional capital needed for future crop cycles and farm expansion. The farm will used drip irrigation, greenhouses and fertilizer injectors—demonstrating these advanced technologies for 200 farmers from neighboring communities interested in entering into contract farming with Shigam or Bounty Farm, said the HFFS chairman, Vivian Fredericks.

“We have had several visits already from other farming groups from all over the country who want to be a part of this program and learn from these technologies,” Fredericks said.

Through Shigam Inc., USAID/GTIS will provide technical assistance to HFFS in production and farm management in compliance with GlobalGAP standards. Shigam Inc. will also be under contractual agreement to purchase all export-quality produce from the community.

By working with HFFS as a demonstration community, USAID/GTIS will be able to gauge the effort needed to set up contract farming before implementing it on a larger scale in Guyana and design an appropriate assistance program for future beneficiary farmers. Bounty Farm and Shigam will also learn what will be required of them when contracting farmers through groups like HFFS.

“The Hauraruni demonstration is a very positive way to show how a small community can achieve economic growth through a small push from the USAID/GTIS project,” said Shigam’s CEO, Liran Peretz. “(It) will show that contract farming is a business that can support not only the farmers but also the entire community.”

*Growing export-ready agribusiness in Guyana (October 2009)

Published May 2010