Avia Collinder, Business Writer
First of four agro-clusters put into operation
Whereas Agro-Investment Corpo-ration is still fine-tuning the list of crops to be produced in the four agro parks, it has pinpointed onions for the first push.
The parks are being financed under the European Union-sponsored project for the reform of the sugar sector.
Hershel Brown, CEO of Agro-Invest, said Monday that 530 new acres, approximately 217 hectares, of onions in St Catherine and Clarendon are expected to be reaped in the first quarter of 2013.
Contracts have already been secured for the crop, he said.
The aim is to grow production to produce US$2.5 million (J$227 million) worth of onions in two years. The long-term goal is to replace at least 70 per cent of total production of the US$4 million (J$364 million) of the bulb imported annually.
Brown said the park is expected to produce 6,787 kilogrammes for every 0.4 acre, or one hectare, planted. That yield would add 1,472,779kg to total production.
In the fiscal year ending 2010, the most current data available, Jamaica produced some 721,000kg of onions valued at J$64.46 million. Output was 37 per cent better than the 455,000kg produced in 2008.
Current domestic production is estimated at seven per cent of demand by the Ministry of Agriculture and Fisheries. Traditionally, St Elizabeth produces 85 per cent of the crop.
Now, Agro-Invest has brought together some 60 private-sector partners who have been leased lands at a rate of J$2,000 per acre annually in Park One - the lands are located in Amity Hall, St Catherine and Ebony Park in Clarendon - to grow more onions.
Agro-Invest said production is timed to synchronise with marketing plans, which are well advanced, as well as the recruitment of technical expertise, including an agronomist and an onion specialist.
Brown, wary of affecting the market, declined to state the cost of producing onion in the park, but insisted it was a lucrative business.
"We are talking about a return on investment of 30 per cent, which is quite good for a four-month crop. However, it needs good management. Farming is not simply something you do because you have nothing else to do," he said.
The onion park is expected to employ 250 full-time workers, one for every two acres, and 500 part-time workers, with one part-time worker to be used per acre. Additional workers will be needed for drying processes.
Mechanising yam production
But the government agency is currently contemplating at least one other crop which will see reversal in traditional labour requirements.
"We are currently doing a trial with yams in Ebony Park, funded by the Development Bank of Jamaica. We need to reduce the cost of production and to do so, we have to partially mechanise
our production. It is a trial involving the use of equipment to dig yam hills, which is the one of the most significant costs of production," Brown said.
Other crops being considered which might provide an acceptable return to private-sector partners in the new parks, based on market demand, is a new variety of pineapple, the MD2, sheep-rearing for meat, and sweet potato, which, the Agro-Invest CEO notes, "has extremely good potential if we break into North American market".
Only onions have received the green light, however.
"What we are expecting is to have significant production by end of first quarter of next year. Infrastructure, drains, machines and marketing and technical support are being put in place. The goal is to replace 70 per cent of production, reducing imports to US$1.5 million in two years," he said.
Agro-Invest was formed from the merger of Agricultural Development Corporation and Agricultural Support Services Productive Projects Fund Limited in 2009. It operates as the business facilitation arm of the agriculture ministry and is responsible for investment promotion and facilitation, as well as project and market development.
Brown said the agro-park is conceived as a cluster of related agriculture production and agroprocessing in one location, going as far along the value chain as possible.
"We put the infrastructure in place. The primary producer is an investor. Value-added is done by the private sector. Distribution is by the private sector. All we are doing is providing the platform," he said.
"We have 60 farmers growing onions. We leased them the land. We leased the land at 'peppercorn' rates of J$2,000 per acre. Our interest is the production that will happen."
Training for private sector partners, he said, is key as the tendency in Jamaica is to approach farming as something to be done when there is no other economic option.
Brown is also hoping for trade protection from central government so that local onions will be able to compete with imports. Those talks are ongoing.
"We have to have policy support so that onions cannot be imported when local production is happening," he said.
The total cost for all four agro parks is projected at J$390 million, "largely for infrastructure and equipment".
The three-year project is to end in September 2015 with two agro parks to enter production by 2013 and the other two by 2015.
Brown said the warehousing side of the business is also taking off, with 86 per cent of the storage space at the Agricultural Marketing Corporation (AMC) complex in Kingston already leased.
Two more warehouses are to be built at the complex.
To ensure that the AMC complex becomes Hazard Analysis & Critical Control Points-certified, Agro-Invest has tendered a contract to upgrade the plant.
The project is expected to cost J$71 million and is funded from the same EU-backed project.
"We are retrofitting because of the new market demands coming out of major partners, specifically the US Food and Safety Modernisation Act," Brown said.
The AMC complex, spread across more than 100,000 square feet of space, has facilities for stripping containers, packing houses, chill rooms, warehouses and offices.
"The exporters who use the facilities will need certified facilities in which to operate in order to stay in business," Brown said, while indicating that more than 20 exporters rent space at the AMC complex.
The retrofitting project is expected to begin in November.