Agro processing deserves the robust backing of government

2018 was a year of considerable achievement for the country’s agro processing sector. The most important barometer of its accomplishment, was the significant growth in investment – by mostly small and medium-sized operators, in either the establishment of new enterprises, or the consolidation of existing ones. In passing, it is worth pointing out that what 2018 demonstrated, was that women are the dominant force in the agro processing sector, and that the experience of self-employment appears to have given many of them (mostly relatively young women) a new lease on life. 

On the whole, the sector appeared to settle into a pattern of greater appreciation of the essence of business, not least those considerations that have to do with a sense of entrepreneurship, adherence to food safety standards, product quality and presentation, and a willingness on the part of agro processors to consolidate their product preparation skills and seek out advice and/or formal training in matters to do with running a business. There has been, as well (and this inclination goes back prior to 2018), much more preparedness on the part of small operators to register formal businesses with all that this requires, so that there are now a greater number of agro processing operations that operate within the law.

Support for agro processing has come from government primarily in the form of access to funding, particularly through the Small Business Bureau (SBB). There has, as well, been various forms of technical and logistical support from the private sector, notably the Guyana Manufacturing & Services Association (GMSA), which has been instrumental in the planning and execution of public promotional events targeting mostly emerging agro processors, and the Guyana Office for Investment (GO-Invest), through support for groups of local agro processors undertaking marketing initiatives abroad.

The Guyana Marketing Corporation, through its Guyana Shop, as well as through the staging of occasional ‘street market’ events, has been persistent in providing product promoting support at both the local and external levels. The importance of the Guyana Shop to the promotion of the local agro processing sector was certainly particularly apparent during 2018.

Such support as the agro processing sector benefitted from in 2018 was also due largely to the collaborative public/private sector effort, involving mainly the GMSA and various government departments, including the Ministries of Business and Finance. One makes this point conscious of the fact that public/private sector collaboration/cooperation is not always a runaway success in Guyana.

If, however, the potential of agro processing, both as a provider of employment and as a source of income generation, particularly through breakthroughs on international markets, was  clearly evident during last year, there were, unquestionably, impediments to its forward movement, not least those that have to do with quality assurance standards, production limitations arising out of limited manufacturing capabilities, product presentation restrictions arising mostly out of limited investment in areas such as labeling and packaging and – the current ongoing efforts notwithstanding – underinvestment in regional and extra-regional marketing.

The reasons advanced for these limitations have had to do mostly with considerations like too little investment in production-related equipment and machinery, less than robust support for local agro produce by consumer outlets, a proliferation of foreign brands, intra – regional protectionism and far too little investment in marketing.

These considerations apart, the point should also be made that we have still been unable to develop enough efficient and effective relationships between the agricultural sector and its agro processing sub-sector, the evidence of this being reflected in the concerns being expressed by small and medium-sized agro processors, regarding access to raw materials. Interestingly, the available evidence in this regard would seem to suggest that it is not so much a scarcity of raw material that afflicts the agro processing sector but the scarcity of efficient business relationships between the farmer and the agro processor.

Contextually, it is not as if there is not adequate demand, particularly abroad, for our agro produce. The findings of recent research reported on in this issue of the Stabroek Business, point to a growing increase in global demand for fruit and vegetable juices as part of the global ‘healthy eating’ fixation. Interestingly enough, numbered among the fruits which the study says are in increasing international demand, are mango, pineapple and orange, all fruits cultivated in commercial quantities in Guyana.

The available market intelligence tells us that there are factors (volumes, quality assurance considerations and product presentation are among these) that place restrictions on market access, the global market for agro produce being still very much under the control of mostly Asian exporters. That is not to say, however, that there does not exist meaningful alternative market opportunities for the local agro processing sector. Regionally, there is the market arising out of the tourist industry, bearing in mind that concerns continue to be expressed at the level of CARICOM over the high cost of extra-regional food imports to sustain the tourism industry. There is also the need to do more to explore hemispheric niche markets, particularly in Caribbean diaspora communities, particularly in North America and to a lesser extent in Europe.

None of this, of course, is new. The potential for enhancing the viability of the agro processing sector continues to be discussed without there being any energetic follow-up. If there has been, in recent years, evidence of enhanced public/private sector collaboration in support of the agro processing sector, those initiatives have clearly not taken us even remotely as far as we need to go to energize the sector and to make it a more meaningful contributor to the Guyana economy. Interestingly, right here in CARICOM, there is the example of Jamaica, which has excelled in the marketing of locally manufactured food products, including agro produce, abroad. All of this would have come about through public/private sector cooperation with government playing the role of facilitator, creating an enabling environment in which the country’s exports can thrive by investing directly in external marketing initiatives, aimed at raising international awareness of the country and what it has to offer.

One of the more compelling arguments for resisting the temptation to set aside agriculture once an ‘oil economy’ begins to take shape, reposes in the tremendous transformative potential of agro processing. So that while 2018 certainly offered a lot to be pleased about, the sector still has a considerable road to travel if it is to deliver on its potential. And there should be no doubt that further meaningful advancement of the sector will require a meaningful collective effort that embraces the energy and dynamism of the agro processors themselves, that various forms of support from Business Support Organizations (BSOs) like the GMSA and the wholehearted backing of government. 

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