2010 Agland Investment Services Newsletter
Dear Clients and Friends,
Time does fly when you are having fun. We have been busy in Africa and the Middle East, as well as many places in between, and we have not been a good correspondent. We will try to correct this situation with brief description of current projects and a look into the future.
Cape Verde: Irrigation and Post-Harvest Activities
Agland is the prime contractor for a Millennium Challenge Corporation (MCC) project in Cape Verde, 300 miles off the coast of West Africa. The project is a mixture of infrastructure development and training. The Agland team is working with farmers and micro-credit institutions to install drip irrigation so that farmers can sell high-value, high-quality produce to the growing tourist and consumer markets. Agland is also designing and installing post-harvest centers with packing, grading, and cold storage facilities for the Cape Verdean economy.
Agland is developing training materials for farmers and extension agents for the management of drip irrigation and post-harvest facilities, and developing high value agricultural opportunities in the marketplace in Cape Verde. Logistics and distribution of perishables are always a challenge in a multi-island country.
A Cape Verdean farmer checks produce temperature during a shade vs. sun trial on the dock in Santo Antão, Cape Verde.
Iraq: INMA Agribusiness Program
Agland has continued its work with the Louis Berger Group, Inc. to implement the INMA Agribusiness Program. INMA, which means "growth" in Arabic, is working with the Iraqi farmers and the Government of Iraq to support the development of agribusinesses and agricultural markets. The project is helping to build meaningful linkages between farmers, agribusinesses, financial services, and domestic and international markets. Agland has provided a wide range of long-term and part-time consultants to the project.
We have several consultants working on the development of both sustainable annual and perennial horticultural crops such as strawberries, tomatoes, forage crops, dates, tree fruit, and other specialty crops. Establishing water user associations and improving irrigation have been key parts of the project, as well as improving post-harvest handling of crops and establishing urban markets for crops. No one said it would be easy, but we have made progress.
In January 2009, Agland initiated a trial shipment of new varieties of tree fruit and table grape varieties to Iraq. It was so successful that the project was expanded this year. In January of 2010, Agland selected new tree fruit and table grape varieties, loaded a Boeing 747 with the improved nursery stock, and sent it to Iraq (see photo). For those of you who are curious, a 747 holds 110,000 young trees and vines! Genetic improvements in trees and vines had lagged about 50 years in Iraq, and new varieties were welcomed. It is anticipated that the new varieties of trees and vines, including pomegranates, stone fruit (apricots, nectarines, peaches), and table grapes will produce twice as much fruit as common Iraqi varieties.
Agland then tackled strawberry production and recently trained a group of Iraqi farmers to grow and market strawberries, using strawberry varieties imported from Turkey. Demonstration sites were cultivated and used to teach improved technologies that will advance the harvest season and widen the market window. One Iraqi farmer on less than 1 acre produced a spring strawberry crop that generated over $40,000 in gross income!
Arrival of 110,000 trees and vines on a Boeing 747 at Baghdad International Airport on January 18, 2010.
|Above Left: Trees and Vines are distributed throughout Iraq.
Above Right: Stone fruit trees shipped from California are planted in Southern Iraq.
Hawaii: Kamehameha Schools Strategic Agricultural Plan
Closer to home, and under easier conditions than Iraq, Kamehameha Schools Foundation (KS) asked Agland to assist in preparing a long-term strategy for utilization of a wide range of agricultural lands owned by KS. KS is a private college-preparatory institution with a significant endowment…and it is the largest private landowner in the state of Hawaii! The decline of the sugar and pineapple industries in Hawaii has resulted in the fallowing of good agricultural land. Thus, KS was looking to re-evaluate the use of its agricultural lands. Agland consultants conducted an overview of the Hawaiian agricultural sector and made recommendations on specific crops/industries with a high potential for growth. In an effort to broadly cover various facets of agricultural value chains relevant to KS and Hawaii, Agland selected eight "marker crops" for value chain analysis: avocado, banana, tomato, taro, beef, dairy, aquaculture, and forestry. The end result was the development of a 20-year strategic plan that will position KS as an agricultural leader in Hawaii for decades to come.
Agribusiness Development in Egypt, Algeria, and Morocco
Agland was recently selected by the U.S. Trade and Development Agency (USTDA) to travel to Egypt, Algeria, and Morocco to evaluate potential food and agricultural projects that will be of interest to U.S. equipment and services suppliers. Agland consultants conducted interviews with various organizations to evaluate the viability of potential projects and assess the mutual economic benefit for the host country and the United States, including the opportunities for commercial cooperation and export linkages with U.S. firms. Based on Agland's evaluations, integrated livestock production and processing projects potentially worth over $200 million were identified.
Moldova: Central Irrigation System Modernization
Agland reviewed, for the Millennium Challenge Corporation (MCC), an irrigation modernization project in Moldova. In an effort to improve agricultural productivity and raise rural incomes in Moldova, the project focused on increasing rural farmers' access to water. Specifically, the project consisted of a feasibility study, coupled with environmental and social impact assessments of the Moldova Central Irrigation System. Agland consultants were responsible for an assessment of Moldovan irrigation sector institutions, including the centralized water agency and water user organizations; an assessment of operation and management (O&M) costs of both the centralized system and water user associations; and a financial analysis of both the old centralized and a new decentralized irrigation systems. MCC recently approved the project and implementation is in process.
Chile: CORFO Competitiveness and Agricultural Sustainability
The Chilean Economic Development Agency (CORFO) asked Agland and Dalberg Associates to provide leadership in a new program to increase the competitiveness of the deciduous fruit and berry, wine, and natural meat industries (all key export agribusiness industries in Chile). Agland provided three senior consultants, each with over 25 years experience in these industries, to help develop and guide the clusters. Agland consultants were responsible for developing a competitiveness strategy for each sector for regions in Southern Chile. Agland also provided advice on benchmarking, undertook field research, and wrote a set of conclusions concerning each sector.
LOOKING TO THE FUTURE
It is noted that much of the current economic development discussion revolves around programs that utilize the resources of governments and the private sector in what are often termed public-private partnerships. We are currently working on two projects in this important category?one in Brazil and the other in Peru.
Brazil: Second Minas Gerais Partnership (SWAP) Project
As you have probably read, Brazil has extraordinary agriculture and human resources that make it a powerhouse in the global food system. Agland was recently selected to complete a three-part export development project for the World Bank-sponsored SWAP Project in Minas Gerais, Brazil. The project involves market research and trade promotion activities for tropical fruits and vegetables from the Jaíba Irrigation Project in northern Minas Gerais, a logistic study for exporting perishables and non-perishables products, and elaboration of the guidelines for the construction of one or more perishable air export or seaport centers.
Brazil & Minas Gerais exhibit at the International Fruit Logistica Show, Berlin, February 3-5, 2010
Peru Green Energy Corporation
The Northeast coastal region of Peru provides a unique and very productive environment for the year-round production of irrigated sugar cane, as well as other crops. The utilization of sugar cane for both sugar production as well as energy (ethanol) in recent years has focused increased attention on the area to both expand and modernize the sugar and energy sectors.
Investment in the region is increasing. In 2009, a large investment in new sugar plantations and processing facilities was made by Maple Ethanol, a sister company of Texas-based Maple Gas. The Romero Group, Peru's second largest corporate group, is investing in a similar project.
Agland, along with a local Peruvian partner, identified an opportunity to acquire up to four distressed sugar production and processing companies in order to create a world class sugar and biofuel production company. Investment requirements are estimated at roughly $50 million for the initial acquisitions to provide immediate control over roughly 2.6 million MT of cane per year on 10,000 hectares. Annual production under the project would increase to over 6.7 million MT on 30,000 hectares. Projected yields are 165-170 MT/Ha/Year, among the highest in the world.
The project is enhanced by some of the highest sugar yields in the world, high world sugar prices and the Free Trade Agreement between Peru and the U.S. that allows ethanol or other biofuels duty free access into U.S. markets. The project would greatly enhance the incomes of small farmers in the area and replace old equipment with modern processing equipment.
Agland is currently working on the business plan and project finance. Also, we are talking with biotech firms that are using yeast and algae on sugar substrates to produce biofuels. The year-round operation of sugar production in Peru is very attractive to large scale biofuel production.
We continue to seek and initiate sustainable agriculture and food projects coupled with project development in biofuels and alternative energy. We also continue to believe that good quality agricultural land is in very short supply and irrigated land is even scarcer.
We value the numerous clients and friends we have met over many years and we look forward to hearing from you