HIGH PRODUCTION costs continue to undermine the price competitiveness of local agricultural produce on the international market, a point Orville Palmer, general manager of Grace Agro Processors Division, shared with contract farmers recently.
He told them: "The international demand for pepper is very high. The challenge that we have is the cost of production (because) what we pay for pepper is what pepper mash is being sold for on the international market. As a matter of fact, less than that; so the challenge that we have is to increase our productivity."
Palmer was addressing the signing ceremony at GraceKennedy's Harbour Street, Kingston, office, where 10 farmers from St Elizabeth, St Ann and St Mary had come to sign two contracts to provide pepper for the company's pepper mash facility in Hounslow, St Elizabeth. The pepper mash is the main ingredient in the Grace line of hot pepper sauces, sold across the world.
"We have to increase our yields so we can get the cost of the pepper down, so we can trade internationally," Palmer appealed to the farmers.
Partnership the key
Meanwhile, Michael Ranglin, chief executive officer of Grace GK Foods, reiterated the importance of partnership in achieving this objective.
He explained: "We don't know how to grow peppers. We know how to market the product from peppers. We know how to process it and market it all over the island and in various countries in the world but we need your expertise to grow good quality peppers.
"We are getting good-quality peppers, but what we have to work on now with you is the price. It is very important that we work together to produce a product that is competitively priced," added Ranglin.
While the company has in the past contracted farmers to produce raw material for its extensive line of food produce, this project differs somewhat. The farmers are obligated to get their operations up and running, and after the first month through to the fourth month, the company will provide inputs, such as fertiliser and chemicals, distributed by AgroGrace, at discount prices.
At the end of harvesting, this cost will be deducted from the total paid to farmers for pepper during the cultivation period.
Grace will also provide technical assistance to the farmers, with the Ministry of Agriculture and Fisheries also partnering in training of the farmers in best practices.