It has become distressingly obvious, as the 2020 oil production deadline draws inexorably closer, that the current administration has placed agriculture squarely on the back burner. This assumption can be easily made as there have been no significant positive developments in the agricultural sector driven either by government policy or by government intervention to date. Indeed, with the dramatically shrinking sugar industry and the varied challenges to the rice industry, the agriculture sector is in dire need of direction, focus and substantial investment.
Instead, we have been subjected only to occasional sound bites from the Minister of Agriculture, the most recent being the announcement that the government and Demerara Distillers Ltd. (DDL) are to “explore” the possibility of establishing a partnership in the dairy industry based on the public-private partnership investment model, according to a joint release. According to Minister Noel Holder, who was once Managing Director of the Livestock Development Company (LIDCO), the country’s annual import bill for milk products is US$25M, positing that a viable milk production enterprise locally can benefit the country through job creation and import substitution.
While on the surface this seems rational, it is unclear whether any kind of investment assessment or analysis was undertaken, or whether any awareness exists at the moment as to the size of the investment required and whether the issues of risks and sustainability were considered even at the most basic level. For its part DDL has expressed its willingness to work with the government and advance the discussions on the potential milk production enterprise in the context of its diversification plans.
It remains to be seen whether or not this milk production public-private partnership, between the government and DDL, will bear fruit, and only time will tell. It will also be interesting to see the actual form that the intended public-private partnership will take. Dairy farming and milk processing are capital intensive investments and the production and packaging of powdered milk speak to the level of technological sophistication required. One thing seems clear about the dairy farm and milk industry: it cannot be built up overnight. It is a long and arduous task to get to the point of sustainability of production of milk from the cows to ensuring that the processing plants have a sufficient supply of milk to make large scale processing a cost-effective operation.
It was reported in 2017, just over a year ago, that Sterling Products Ltd. had applied to the government for 10,000 acres of land for coconut production as part of its own stated diversification and expansion plans in its agro-processing business. To date there has been no sign that any approval has been given or that the company has commenced this project.
In February 2018, the Caribbean Agriculture Research Development Institute (CARDI) announced it was finalising plans for a multi-million US dollar investment in an agriculture production and processing project at Ebini in Region 10. This project was facilitated by government granting 5,000 acres of land to CARDI which had requested 15,000 acres in 2015 to grow corn and rice which is to be processed into livestock feed. Government has not commented on this project but CARDI officials said that the government drove a hard bargain with the land allocation, adding that, “The bureaucracy involved in the distribution and allocation of the land has contributed to some delays.”
In March 2018, a team of investors met with Minister Holder signalling their interest in bringing 100,000 hectares of land under oil palm cultivation, by way of a phased implementation. “Region 6 is the likely area of interest for our project which will include the establishment of an Oil Mill and Refinery as well as downstream processing facilities. Director of the company, Agro Atlantic (Guyana) Inc., Bruce Jupiter explained that, “As this will be the first of its operations in Guyana, a lot of preliminary work including soil feasibility study, rainfall records, soil analysis and investigations, topographic structure, social-economic impact, environmental impact assessment and others are also needed.”
The point being made here is that there has been no shortage of interest in large scale investments in the agriculture sector both by local and overseas entities. However, there has been little movement forward on these and other projects. In his end of year report, CEO of the Guyana Office for Investment (Go-Invest), Owen Verwey noted that his agency processed 120 Investment Agreements and Land Applications during 2017 covering nine sectors. Of the nine sectors, however, the agriculture sector had the largest number of applications processed, pointing to the latent potential that the sector possesses.
We have bemoaned the absence of a clearly enunciated agricultural policy emanating from the Ministry of Agriculture several times in these columns, and the point is well made here again. Potential investors need to know the strategy of the government and its plans for a particular sector in order to be able to make an informed decision to channel productive resources and their investment dollar in the right direction. Potential investors also need to see signs of supporting physical infrastructure being put in place to facilitate the desired investments that the agriculture policy has clearly defined.
The policy document should also clearly outline the various types of investment models that the government is willing to pursue or encourage in order to achieve the strengthening of physical infrastructure such as roads, irrigation and drainage, the introduction of modern technology and systems, the promotion of large and medium scale farming, agro-processing, and the list goes on and on. It is necessary that the investment model is appropriate for the investment purpose.
Many fledgling crop farming and agro-processing businesses are still being created on an entrepreneurial level, but strategic and tangible government support to grow the agriculture sector and the agro-processing component remains lacking. At the same time, many large scale entities are knocking on the door but without receiving a clear invitation to enter.
If after three years the Ministry of Agriculture is yet unable to articulate a clear policy and strategy for the sector to attract and advise potential investors, farmers and entrepreneurs, then maybe the onus should fall on Go-Invest, as an investment facilitating agency, to publicise its own approach to the agriculture sector.
