There are critical areas that need to be examined when it comes to fostering the holistic growth of micro, small and medium-sized enterprises (MSMEs) in the agriculture sector to safeguard their sustainability and ensure global food security, says Diana Francis, representative of the Inter-American Institute for Cooperation on Agriculture (IICA) for T&T.
She emphasised that without this sector, there is no food and beverage industry which is a critical component of any country’s economy.
Speaking on a panel at the T&T’s Chamber Business Outlook which took place on Thursday, Francis said while IICA has been doing training with various state entities and directly with MSMEs, this is necessary but not sufficient.
“We think it is important to introduce them to the technology as well as the wherewithal to give them the tangibles,” she explained, adding, “Several times we have had a lot of workshops and at the end of it they say ‘how are we going to be able to do the things we have now learnt’.”
“When they go to access the financing and if they don’t know how to properly utilise that financing, the tangibles they need to develop the business are not going to happen. So, we are looking at a more holistic support,” Francis said.
The IICA, however, continues to do its part, maintaining its own MSME group, which creates an ecosystem to lend support including in a range of areas such as peer-to-peer troubling shooting and peer-to-peer business.
Describing this as a “do-it-yourself enterprise” Francis said, “You have to lean on people in the ecosystem that can help you to move forward and I think the gap is a lot of them do not know who is in the ecosystem because they do not know who to lean on and sometimes if they do know who to go to they are hesitant to get into the door because they think they are too small.
“I have had one say to me that they have gone to a particular entity for a grant and the entity told them they are too small to even grow. These are the kind of challenges we face when talk to agri MSMEs,” said the IICA country representative.
Maintaining that these entities are resilient, Francis stated they offer a range of services via sheer self-motivation and innovation.
“Without self-motivation a lot of them would have crashed. A lot of them are out on the margins of the support provided by the typical entities because they don’t meet the collateral, they don’t have certain paperwork and we are trying to find a way to bridge that gap for them,” Francis emphasised.
On capitalising on the global marketplace, she advised that agri MSMEs must have in their roadmap a food safety plan in addition to their business plan.
This, she said, is especially important as food safety becomes more critical as she noted the announcement by Amazon, the giant of e-commerce, that by 2040 all of their suppliers must have a decarbonisation plan.
“We will prioritise our business toward those who provide their plans and results on their path to net-zero carbon emissions,” Amazon said July 10 in its 2023 sustainability progress report published that day.
Amazon said it is already working directly with many suppliers to develop emissions-reduction roadmaps, and is encouraging them to join the Climate Pledge, so far signed by 500 companies that have pledged to become net zero by 2040.
Therefore, even MSME agri suppliers must also have to face how they too will contribute to this net zero emissions objective and meet the necessary target.
“It means that as micro producers they must meet food safety requirements. They must have proper packaging and labelling. They must deal with the logistics and the supply chain to get from T&T back to the global market. Think of them now having to develop a decarbonisation plan in order for them to become a supplier on platforms like Amazon,” Francis added.
During the question and answer segment the issue of whether importing foreign goods ought to be curbed to focus on producing locally.
Dhanraj Harrypersad, general manager, client services at exporTT Ltd, said while the country is trying to earn more forex by exporting, the demand side for goods has to be examined as well.
“We really need to look at what we do have the ability to produce, because you don’t want to stop something coming in that might be essential to consumers and then it can’t be adequately produced locally and at the standard that is expected,” he said, noting that while T&T has a wide manufacturing base there are “certain thing that we can’t produce at this point in time.”
In this vein, Harrypersad advised that production be ramped up in the things that can in fact, be produced locally and getting Government support to do so.
“So, at least, we could cut down on those areas and leave the forex for those things that we absolutely can’t produce,’ he added.
On the manufacturing side, CEO of the Export Import Bank of T&T Navin Dookeran said some of the primary raw materials are not available locally or regionally, which makes local manufacturing a challenge as the inputs need to keep flowing to produce goods.
However, he said, “Where there may be opportunities to curb, that may be on the luxury side of things. We always say buy local but for manufacturers, when you get to a point...an average number we are saying, a benchmark..of where 30 per cent of your revenues are export revenues you are completely close or you have just become a net forex generator,” Dookeran said.
He also shared some insights on what he believed was the solution for foreign exchange problem in the country.
“This is to have your business model in a way that you could earn foreign exchange and have US dollar earnings so manufacturers have to have at least 30 per cent (of revenues are exports)...but services don’t need to reach that 30 per cent. Their number is in the low single digits because they are paying for human capital in salaries in TT dollars. There might be software fees but even with those you’re likely to cover with credit cards and settle in TT dollars so for services ...one US dollar sale and one Euro dollar sale is straight foreign exchange coming back to you and I believe that’s some of the solutions,” Dookeran explained.
He further advised retailers that solely importing to sell on the local market can impact their business, adding that they may need to look at other markets to expand to keep their ventures going.