Agro-park mess

Mismanagement leaves farmers in deep debt

BY INGRID BROWN Associate editor — special assignment

Monday, January 06, 2014    

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MISMANAGEMENT by the Agro Invest Corporation (AIC) has resulted in the loss of a projected $50 million worth of onions at the Plantain Garden River (PGR) Agro-Park in St Thomas, which is among those touted to produce Jamaica out of debt under the International Monetary Fund (IMF) agreement.

AIC is Government's project management and execution agency responsible for certain deliverables in all agro-parks across the island.

Further, the more than 40 farmers involved in the onion project at PGR are on the brink of throwing in the towel after a raw deal left them each owing $300,000 in loans to the St Thomas Co-operative Credit Union, despite AIC being responsible for the loss of the crop.

The Jamaica Observer obtained a copy of a status investigative report compiled by the Rural Agricultural Development Agency (RADA) which confirmed the farmers' claims that they were misled by AIC, which failed to provide the irrigation system in a timely manner despite $100,000 of the $300,000 loan being allocated for it.

The farmers told the Observer that they objected to an overhead irrigation system as they didn't believe this was suitable for crops, given the soil type, but their concern was ignored.

However, the status report made it clear that overhead irrigation should have been avoided.

"Fields at PGR are irrigated using sprinkler system; this will only assist in spreading the disease," the report confirmed.

"Decision by the project management to plant onion seeds prior to the installation of in-field irrigation impacted significantly germination rates and proper development of plants," the report stated.

The report further stated that "pre-emergent herbicides were applied under less than ideal conditions against the advice of stakeholder agencies, rendering it largely ineffective".

One fertiliser application was said to have been made where three would have been required. And although project management committed to making small tools and equipment critical to onion crop production available, none was delivered to the farmers.

"As early as June 2013, approximately three weeks after planting, RADA made recommendations that included the re-planting of poorly germinated plots after in-field irrigation of plots were completed. Crop was affected by slow response to pest pressure, because equipment and agricultural chemicals that were to be in place by the Agro-Park project management was absent.

"Momentum of farmer engagement into intensive onion production and trust of the management of the project might be compromised," the report said.

It noted further that farmers at PGR will realise significant losses in production and, by extension, revenue.

"All the farmers benefited from loans through the Credit Union Inter-American Development Bank facility and as such will end up owing significant sums without the means to repay," the report stated.

"In order to qualify for the credit union loans, each farmer was required to provide $30,000 as surety and this has been frozen until they can afford to repay what is owed.

"It is so unfair, because we trusted in this project because of how it was sold to us, and many farmers had to sell what they owned and others borrowed what they could to come up with the $30,000. And to think that after months of bending our backs in the onion [field], not one cent has come into our hands and we have nothing to show for it," one very despondent farmer told the Observer.

The farmers explained that the idea of the agro-park which was sold to them is that each farmer would reap an average 25,000 pounds of onions on the lower end and a maximum of 40,000 pounds. The minimum production, they were assured, would not be less than 10,000 pounds in a worst-case scenario. They were informed that they would receive $50 per pound for the onion and this would be enough to service their loan and turn a profit.

But, according to the farmers, they were only able to recoup $800,000 worth of the onions, and that was paid directly to the credit union to service the loan.

"Some farmers get hit so bad that only nine or 10 farmers got a little onion to sell amounting to $800,000 and so we all agreed to the freezing of that money so it could service the interest of all of us," another farmer explained.

Farmers who spoke with the Observer said the Government allocated $6 million in recovery assistance following their loss, but they are yet to see a cent of that money as it, too, is being handled by the St Thomas Co-operative Credit Union.

"That money went to the credit union from October (2013) and dem delay it when it could have helped us to put in a fall crop of onion to see if we could make a bit of money," one farmer said.

According to another farmer, the recovery money was to have been used to put other cash crops in place for the farmers to offset some of the loss, however, it was only in the past few weeks that the credit union stepped in to assist with pepper production.

"We approached a pepper nursery and asked for a loan on the seeds and we would pay on the back end when the crops come in. But when the credit union realise we had engaged him they went in and engaged him, paying the money for the seeds, because they don't want us to sell to private individuals but want us to sell through them so they can collect the money to service the loan," he said, adding that in such a case they will never see a cent for their labour.

The farmers further explained that 25 acres of pepper and two acres of calaloo should be planted through the recovery assistance funds. But they argued that each farmer could only earn a projected $9,000 each from the calaloo and that, too, will go to the loan, while each of the 40 farmers would only benefit from six square of the pepper.

"So that mean we will only act as a donkey to service the loan and go through another entire year without getting a dime," he insisted.

The farmers also accused the credit union of using that money to fund a similar project in Yallahs, which the Observer learnt is also being threatened with similar challenges.

"The credit union use we and our suffering to engage Government for the recovery funds, and they insist that it must go to them and yet they don't matter about us," a farmer charged.

"Now some farmers owe supermarket bills and some families have even broken up over this because it is back-to- school and they have nothing to take home. We even suggested that they give us a $25,000 in our hand to take home for Christmas and not even that we didn't get," said the farmer.

According to RADA, the rationale for the investigation was that the general manager of the St Thomas Co-operative Credit Union was concerned that the farmers were not doing well in onion production, contrary to what he was told.

"Based on utterances of the farmers and the failure of certain deliverables from the AIC he believed that the credit union might be at risk of losing millions of dollars that the institution loaned to farmers," the report stated, adding that the loan, which was disbursed by the St Thomas Co-operative Credit Union, was from monies loaned to the union by the Inter-American Development Bank. This working capital was slated to cover land preparation; all production inputs; on-farm irrigation and equipment/tractor services, and security.

The report noted further that there is a strong possibility that this might reach the media and hard questions could be asked of AIC and the political directorate.

"This might cause a pause in the project in order for it to be optimised, leading to a delay in the up-scaling of the onion acreage targeted by the GOJ, possibly impacting external arrangements such as with the IMF," the report said.

"Ministry of Agriculture must be proactive and start to control expectations before unfavourable news reaches to the media. Through news outlets -- print, audio, and electronic -- get this mid-term assessment out, making sure to emphasise that the effort was the pilot phase (40 acres versus 700-plus acres that are targeted for onion production) of production and as is expected there are parts of the operations that went well, and also mention as "opportunities for improvement" to discuss the adjustments that have to be made that will perfect the production of onions going forward ASAP," the report added.

The farmers said they have the country at heart, hence their delay in bringing their plight to the public's attention.

"Why we never spoke up about this before is because we didn't want it to affect the IMF deal. But people are getting frustrated because the recovery which should have been in from September don't happen as yet, and we don't have nothing to sell," said one farmer.

"In one of the farming groups, not even three per cent of the farmers are over 40 years old; the majority of them are young people who, in their enthusiasm, went out and borrowed money or sell a TV or a phone — anything to get the $30,000 to secure the loan," the farmer said.





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