By Raymond Trotz
Introduction
With the advent of oil, talk of diversifying our economy has intensified with particular emphasis on its agricultural base. Coconuts in particular have received much attention with awareness intensified through the 2016 Festival.
A major outcome of that event was a Guyana Coconut Industry Development Road Map compiled through the joint efforts of the International Trade Centre (ITC) and a broad-based National Stakeholders Platform (NSP). The NSP was established in May-June 2015 by the ITC and the Caribbean Agricultural Research and Development Institute (CARDI) after intensive brainstorming by some 50 stakeholders drawn from the private and public sectors. This exercise – carried out in nine Caribbean territories – initiated Phase 1 of a 4-year project titled “Coconut Industry Development for the Caribbean (CIDC)”.
The work reviewed the current status of Guyana’s coconut sector, placing it in context of the global and Caribbean coconut value chains. It addressed key issues affecting productivity and production of coconuts, considered potential products for markets, and identified six strategic objectives that could enhance competitiveness of the sector through development of higher-valued products. These objectives were:
1. Development of a business plan for the sector with profitability studies to support commercially driven development and value addition;
2. Consolidation of a sector demand and supply plan;
3. Improvement of access to finance and promotion of innovative schemes that respond to the needs of the sector;
4. Improvement of research for availability and multiplication of right varieties for planting;
5. Promotion of better farming practices and
extension services to increase productivity and improve pest and disease management;
6. Improvement of coconut supplies through an industry alliance among value-chain stakeholders in organisation, planning, information flows, and policy support.
These objectives were created to actualise a vision that would transform the sector from “severe underdevelopment to a fully integrated economic partner at national, regional and global levels.” A visionary target for 2026 was set for the industry to contribute 6 per cent to GDP with 100,000 acres cultivation and trees more than 5 years old yielding an average of more than 6,000 nuts per acre. With a short term of 2 to 5 years, the vision includes rehabilitation and expansion of infrastructural works and production, as well as organisation of stakeholders into a coherent base for a sound diversified agricultural economy. The informal National Stakeholders Platform would be developed into a Coconut Industry Development Board responsible for all aspects of its value chain development.
In the medium term of 5 to 10 years, the aim is to consolidate investment in specific product segments such as coconut water, oleo-chemicals, foods and coir, through stabilised value chains for a range of products, so that in the long term Guyana should be leading the coconut industries of the rest of the Caribbean into developing a Caribbean Association of Coconut Industry Stakeholders with strongly defined links to similar associations in the Western and Eastern hemispheres, playing a key role in developing a World Coconut Industry that demonstrates economic and social transformation through agricultural investments.
Progress and Constraints
Achievement of these objectives is heavily dependent on the principle of forming Alliances for Action (A4A), a coherence of efforts involving both private and public sector parties in meeting challenges faced in executing the Guyana Roadmap.
The first three years of the CIDC project focussed on a Baseline Survey and Characterization Study of Coconut Farmers which led to an effort at organising the Production Base of Guyana’s Coconut Value Chain through establishment of Lead Farmers for training in a variety of areas with an anticipated ripple effect for disseminating knowledge. Training touched on areas of production, processing, and marketing and included:
● Lean management of processing operations
● Coconut development: husbandry practices, seed nut selection & multiplication
● Integrated pest management
● Marketing
● Business development
● Packaging of coconut water
● Value addition and food safety
Over 200 farmers and agro-SMEs were trained with inputs and support from CARDI, National Agricultural Research and Extension institute (NAREI), Guyana Marketing Corporation (GMC), Institute of Private Enterprise Development (IPED), Guyana School of Agriculture (GSA), and private consultants.
Intercropping coconuts with both cash and orchard crops was supported and introduced for economic and climate risk mitigation. Each of these efforts signify lines of action that need to be intensified and developed to achieve greater impact. An evaluation of the project’s first phase in Guyana revealed areas of both strengths and weaknesses in A4A’s efforts to develop the industry.
From a list of 26 farmers, for instance, 12 were selected ranging in age from 22 to 60 years. Each Lead Farmer was required to select topics that resulted in the list above and were expected to:
● Inspire at least 10 associate farmers to adopt new or better farming practices;
● Create a ripple or multiplier effect that would stabilise production through better practices;
● Become models for adoption of new practices or dissemination of knowledge
Expectations were based on underlying assumptions such as:
● Support institutions equipped to generate and facilitate adoption of practices;
● Credit institutions designed to enable agricultural development;
● Policies that would support and empower agricultural development;
Main deficiencies revealed during the evaluation included:
1. Issues of land tenure
2. Conditionalities attached to accessing credit
3. Policy issues
Absorptive Capacity
These have constrained the absorptive capacity of beneficiaries’ ability to implement knowledge from training. In terms of land tenure, for instance, improvements in production and income are usually tied to issues of size, type of tenure, and collateral value. With size varying from 8 to 700 acres among the lead farmers, 33% have issues with land tenure, all of whom are among 75 per cent who have challenges meeting the conditionality required to access capital from credit institutions. The two main inhibiting factors are the high cost of credit and inability to offer fixed collateral, which is usually taken as land.
Even so, it is worth noting that collectively the group invested a total of $687,254,000 over the 4-year period in review, ranging from a smallholder’s $295,000 to a large estate owner’s claim of investing US$3 million in developing an entire value chain. Outside of these is the Precision Group’s investment of about US$11 million in a virgin coconut oil factory requiring a minimum of 40,000 dry nuts per day for economic sustainability. This operation runs the risk of fragmentation of supplies from smallholders who also sell to export traders offering a competitive price. Figures from GMC indicate a peak in this trade of just over 11 metric tonnes (MT) in 2014, with an average of about 8MT/year thereafter up to 2018. The CIDC project has identified this fragmentation as a major obstacle to development of Guyana’s industry and has sought to address it by targeting small holder development, but policy issues are an overriding factor affecting performance and absorptive capacity of what the project has to offer. Some critical areas that need to be addressed include:
1) Financing of individual small holder business plans
2) Allowing a grace period of 3 years for growth of small holder businesses before enforcing tax regulations
3) Establishing central processing facilities as models for standardised production and training
4) Infrastructural development of lands
5) Designing credit schemes based on risk manage
ment rather than risk aversion
6) Instituting an effective grant scheme based on merit
Addressing the Issues
It is in this context that a core of producers and processors have sought to form the Guyana Coconut Industry Developers Cooperative Society Limited (GCIDCO). A special Concept Note was formulated to accommodate the needs and concerns of diverse members of the NSP before the application was submitted and processed. Membership is open to the whole country thus extending the sphere of the project’s 3 pilot zones (in Regions 2, 4/5, and 10). The organisation is now awaiting final approval of its Rules before expanding membership and will be open to enterprises engaged in Guyana’s coconut value chain. Its specific objectives include the strategic objectives listed in the GUYANA COCONUT ROADMAP.
Initiatives taken by GCIDCO so far include:
● Engagement with Precision to assist in meeting its daily demand
● Working on Coconut Waste Management in collaboration with CARDI and NAREI – converting residues from Coconut Water and Oil enterprises into value-added products such as green fibre and bio char for soil amelioration and possibly air and water filtration. [Economic feasibility of scaling these up to industrial levels depend on finding alternative energy solutions]
● Collaborating with the University of Guyana’s Research, Innovation, and Enterprise Endowment Committee to work in three areas with Coconuts, namely: Waste Management; Agronomy and Plant Propagation technologies; and Food Product Development
Other areas of challenge that require a wider collaborative effort include:
● Extensive plant propagation to meet increasing demands beyond the capacity of current nursery production thus requiring commercial tissue culture production of seedlings. [With about 30,000 new acres projected for investments on the Coastal Belt this would require an estimated 2,000,000 seedlings to be ready at a faster rate of production]
● Reduction of the cost of production of both dry and green nuts to supply increasing markets, including the 40,000 dry nuts per day required by the Precision Group’s factory at Marudi on the Linden/Soesdyke Highway
● Generation of biofuels to reduce the cost of industrialising value-added productions from coconut residues
It is in this context that initiatives like the recent forum on Diversification, Capacity Building and Food Security – reported in the Kaieteur News of February 22, 2020 – are welcome.
The author is a member of the National Stakeholders’ Platform (NSP).
