www.fao.org/sids The presentation will be made in the context of the Regional Preparatory Meeting for the Caribbean towards the Third International Conference on SIDS 2014. FAO is hosting a special event: "Addressing major threats for improved livelihoods and sustainable development in the Caribbean SIDS"

1. Strengthening Supply Chains through
Value Additions and Enterprise
Development
Agriculture, Fisheries & Related Sectors
Ranjit H Singh

2. Why the Need to Strengthen Supply Chains in
Agriculture, Fisheries & Related Industries in the
Caribbean?
• The performance of the small farmers , fisherfolks & many
SMEs in agriculture have not improved significantly over the
years
• With globalization the position of small producers in the
region appears to have worsened:
oDeclining incomes
oNegative impact on livelihoods
• Climate change impacts would further
increase the vulnerability of this group

3. Performance experience of agriculture in the
region and more specifically that of the small
producer?
• Yes, we have had growth and development in some subsectors/
industries: e.g. rice, sugar, cocoa, coffee ,citrus, poultry
• Yes, we have had growth and development of larger
agribusiness such as processors , marketeers
• However small producers, fisherfolks and SMEs
have generally failed to fully capture
the potential business benefits. Why?

4. How could Value Addition
& Enterprise Development Help ?
• Value Addition: helps to enhance income of the producer by
capturing additional returns through product or service
enhancement – requires innovation on the part of the producer
• Enterprise Development: refers to growing the enterprise with
respect to key performance indicators:
• Profitability
• GROWTH of ASSET BASE
• Competitiveness
How could small producers
grow their businesses ?

6. Strengthening Supply Chains through Contract
Farming – Weaknesses of Types of Arrangements in
the Caribbean
Benefits
• the relationship typically includes a CONTRACT to supply
produce to the processor in fixed quantities and possibly grades
at pre-established prices
• In return, processors may provide technology and inputs eg
broiler
• Supplies guaranteed in some cases
(sugar, rice, citrus, banana)
• Attractive returns to processor

7. Strengthening Supply Chains through Contract
Farming – Weaknesses of Types of Arrangements in
the Caribbean
Deficiencies
• No sharing of rewards or risk , producer faces all prod’n risks
• No sharing of information –asymmetry of information
• No transparency
• Producer typically is a price taker (where price paid is the residual
after all costs, profits and return to capital) to the processor
• No involvement in decisions on the Supply Chain operations
on part of the producers
• Tendency for mutual mistrust
• Fresh Produce suppliers may divert supplies to
the fresh market when more attractive prices
are offered

8. What Transformative Actions are required to
Improve Livelihoods?
• BUILDING INCLUSIVE BUSINESS PARTNERSHIPS along the supply
chain to BUILD COMMITMENT & TRUST
• HOW?
o Small producer & SME shares in the returns & risks of the partnership
o Power -Have a say in the business of the partnership
o Transparency – information on the business is shared
o Better access to finance (business partners provide leverage and guarantee)
o Partner may provide technology and training
o Enhanced market power
o Larger capital base collectively among partners
& capacity to fund innovation
EXAMPLES?

9. Policy Options for the Caribbean
Improving Livelihoods
1. Establishing policies conducive to strengthening the
supply chain and a focus on Agro-Industry development
including
A shift in current policy:
From a policy focus that is small producer/farmer centred to
agro-business cluster involving supply chain
partners, including large produces and all
value added operators along the supply chain

10. Policy Options for the Caribbean
Improving Livelihoods
2. Sensitization of farmers and SMEs in agriculture on IBMs:
o What are IBMs ?
o Benefits -possibilities for improving profits & growth
o How they work
o Critical success factors
3. Government acting as a third party facilitator to:
o Organize the industry into supply chain business clusters
o Facilitate the formation of IBMs in key clusters
o Becoming an small owner /equity holder
where desirable
o As a guarantor of small farmer & SMEs
business risks
o Provision of Business support services
(including capacity building)

11. Challenges to Building Business partnership in
Agriculture & Fisheries in the Caribbean
• A culture of independence: small produces & SMEs
• Lack of trust between producers and business entities along the
value chain
• Reluctance to share business information
• Generally poor experience /negative image of Cooperatives
throughout the Caribbean
• Limited experience with government involvement
as joint venture partners in agriculture
with small scale operators & SMEs
• Fear of political interference.

12. Thank You