Caribbean Agrifood Business Session n°12

Business opportunities in the agroprocessing for Caribbean entrepreneurs

Entrepreneurs need stronger skills and knowledge to develop viable business plans, develop processing plants and access new markets. The need to constantly keep abreast of new skills, new regulatory requirements, new markets and technologies (food storage, preservation, packaging and labelling) has a cost for enterprises which are small and have limited staff.

It is indispensable for them to comply with quality, food safety standards, and certifications requirements.

Access to finance and investments in infrastructure, equipment, and inputs remain a challenge for small operators. Finance remains a challenge at different stages of the business growth, especially due to the existing gap in financing for small and medium enterprises (SMEs) that are too large for microfinance, but too small or risky for traditional banks and investors.

Investments in infrastructure -irrigation cold chains, food safety systems, port operations- are key to enable farmers to comply with the standards required by international companies.

Establishing networks across the food chain is a must and opportunities to do so include study tours, trade fairs, and business roundtables. Linkages with farmers, commercial partners, technical service providers, or financial intermediaries need to be nurtured and strengthened constantly to ensure a good quality, quantity, consistency, and timing of the supply of raw materials to processing plants. Agroprocessors also need to invest in their relationship with smallholders, notably in the form of services, capacity development and finance.

One of the constraints on agricultural production for processing in the Caribbean is that of maintaining quality and consistency of output, forcing processors to rely on imported inputs for their processing operations. Many processing plants run at low capacity, partially due to the seasonal availability of produce, the limited supply from farmers, and the challenge of finding larger markets. The competitiveness of the products is also reduced by high production costs, which mostly are the result of very high energy costs and the high cost of importing inputs for production.

As climate change makes rainfall more erratic and increases the risks of floods and droughts, investing in improved water management and infrastructure, including water and energy-saving technologies is even more important. Access to green technology and infrastructure should be facilitated for SMEs and businesses as the cost remains high and SMEs can help in the rapid implementation of off-grid renewable sources like solar, wind, and other sources, especially in rural areas that are not yet connected to the national grid.

To unlock the full potential of food processing technologies in the Caribbean, it is essential to address infrastructure limitations, provide education and training, and create an enabling environment for small-scale entrepreneurs and agribusinesses to thrive. Smallholders, SMEs and value-chain actors need to acquire more knowledge on food storage, preservation, cooking, date-labels and the many implications of loss and food waste to increase their presence and efficiency in the agro-processing sector.

Technologies to optimise production include water and energy-saving and access to green technology. SMEs can help in the rapid implementation of off-grid renewable sources like solar, wind, and other sources, especially in rural areas that are not yet connected to the national grid.

Smallholders and SMEs often lack the financial resources required to invest in technology. Access to loans and credit for technology adoption is limited, and interest rates can be too high for small businesses to afford. Creating incentives and an attractive enabling environment for the development of rural business services, especially those that are suitable for smallholders. Incentives such as tax breaks, technical assistance, or business planning could help develop valuable services to farmers such as the provision of modern farm inputs, technical advisory services, small-scale commercial laboratories for food testing, irrigation, packaging, small-scale cold rooms, and processing technologies.