1. Achieving Sustainable Agriculture in SIDs: The Caribbean Experience A Value Chain and Cluster Approach Indera Sagewan-Alli Executive Director Caribbean Centre for Competitiveness UWI

4. Caribbean Agriculture Poor Policy prioritization Dominated by micro farms and small scale processors Declining production (land for food vs housing) Concentrated in production of primary commodities (Plantation legacy) Minimal Value Added (concentrated in developed countries) Low volumes/inconsistency in supply (limitation of small size) Mostly manual with very limited technology Poor yields/poor farm management/crop husbandry Aging farmer class Poor access to credit (linked to land tenure) Subject to the vagaries of nature (no crop insurance) Praedial larceny Mismatch between fiscal incentives and industry needs Institutional silos Limited investment in Research and development (disconnect between industry needs and university research agenda) Increasingly displaced by imported fresh produce from developed countries

5. Value Chain Analysis Looks at every step a business/industry goes through, from raw materials to the eventual end-user. The goal To increase the value-added and value capture

6. Value Chains Transforms resources by the use of Market Intelligence Factor conditions Natural resource endowment Physical infrastructure Policy environment Institutional environment To gain market access (local, regional, international)

7. Market intelligence Factor Conditions Physical Infrastructure Natural Resources Institutional environment Policy Environment Local Commodity/Industry Legal Finance Training Research and Development Market Intelligence The Cluster Global industry Lead Firms/countries Current/ future trends Markets

8. Market intelligence To participate in high value adding chains, parties in the chain should have knowledge of and be willing to comply to demands in the value chain’s end-market Key conditions for producers are access to market information and the ability to translate it to market intelligence.

9. Factor Conditions The nation’s endowment of resources such as physical, human, knowledge, technology and infrastructure. These factors enable or constrain value chain upgrading.

10. Resources and Infrastructure Basic requirements for Value Chain Upgrading: Resources: including natural, input materials, utilities, knowledge, technology and capabilities are conditional for these chains to be successful. The geographic position of a country may impact its competitive position, for example if it is located far from high-value markets Availability of knowledge (production, distribution, and marketing) Presence of an adequate distribution and communication infrastructure

11. Value Chain Analysis Applied Pepper Sauce Industry in Trinidad and Tobago The Cocoa Industry in Trinidad and Tobago

12. Pepper Sauce Industry in Trinidad and Tobago Value Chain

13. Market Intelligence World imports fresh/chilled peppers increasing (4.185 billion USD to 5.017 billion USD 2010-2014 World exports fresh/chilled peppers increasing (4.061 billion USD to 4.797 billion USD) (www.trademap.org)www.trademap.org Growth in “Fiery food” segment of the global market Global Lead firms diversifying hot sauce flavors Best practices use contract farming to ensure reliable supply

14. Factor Conditions in T&T T&T has 3 varieties of peppers ranked amongst the top 10 hottest peppers in the world Wide variety of pepper flavours and additives locally available Cheap energy Fiscal incentives Industrial park conditions

15. Challenges to Growth Decline in fresh pepper production from 1,050 tonnes in 2001, to 350 tonnes in 2012 Limited and high cost production of pepper mash relative to mash imported from Costa Rica and Columbia Absence of contractual arrangements between farmers and processors Lack of coordination amongst stakeholders Labour shortage Weak institutional support (R&D, skills, financing)

16. Growth opportunities Increase production of and variety of hot peppers Increase production of differentiated pepper mash Diversify the final product range to cater for the growing demand in the global “fiery food” market segment Market expansion into non-traditional markets (Latin America)

17. Cocoa National Policy Economic Development Board of Trinidad and Tobago An industry for active revitalization “Our cocoa should be treated in an analogous way to that of Champagne, low volumes, high quality, high price, high profit and having a growing global demand.” “future of the industry should focus on the processing of the beans for high quality chocolates, rather than the sale of the beans as this adds significant value, 10 to 15 times the raw material on the open market. Consideration should be made to partnership with experienced international processors of the beans, to rapidly provide the technical expertise as well as the customer base for exports.” “..Fairtrade should replace the current model which would ensure that cocoa farmers receive the best price for their produce.”

18. Market Intelligence Positive Trends Demand for cocoa increase 30% by 2020 Fine flavor cocoa is 5% to 7% market share but increasing Chocolate $131.7 billion by 2019 Growth in demand for ‘healthier chocolates’ (Dark)now account for 20% of US market Demand Growth for specialty/premium chocolates in high end segment of mature markets in US and Europe Product innovation driver of demand for gourmet chocolates Chocolate prices increasing (45% increase in US market 2013)

19. Market Intelligence Negative Trends Increase in suppliers of Fine Flavor Cocoa as countries aggressively seek certification to secure higher prices. Large Chocolate Producers are capitalizing on the growing demand for “healthier” “fair trade” “single origin” dark Chocolate Country of Origin bean processing dominated by a few MNCs Growth led by the milk chocolate segment, estimated to grow at about 2.4% between 2014 and 2019

20. Monetary Value Chain

21. International Monetary Value Chain Notes: Gourmet 250g baking bar Lindt * Tourism Accommodation the Chocolate Boutique Hotel, UK * The Chocolate Museum, Canada * Chocolate prices based on 100g bar * Chocolate SPA, Hotel Hershey

23. Bean to Bar to Spa An Artisanal Destination Approach:

24. The Real Dilemma Whose responsibility is it to convert Market intelligence into implementation? Government? Farmers? Private Investors? Academia?