From Farm, Fishery & Forest to Market
We are going to look at 3 objectives taking us along the road from Farm to Market.
The objective of farming is to produce components of food, fish and fibre and to sell them profitably. (Fibre encompasses non-food commodities such as cotton and timber.)
Selling profitably is not just the task of the farmer
- Looking at a nation's economy there is a national advantage in adding value to farm products transforming them to other products for export.
- Thus it is important to encourage not only farm production but also the processing of farm produce for both local and international sale.
- A strong local market for locally processed goods is very important for the development of processed goods for export. It provides the financial springboard for the additional effort required to research and penetrate international markets.
Components may be sold in different forms
- In original form to the final consumer - eg carrots
- Packaging is generally simple
- In processed form - eg cheese, chocolate coated almonds, cakes, bread
- Processing generally combines a number of components into a final product.
- Processed products generally are sold in more sophisticated packaging than un-processed components
The objective of food, fish & fibre processing and packaging is to add significant value to such components to make saleable value added products.
Processing may take many forms
Now you may wonder why I am telling you all this obvious sounding stuff ! It sounds pretty simple and you probably know it already ! I read a report entitled "Agricultural Development Management and Operational Strategy (ADMOS) written for Grenada in 2003 which might be fine for those who like "high falutin" documents but I'm pretty sure not many farmers in Grenada have read it. Yes - there is nothing incorrect and it has plenty of ideas but somehow it's hard to 'see the wood from the trees'. I'm going to convey additional ideas and much of the same material to you in a manner that will not cause mental indigestion !
- Transformation and separation
- Milk may be separated into cream and skim-milk. The cream may be processed to butter. Butter may be used as a component of ice-cream.
- Wood may be transformed into building materials, furniture, paper, tools - it has many uses.
- Combination with other components
- A cake has a range of components such as flour ground from wheat/corn, butter from milk, sugar from cane, flavourings from other plants such as peppermint, sultanas (dried grapes), coconut, carraway seeds...
- Chocolate coated almonds have almonds, chocolate made from milk, sugar from cane, cocoa and other additives
- Many items may be cooked and canned - such as pineapple, coconut milk, corned beef, peas, beetroot, fish, other fruit
- Some items may be dehydrated and powdered - such as milk, potato, peas, carrots, onions, soup mixes, fruit juices
- Items may be cooked and bottled - fruit in syrup, jams, marmalades and other preserves
- Meats may be dried and packaged
- Items may be frozen - meats, poultry, iced products, vegetables (blanched) such as corn, cauliflower, peas...
You may have noticed I've spoken of 2 objectives so far and the 3rd is coming up. Following its introduction I'll go through each of these 3 areas of focus again and ask the following questions...
- What makes this aspect profitable ?
- What would enable Grenada to make more money from this aspect ?
- What's holding this aspect back ?
- What would assist in making this aspect leap forward ?
The objective of marketing is to locate markets, make contracts between suppliers and buyers in order to sell products.
- may be as simple as selling to the store down the road
- may involve negotiating a supply contract with a hotel, a food processor, a supermarket...
- may require advertising so that purchasers come to you
- may involve the use of salesmen to scout around within the country and in other countries
- may involve looking to see where there are gaps in other peoples marketing - if they're still using scythes to cut the grass in Russia then marketing lawn-mowers to them might be a good idea !
So - now you have the flavour of what "From Farm to Market" really means - it's a bit more in today's modern world than selling produce at the farm-gate !
Now we're going to take a second pass through these 3 topics asking our 4 questions in relation to each and perhaps a few extras as well.
Producing Food, Fish and Fibre Profitably
Do you know the secret of success on the share-market ? Buy low and sell high !
In business it's the same - one has to buy the components to grow or make a product for less than one is going to receive when one sells the product.
How does one do this ?
So - what makes growing crops or plants or animals profitable ?
- Have a good idea of the selling price before starting - this can require local or foreign price information and it's even better if a contract can be made before starting.
- You do have to have the knowledge of how to grow the item - don't begin without it
- Calculate the cost of growing the item
- Wages to plant, grow and care for
- Cost of Fertilizer and other inputs
- Care costs in relation to weeds, pests and diseases - herbicides, pesticides
- Wages to harvest
- Cost to take to market
- Is your farm big enough to grow enough of this crop to make a living ? This is a very important question.
What would make Grenada more profitable at growing animals and plants ?
- Farming the plants or animals that makes the profit (as calculated above) as large as possible on your land with its soil-type in the weather you typically get.
- Growing larger acreages
- Growing crops in such a way that the production per acre is higher - how would 240,000 lb of tomatoes/acre sound compared to 20,000 lb/acre - know how to do that ?
- Growing crops that are profitable in their particular location
What's holding back an increase in total Agricultural sales and profit in Grenada ?
Why does some land produce less/acre than it could ?
- Land that could be being farmed that is not being farmed
- Land that is producing less/acre than it could be
- Farms which are just too small - making the farmer a part-time farmer
- The most appropriate crop/animal is not being grown
- The farmer does not have the knowledge as to how to get better results than he is
- which may relate to ways of doing things
- the soil type - is there a trace-element deficiency ? Imagine baking a cake without the baking powder - a very small yet vital component - the same can be the case for soils.
- the type of grass he grows or the species of animal or crop that he is growing
- lack of high quality techniques such as artificial insemination to breed better animals now rather than in 10 years time
- a shortage of funds to invest in the better techniques the farmer may know about
- We can't do too much about the weather when it gets destructive but can use knowledge concerning to choose appropriate breeds of animals and plants
What would enable farming in Grenada to make a large step forward ?
Summary - 4 of these answers are educational, one is propaganda and the 6th involves the other 2 - can you figure out which is which and 1 is out on its own ? If 4 is the largest number you are reading here then you may figure that the aspect it relates to is rather important in Grenada taking a large step forward in terms of Agricultural production and profitability.
- A huge target enunciated by politicians - people love to feel that they are doing what is expected of them - for example "Let's raise production to 4 times present levels by increasing it 25% per annum. (Can you calculate how many years that would take ?)
- Bringing more land into agricultural production
- Educating young farmers in modern farming techniques at a tertiary level
- Educating existing farmers in modern farming techniques
- Introducing farming techniques which exist elsewhere but have not hit Grenada yet !
- Promoting partnerships between aspiring farmers and retiring farmers
- Increased roading and communication infrastructure
Now you have the the 4 questions and answers for the first objective.
Next we'll look at the questions in relation to the second objective - "Processing and Packaging"
What makes Processing and Packaging profitable ?
Processing and Packaging is a business of which processing is generally the larger part.
What would enable Grenada to make more money from Processing and Packaging ?
- Processing adds value to components by way of labour, additional profitability and additional marketability.
- As in all businesses costs must be less than the selling price to make processing a profitable activity.
- Packaging when well done is a big plus for a product. When packaging is not 'up with the play' it may make an excellent product a poor seller.
- Processing and Packaging is a big plus for a country as it generates several times the foreign exchange that raw materials will bring alone
- Well known Brand Names are a big assistance in making Packaging profitable.
This is not a task for a government but government can get the message out to the people. Businesses can use micro-finance schemes already in existence. The market will sort out the capable from the not so capable, what is needed and what is not needed. Leadership from the top - statements - targets - such as quadrupling farm production and the export of processed goods in the next X years with an annual growth rate of 25% - can you work out how many years it would take ?.
- Establishing more businesses canning fruit, meat vegetables
- Establishing more businesses making plastic bottles and bags
- Establishing more businesses freezing and freeze-drying foods
- Establishing more businesses drying and preserving fruit
- Establishing more businesses packaging cuts of fresh and frozen meat
- Establishing more businesses making packaging and printing labels
- Establishing businesses to spin cotton, weave fabric, make clothing, make bedroom products
- Establishing businesses to make leathers from animal skins
- Establishing businesses to make leather goods - bags, gloves, hand bags, shoes
- Food processing education at a tertiary level - the methods are generally adopted from chemical engineering
- Education in civil & mechanical engineering and architecture to design the necessary factories, design and select appropriate plant for the processes involved.
- Establishing more factories making furniture and associated foam products
What is holding back the Processing and Packaging Industries in Grenada ?
- Not enough people seeing the need
- People not seeing the money that can be made in the processing and manufacturing world
- Insufficient know-how
- Beliefs that only people in other countries can do particular things
- Lack of experience of the technologies required
- A shortage of employers ?
- An inability to coordinate with farmers and the sellers of goods
What would give Grenada a 'kick-start' in the area of Processing and Packaging ?
There are roles for Government, Farmers, Entrepreneurs and Educators in this process
- Government announcing that it wants Grenada to produce much more in the way of value added goods, particularly for export.
- Farmers producing significantly larger quantities of produce with specific export markets for value added items derived from that produce
- Processors seeking our markets both local and export, deciding to make the product and alerting farmers to the need for the raw material produce
- Independent Marketing scouts and Manufacturers representatives in other countries being requested for information as to new products they could sell
- Raising the minimum wage - whilst businesses always grumble about this in general it turns out to be good for them in the end. Whilst one does not wish to price oneself off the international market strengthening the home market by better wages is also important. People need to be given more efficient methodologies which despite higher wages bring unit costs down
- Education at a Tertiary level in commerce and engineering. Keep those bright people in Grenada and interested in furthering its interests
- The output of creative people in manufacturing methods, product preparation, presentation and marketing
Now we have reached the Marketing section
What makes marketing profitable ?
Marketing can be a business in itself conducted for clients or an integral part of a farming or processing and packaging business.
- Good marketing can add a second layer of value to products. Poor marketing can have the opposite effect.
- Marketing is profitable when the products being marketed sell very well
- Marketing is profitable when it is much more than advertising
- Locating Markets
- Successful negotiation of contracts
- Getting goods to market on time
- Promotion and advertising to assist retailers now that the product exists and is on sale
- Good customer service to back up the marketing promises.
What would enable Grenada to make more money from Marketing ?
The end product of marketing is increased sales at the best possible price.
- The establishment of more marketing firms
- Tertiary education in Commerce specialising in Marketing provides personnel trained in the intricacies of international trade and business
- Education in the use of modern means of communication - print, radio, television, internet, animation
- Enhanced skills in negotiation and selling
- Enhanced advertising and promotion - raising the profile of Grenada and products from Grenada
What's holding the Marketing Aspect back in Grenada
The evidence is that only in the areas of sugar and bananas is Grenada making substantial exports - well beyond the local consumption.
- When there is a little pressure or need perceived for international marketing it does not happen - inertia !
- A lack of people with marketing skills at an international level keeps the process at a low level
What's needed to make Marketing take a leap forward ?
Leadership - the setting of goals
- Politicians need to manage the encouragement of exporting
- Politicians need to encourage the setting of production, processing and exporting targets
- Tertiary education in Commerce is needed to quickly bring suitable people up to world level in terms of marketing skills
Now we've examined the 3 objectives in relation to the 4 questions. Are there other things that should be said ? We haven't used any buzz words such as niche markets, inter-sectoral linkages, product differentiation, socioeconomic issues, globalizing world - did we miss something out ?
Yes - we have not touched on everything - not that those are important words to have omitted ! We've kept the language simple straight-forward and to the point.
To summarize what should have come across to you is that
- Political leadership is needed - the setting of targets and goals
- Production of raw materials needs to expand significantly and be chanelled into processed goods which adds much more value to exports than exporting unprocessed items
- More tertiary education is needed in Commerce, Engineering, Science and Agriculture in order to introduce much needed knowledge already available in the world to Grenadaans to enable them to grow, process and market successfully much more product than at present
- Government does need to provide public infrastructure - such as roading and facilitate the dissemination of useful knowledge
- Diversification of the product range and the range or processed items
There has been no emphasis on
- incentives - the main incentive in business has to be 'making money' and that incentive works very well. Countries which have deleted artificial incentives have become more successful than when they had them - this may sound heretical - but you may have noticed how the runner without a crutch beats the man with the crutch !
- Government starting up and operating businesses - Government needs to need, legislate a business environment that is encouraging, fair and non-bureaucratic
What should the role of Government then be in relation to the Agriculture, Fisheries and Fibre Industries ?
The Government has a Ministry of Agriculture and Fisheries
There is value in that Ministry providing the following (This list is not exhaustive.)
- A price information service (which should be on-line) for both domestic and foreign markets of relevance
- Extension services to farmers - the role of these should be to communicate new and existing knowledge to farmers to assist their production efforts
- Research programs relating to the following to assist farmers to focus the production on the soil type they have and rainfall they receive
- New crop and animal types and their introduction - non traditional animals, new breeds of traditional animal, non traditional crops
- The economics of particular crop and animal types
- The promotion of non-traditional crop methodologies which have much higher yields
- Downside reduction programs to find ways to minimise pest and disease damage to animals and plants
- Demonstration plots
- Border bio-security in conjunction with Immigration and the Ministry of Health to minimise the ingress of pests and diseases
- Internal bio-security programmes with farmers to contain outbreaks of threatening pests and diseases in plants and animals
- Monitoring farmers activities with respect to on-farm wastes
- Ensuring that food is safe for human consumption where it has been subject to pest and disease treatment processes
- Liaising with research organizations to assist in the coordination and knowledge about their research endeavours
Other ways in which Government may assist and provide leadership
- There are Trade Policies for the Ministry of Trade which need to facilitate free and fair trade in an orderly manner.
- Promote Producer Associations and Financing systems of a Credit Union nature
- Promote the use of the methodology of the Management Standard ISO9000:2000 of the International Standard's Organisation
- Promote Tertiary Education in Agriculture, Commerce, Science and Engineering at Diploma and Degree Levels
- Promote Communication between Farming, Processing and Marketing organisations
David L Evans Ph D
7th March 2011