IRAQ - FRUIT JUICE FACTORY PROJECT FEASIBILITY STUDY

Working with Agland Investment Services, Inc. and The Louis Berger Group, we have successfully completed a short technical assistance mission with the USAID Inma (Ar. Growth) Agribusiness Program. Based in Baghdad this Program covers the entire country and has had great success in developing in particular the livestock and horticulture sectors.

Iraq produces about 1 million tons annually of various fruits - grapes, pomegranates, apples and oranges are the main ones.   The bulk of the production is in the north (known as Kurdistan, an autonomous province with some distinct differences from the Arab south).  The focus of this one month mission was to look into the feasibility of converting some of the apparent seasonal surpluses of fruit into juice.

Our mission modelled a small-scale process line of just 24 tons/day of fresh fruit input and produced a 100% juice drink along with a pulp-based "fruit drink".  We looked in detail at both the technical aspects of putting together a factory (raw material supply, location, buildings, machinery, packaging etc.) and the financial aspects of cash-flow and return on investment (ROI).

The bottom line seemed to be that while Iraqis drink fruit juice in copious amounts (the photo illustrates a street level "juice bar"), much of it is in the form of "fruit juice drinks" imported from neighbouring countries like Iran and Turkey.  Our spreadsheet model provided a theoretical positive ROI but this would be in a very competitive real-world market and where the fresh fruit price might in fact be too high for a stand-alone factory to be profitable.

Nevertheless, we are looking at other implementation options and we hope this may result in another mission in the New Year. What we hope to find is an Iraqi investor who is already in an existing beverage business (perhaps water bottling) who wishes to add a product line and perhaps grow his own supply of raw material.

For more information please contact gqb@foodworks.ag

CAMBODIA: CORN - PROSPECT FOR THE FUTURE

Cambodia holds a key position in the Greater Mekong Sub-region (GMS) and has the potential to be the food basket of South-east Asia.

Fed by the Mekong River and the site of the unique Ton Le Sap water body (visible in the satellite photo), the country has excellent soils and wide areas of flat, fertile lands. Access is overland to neighbouring Thailand and Vietnam and to the sea at Sihanoukville.

Cambodia grows rice, upland perennial crops such as coffee and rubber, oil palm and corn (maize). With a population of over 14 million recovery from the civil conflict of earlier years has been impressive and there is a stable government based on an Asian form of democracy and a constitutional monarchy.

Rated B+ in terms of official country risk and somewhat lower on the World Bank's Index of Doing Business than it should be, Cambodia has actually attracted large amounts of foreign direct investment.  Overall China is the largest investor but other investors from Taiwan, Korea and Malaysia have been prominent. Surprisingly this year the UK has led the investors.  FDI is welcome and with a tax rate of 20% and various tax holidays, Cambodia has set its heart on being the business destination in this part of the world.

In terms of agriculture, the Government has seen investors come and go. Political disagreements with Thailand have meant that the larger Thai agribusiness companies such as Charoen Phokphand have been wary of their investments; many of the other Asian investors have been property speculators who took Economic Land Concessions (ELCs), sat on them perhaps with minimal investment and then hoped to have turned a speculative profit as land prices have risen.  So not as much progress has been made as could have been.

The Government is sick of this circumstance. So there is every official encouragement for serious long term real investment based on large-scale farming with good management and technology.

In this case, with our partners we have developed a concept-level corn project.  Details may be downloaded at this link - CAMBODIAN CORN PROJECT

In brief, we are planning to develop a start-up ELC of 3,000 to 5,000 hectares for irrigated corn (maize) with a target three crops per year aimed at the animal feed market. The project can be scaled up to 20,000 hectares once success has been assured.  We envisage an initial capital investment of US$15 million (depending on needed infrastructure).

Corn prices are at their highest level for years (see analysis on our sister site Agrimarkets) but at average long-term prices (which we always use for analytical purposes) of half the current price, this project looks very attractive.  Demand for animal feed is growing sharply in Asia as economic growth increase middle-class incomes and as people eat more meat rather than rice.  China, Korea and other Asian countries import corn and the market is growing.

With our partners we intend to develop this project in the coming months, laying a base for similar developments throughout this region.  FoodWorks will operate as the development facilitator, putting the pieces of the investment puzzle together and ensuring that the projects, wherever they may be, are undertaken with due regard for local communities and environmental safeguards.

For more information please contact: gqb@foodworks.ag

World Food Demand and Population

Geoff Quartermaine Bastin has posted a very personal and emotional article on our sister site, Agrimarkets.

Entitled "Somalia - Tip of the Iceberg?"  the article looks at the basic population growth figures in Sub-Saharan Africa and asks the question "Will famine become the norm?".

His argument is based on population doubling times. A population growing at, say, 2% per annum will double in 35 years.  Many of the least well off and most dysfunctional countries have growth rates that significantly exceed 2% - and they cannot feed themselves even at present.

GQB wonders whether conventional approaches to agricultural development can possibly bridge the gap between demand for food in these countries from much larger populations and supply from resources that are impacted by e.g., climate change or the neglect by governments.

Agricultural productivity (output) has grown by only 1.5% in the last  decades and this is well behind the increase in population that has come about from successful health programmes.

Geoff says we've reduced deaths at birth only to starve the people who have survived.  Aid budgets are disproportionately aimed at high profile and easy to implement health programs; USAID's budget for health was US$6 billion in FY 2010, agriculture received only $1 billion.

No one is against improved health and we at FoodWorks see that as an essential element (along with education) in improving agricultural productivity.  But agriculture itself and its supporting infrastructure cannot be neglected - but it has been.

Geoff doubts that agriculture can catch up given the laggardly nature of aid agencies that seem baffled by the industry. But he does see a solution in the private sector.  High crop prices and good margins mean that increasingly the private sector is taking on the burden of  development. Private agribusiness has the resources to invest in R&D and capacity to transfer the technology to where profits can be made.

The question is, how equitable will be these transfers and will they come in time to prevent more humanitarian disasters like Somalia?

Follow our market  analysis and comments daily on Twitter @Agrimarkets

WORLD AGRICULTURE and FOOD COMMODITY MARKETS BULLETIN SERVICE

FoodWorks is adding an important service to its regular consulting work. FREE!

There can be no doubt that the world is heading for a food crisis in the coming summer. Rising food prices drive more people into poverty and put brakes on the world's recovery from recession. Poor, hungry people lead to civil instability and a slower recovery means less jobs.

We need to act now!

Some of the major factors that have been pushing food price indices to their highest levels include:

Demand side

* Rising population – the world is adding 80 million people every year. Moreover, the majority of these people are in developing countries which have a limited agricultural resource base. As an aside, health programs, laudable as they are, impact more rapidly than food supply initiatives. So in countries where the population growth rate is highest, the Malthusian boundary is closer than we think.

* Rising incomes – the fastest income growth rates are also in those countries with large populations and above-average growth. Whereas the aim in the high income countries is to cut back on food consumption (we worry about obesity), a large proportion of the world’s population is moving towards increased consumption of eggs, meat and milk. All these commodities are poor converters of food adding pressure to the demand for staple foods.

* Bio-fuel – We are less concerned about bio-fuels. While the USA grew about 420 million tons of grain in 2009 and put 28 percent of that into bio-fuel, it is surely the case that without the ethanol program this amount of grain would not have been grown. It is disingenuous to take the bi-fuel grain and say “it could have fed millions of people”. Not so, without the demand for ethanol, at least a proportion wouldn’t have been grown. That said, this area of consumption represents a significant part of the demand for natural resources and has its own impact on the environment.

Supply side

* Water deficits – water is the elephant in the room. Aquifers are being depleted everywhere. Sanaa, the capital of Yemen, will soon have no water supply whatsoever. Melting glaciers in the Himalayas will first flood Pakistan (as they did last year) and then the absence of water will starve the largest irrigation system in the world.

* Climate change – however it is measured, and despite the skeptics, there seems enough evidence that the pattern of the world’s climate is changing with large dustbowls developing in Central Asia and Sub-Saharan Africa. Soil erosion and the damage to the eco-system from e.g., oil palm being grown in Indonesia also give huge cause for concern.

* Loss of land to non-farm use – as the human population grows people migrate to cities in search of jobs that are almost always more remunerative than agriculture. Mega-cities are consuming land for housing and industrial use at an enormous rate.

* Technical limits to productivity (yields) – the “Green Revolution” of the 1960s and ‘70s was based on large increases in land productivity. But the growth in yields cannot be exponential. Already many developed countries have reached the limits of what the land will yield. In the developing world yield increases, obtained at considerable cost, are frittered away because of lack of infrastructure, e.g., for storage and drying. Perhaps 40 percent of the production of food in these countries is simply wasted before it ever reaches the table.

All this has happened in the context of the public sector – national governments, multi-lateral aid agencies and the other donors – losing heart for agricultural development. Lack of investment in agriculture, its infrastructure and its skills has eroded the capability of many countries to deal with the crisis that is now on us.

With all the above in mind, FoodWorks has recognized that there are nevertheless opportunities. If governments will not or cannot act, then they should stand aside and let the private sector and the profit motive take over.

It's an urgent priority to mobilize capital and expertise and get it to work!

In this case, we at FW are developing a commodities market analysis service that not only looks at price and market trends in terms of the supply-demand balances of the major food and beverage crops, but points to related investment opportunities.

We will start with the basics of the food business, the staple crops, and focus on wheat, corn (maize) and rice. We will then add oilseeds and oils. As we progress we will include fertilizers and sugar and coffee and dairy.

We’ll do it (at least initially) free as a service to our clients and to facilitate the investment and development projects that are our bread and butter. We’ll bring to this not mere quantitative analysis, but the lengthy experience needed to see what changes in the numbers really mean on the ground with the farmers and those buying in the market.

And if you'd like to us to answer specific questions - free - by all means just email foodworks@quartermainesworld.com

Background note: FoodWorks staffers have had many years of experience of both public and private sector project work in every sector of agriculture and agribusiness. We are not academics, but people who have real world experience of how the markets work.

Tools of the Trade

I'm spurred to write this post by a recent chat I had about value chain analysis. The folk I spoke with seemed to think that a deep, formal knowledge of the subject was a prerequisite for successfully developing agriculture.

I disagreed.

Look: as a trained economist (Oxford University, Institute of Agricultural Economics which became the Oxford Department of International Development) I understand and apply ALL the formal tools from time to time during my work. These include cost-benefit analysis, financial and statistical analysis (internal rates of return,net present values, bell curves), terms of trade analysis, DRC analysis, welfare analysis etc. and so on. If you qualify as an economist you usually end up with a box of tools.

So why do people want to know which specific tools you have in your box? It's like asking your car mechanic if he understands how to use a torque wrench, or a doctor if he's familiar with a CAT scan.

There may be two answers: one is that there are so many charlatans out there, so now people worry that they'll find they've paid money and don't get results. That's fair enough. One thing you can do with FoodWorks is ask for references and you'll get them from the top people in this industry.

The other thing is that non-specialists (usually the folk that have the money - the donors and the like, the desk officers) don't understand their business. After all, they are often bureaucrats or investors. So they fall for the jargon.

"Integrated value chain analysis" (IVCA) is a real case in point. Years and years ago we used to measure marketing costs and margins. Absolutely standard, no one thought it was anything special. You just did the measurements as part of your effort to understand the market supply chain. Then IVCA came along and lo and behold, one could sell a service as a Value Chain Analyst.

What's the difference? The first kind of analysis really only captured the "horizontal" movement along the chain whereas VCA looks at the entire business system (horizontal and vertical) and tries to capture its entire value with a view to looking at its competitiveness. The "integrated" bit just makes it sound a bit more complicated in order to raise the consulting dollars.

Here's a formal definition: "The value chain is a model that describes a series of value-adding activities connecting a company’s supply side (raw materials, inbound logistics, and production processes) with its demand side (outbound logistics, marketing, and sales). By analyzing the stages of a value chain, organization’s are able to redesign their internal and external processes to improve efficiency and effectiveness." (Rayport and Sviokla 1996 - see below).

Like so many of the ideas in this area it derives from Michael Porter's work. But economists remember that Porter pretty much took the old ideas of comparative advantage in trade - basic undergraduate economics - and added a sexy overlay. The entire area of competitiveness theory opened up a whole new area of strategic planning and even more of the necessary bucks.

Now here's the thing: IVCA is indeed useful. But it's NOT magic; yes, it does require careful and systematic quantitative measurement, but that's what economist do every day of the week. And IVCA is NOT going to answer the real questions of agricultural development all on its own.

That requires EXPERIENCE and it's experience combined with knowing how to use all the formal tools in the toolbox that we at FoodWorks bring to the table. The experience to know that when all the quantitative modelling in the world tells you to make that investment, somewhere there's just that one little thing that will screw the deal, whether it's for the smallholder being stiffed by the middle-man (by the way another shibboleth of the academic world) or whether your $100 million feed mill is actually going to find the raw material at the right price. It takes "nous" as well as those tools.... just like it takes a real mechanic to fix your car.

Photo: GQB checking out a real world value chain at Karachi Fish Harbour, Pakistan.

PS. If you want to follow the literature on IVCA, here are some references (so you know we have them in our tool box):

'The Virtual Value Chain', John Sviolka and Jeremy Rayport

'A Handbook for Value Chain Research', Raphael Kaplinsky and Mike Morris, IDRC

AG SECTOR ASSESSMENT IN SOUTH SUDAN

We have just completed an assessment of agriculture in the Equatorial Region of the world's newest country (on 9th July South Sudan becomes the world's 193rd country). The work involved extensive field trips West of Juba to Yambio (by plane and road) and around Yei in Central Equatoria State and Torit in the East. We also took a look at the Uganda border point at Nimule that feeds almost all foodstuffs up the main road to Juba.

That the most important feature of the sector; Juba is expanding wildly with the excitement of independence from the Muslim North and an influx of Sudanese returnees and Kenyan and Ugandan job-seekers. But almost all the food is imported despite the enormous potential of the so-called "Greenbelt" that runs along the border with Uganda and the Democratic Republic of Congo. While Eastern Equatoria is rather dry, once one moves West past Yei the land is green all year round. This is classic equatorial rainforest with up to 2,000 mm of rain annually and reasonably good soils; potentially this region can be the bread and fruit basket of Africa.

However the emphasis should be on the word "potential" because right now there is almost no infrastructure to support commercial smallholdings. The main roads are reasonable, and one can reach Juba from Yambio (right in the heartland of the greenbelt and a considerable town) in 9 hours, but there are no post harvest facilities (cooling, drying, storage) etc. and the largest single donor-funded project FARM SUDAN (USAID, $55 million) aimed at tackling this lack has been stymied by confused policies and administrative difficulties.

So through much of the region one finds returnee homesteaders struggling with very limited resources to re-establish their small plots of maize, sorghum and cassava. These people receive seeds and tools from the many NGOs operating emergency relief but the "truck and chuck" approach doesn't really engender sustainable development and there has to be a paradigm change before the potential of the Greenbelt is realised. In the meantime food security is an important issue with the World Food Programme (WFP) estimating a possible 3 million people are at risk.

The other issue is foreign investment. There is huge interest in the area - for example we came across Dole looking at pineapple in Yambio. Large-scale investment in agriculture will have to be handled very carefully with regard both for the returnees who own the land under traditional rights (so it's not simply a case of the new Government giving concessions away) and the hugely sensitive rainforest environment. Climate change is a real issue here and it is inexplicable that USAID has discounted this in their approach to development in South Sudan (an assertion made on the basis of a direct quote from responsible persons in the AID Mission in Juba).

Another concern is the influence of the Lord's Resistance Army (LRA) in some of the most productive land between Yei and Yambio. We saw burned-out villages and social infratsucture (clinics, schools). We also saw elements of the Ugandan Defence Force deep inside Sudanese territory, so the question of civil instability is raised.

Despite these concerns, one can be optimistic about the future. Once South Sudan joins the East African Community (EAC) as indeed it will shortly after 9th July, we will see much more assistance and investment from neighbouring countries. Food supply to the cities and support for the development of a viable smallholder sub-sector will remain the areas for work going forwards.

For a more personal perspective on Southern Sudan, please check out Quartermaine's World

Photos:

Smallholder near Torit, Eastern Equatoria State

Aerial view of gardens over the Greenbelt

Progressive farmer at Yambio, Western Equatoria State

A NEW WORLD FOOD CRISIS?

The news media are full of new concerns about a world food crisis in 2011. FoodWorks and its affiliated companies in Project Partners have been working for decades in the fields of rural development and livelihoods in agriculture, not to mention the more commercial aspects of agribusiness, food processing and related technologies. We believe we have something significant both to contribute to the current discussion and to offer as experts in the entire "farm to fork" value chain.

First, let's review the current concern that is building in institutions like the UN's Food and Agriculture Organization (FAO) which has the primary task of providing early warnings about food shortages. Then we'll go on to say something about the fundamentals of this problem that is not easily going to disappear.

Jacques Diouf, the Director-General of FAO, has underlined with some simple facts the need for a new "Green Revolution" to provide food for hungry nations. There are a billion people on Planet Earth who go hungry right now. World food production will need to increase by 70 percent to feed a population of over nine billion people in 2050. With limited land, farmers will have to get greater yields out of the land already under cultivation. In a strikingly direct statement entitled "Price volatility and food shortages to remain" Mr Diouf says that the FAO Index of Food Prices rose again sharply at the end of 2010, heralding the possibility of another major food crisis. Coming from FAO, but with support from statements made by President Sarkozy of France recently about commodities prices and food riots and the US Government's "Feed the Future Initiative", this is not scaremongering.

FAO rightly identifies the underlying structural causes of the emerging crisis. As development professionals, we at FoodWorks absolutely support this analysis.

1. Falling investment in agriculture: the share of agriculture in official development assistance (ODA) dropped from 19% in 1980 to 3% in 2006, and now stands at around 5% - it should amount to $44 billion per year. ; the budgetary expenditure of low-income food-deficit countries on agriculture represents about 5%, when this should be at least 10%; finally, domestic and foreign private investments of around $140 billion per year should amount to $200 billion.

2. Unfair terms of trade for commodities: The OECD countries protect their agriculture with a total support estimate of $365 billion per year while encouraging through policy changes free, unsubsidised agriculture in the developing world. Non-tariff barriers also restrict trade.

3. Non-food industry speculation in agricultural commodities: there is considerable evidence that hedge funds and other, non industrial users of agricultural commodities take advantage of price upswings that drive the actual commodities to price levels that make their use as raw materials too costly. Not only do price surges take food directly from the mouths of the very poor, but they damage enterprise throughout the value chain, thus entrenching food shortages.

The blunt fact is that human population growth is leading to a Malthusian crisis in developing countries where the usual solution, technical change, cannot easily increase supply.

Tanzania is a good example: the population is growing at nearly 3% which means it will double from 40 million to 80 million in less than 30 years. But the agricultural base - good soil and available water - is limited. Climate change is compounding the problem with extended droughts. The necessary infrastructure, especially irrigation and farm-to-market roads, is lacking.

The awful irony is that this population increase is a result of rapid success in tackling basic health. Health projects (e.g. malaria net distribution) impact rapidly, whereas investments in agricultural productivity take many seasons to show their results. A recent assessment of agriculture in Tanzania conducted by FoodWorks shows that every aspect of the sector and the value chain needs to be tackled. But donors are increasingly reluctant to do so because of the difficulty of producing the easy to understand "success stories" so beloved of desk bound bureaucrats.

We believe that part of the answer will come from the private sector. Already large sovereign wealth funds and other commercial investors e.g. in the Gulf Arab States (the GCC) have begun to invest in agriculture to secure their own food supplies. FoodWorks has a number of plans afoot to help with this process. Equally, the large multi-national agribusiness companies need to be encouraged to make their products and R&D available to partners in the emerging but at-risk economies. USAID already has programs like its Global Development Alliance (GDA) in place and these kind of prgrams, combined with so-called "corporate social responsibility" (CSR) programs can lead to worthwhile public-private partnerships (PPP).

But there will not be any simple answer - and that's what confuses the bureaucrats. They don't understand that agriculture and agribusiness is possibly the most complicated human activity there is. It climate and biology-driven and includes elements of science, technology but also every angle of business, finance and marketing that can be imagined. Grow a crop, increase yields by all means, but if you can't ensure its quality and traceability (origin), store it, move it, package it and ensure that it's safe to eat and do that profitably, then the basic agronomy fails.

FoodWorks and its partners have over 40 years of experience in every aspect of this astonishingly complex activity. We want to be part of the solution. And a solution is urgently needed.

For more information click the link to: Project Partners

Or contact Geoff Quartermaine Bastin directly by email at foodworks@quartermainesworld.com

Chart: UN FAO

EAST AFRICA - TANZANIA - SMALLHOLDER LIVELIHOOD DEVELOPMENT

Geoff Q-B has been working in East Africa, in Tanzania and Kenya looking at development possibilities funded by USAID. Part of this work has been to prepare a full Agricultural Assessment of Tanzania that covers every sub-sector and provides guidance for where development funds are likely to go.

Geoff also undertook a trip by road from Nairobi across the international border at Namanga and then past Mounts Meera and Kilimanjaro to Arusha which is the centre of agribusiness in the North of Tanzania. Here's an excerpt from his report:

"The outward trip from Nairobi took 6 hours leaving at 12 noon in a rented Toyota Hilux. The road is adequate. Probably 60 percent completed on both sides of the border, where the Chinese contractors have done their work there is a reasonable two-lane road. Not being a roads engineer I hesitate to pass judgement, but I suspect the overall standard of work is not high; in some place the hard shoulder had already subsided and for much of the new road the drainage seemed inadequate. In the places where the work is on-going, we drove on compacted dirt roads which have not been well maintained either in Tanzania or Kenya (indeed there is no discernible difference between the road – which is the main North-South Highway- in either country). A 4X4 is necessary and I would recommend a slightly more comfortable vehicle than a Hilux.

The border crossing point at Namanga took 2 hours to negotiate on the outward journey. This was due to exit paperwork for the car being processed. Visas were very easy and I was not charged either by Tanzania or Kenya for the entry stamps. The return crossing took less than one hour (because the vehicle was from Kenya)."

Once at Arusha, Geoff met up with Dominick Ringo , Director, Research, Community and Organisational Development Associates (RECODA).

Dominick and Geoff visited one of the smallhoders that RECODA is supporting with funds from the Danish Rockwool Foundation. This farmer (see photo) is one of a local group of 35 farmers that have adopted a model farm approach developed by RECODA. The approximate project fund is $450,000 and the total number of beneficiaries in the project is 400 ($1,125 per farm family). After stakeholder consultations including the district authorities, the project provides a ‘shopping list” of different crops and crop mixes for choice by the farmer. The project provides technical advice, parent livestock (goats and chickens) and seedling (mainly banana). No other subsidies are provided, however the project works closely with the beneficiary on implementation and disseminates the lessons learned throughout the community.

Here's what Geoff reported:

"I was very impressed by the approach (which RECODA is in process of evaluating formally and providing written information about). Of course the farm I was taken to see could have been unique, but I did not form this impression, in any event Dominick Ringo said he could provide all the basic data I needed if I wished to check. The farmer (and his wife) was clearly delighted with the project that had helped them develop a one hectare commercial banana plantation. In addition they grew cassava and had chickens and goats."

Clearly some development projects do work and not necessarily with the huge amounts of money that the major donors seem to require. Well done RECODA!

Note: this assignment was undertaken on behalf of International Relief & Development (IRD)

PAKISTAN - FLOOD RECOVERY

Muzzafarghar, South Punjab - the photo may not look much, but closer examination will show the extent of the damage done by recent floods in Pakistan, particularly in this area which is at the confluence of the Indus and Chenab Rivers. In the foreground is a field of what was cotton, completely destroyed with a huge impact on Pakistan's textile sector that depends on local supplies. Further back, one can see a mango orchard that has been waterlogged, severely damaging the roots; next year's harvest is expected to be low and many trees themselves have died. All the other crops in this areas, including rice and maize have been lost. Many livestock have died or are starving because fodder crops have vanished and there is a shortage of milk.

GQB is in the flood affected area helping a client plan an agricultural recovery and reconstruction project. There is a critical need to immediately intervene with land reclamation, reconstruction of water ways (ironically lack of irrigation because the flood destroyed tertiary canals is likely to be a problem) and the provision of seeds for planting the Rabi (winter) wheat crop. The project, budgeted at $50 million for USAID, will provide a cash-for-work component that will immediately inject liquidity into the local economy and start repairing the damage. A voucher-based distribution of seeds, fertilizers and hand tools will give the farmers the basics of what they need to get going again. The project will cover 12 of the worst-affected districts in lower Punjab and in Sindh which remains inundated. Unless action is taken very soon, what was a natural disaster will turn into a very human one, with food shortages added to the misery of an estimated 20 million people in these areas.

AFGHANISTAN - KANDAHAR DEVELOPMENT

GQB has been working with USAID and the British Royal Air Force Regiment (a special force protection unit) around Kandahar Airfield (KAF) in the south of Afghanistan. The aim of the project is to develop a supply of fresh fruit and vegetables from the area surrounding this major ISAF-NATO base and at the same time influence the farmers away from the Taliban by providing inputs, cleaning irrigation ditches and generally helping with the development of the area.

The photo is taken at the Tarnak Agricultural Research station that before 2002 was a location for Al Qaeda - allegedly Usama Bin Laden had a house here. Now its an intensively and commercially farmed area with watermelons (shown growing here) and grapes. The area also grows a range of other fruits and veggies and is ripe for further development, both for the 30,000 people on KAF, the local market and export.

AFGHANISTAN - POMEGRANATE DEVELOPMENT

Pomegranates are the main tree crop in the Arghandab Valley just west of Kandahar City in the South of Afghanistan. KC is the focus of a coming surge to try and strangle the Taliban and the AVIPA+ project (managed by International Relief & Development with whom Geoff Q-B and Eddie Vernon are working at present) has made a real effort to help farmers by planting new saplings in an effort to rehabilitate plantations and increase earnings. The project has operated in three phases, first with a cash-for-work scheme to prune the existing trees, then by replanting with pomegranates, plums and apricots, and then undertaking an IPM program. What's expected is a huge surge in yields and output, so AVIPA+ hopes to help with the construction of packing houses and upgrading the marketing chain. The hoped for result is a calming of the insurgency because happy farmers are less likely to support the radical opposition.

Photo: Andy Burridge

AFGHANISTAN - STABILISATION PROJECT SOUTH

Geoff Q-Bastin and Eddie Vernon are working on contract with the AVIPA+ project in south Afghanistan, based in Kandahar. The project is managed for USAID by the leading American 'not for profit' company International Relief and Development (IRD). IRD has a major presence in Afghanistan and is the most successful USAID NGO contractor operating in-country maintaining a presence in the volatile south of the country despite continuous threats and attacks on its personnel. The company tragically lost three of its expatriate staff in the recent air crash at the Salang Pass.

Operating in the fertile Sistan River Basin (comprising the Helmand and Arghandab Valleys), the AVIPA+ project ($300+ million - the acronym stands for Afghan Vouchers for Increased Productivity in Agriculture) is a civil-military so-called COIN (counter-insurgency) innovative effort to stabilise communities by working with farmers to support their livelihoods. The project has various components including cash-for-work (CFW - such as pruning fruit trees or cleaning irrigation canals), small grants (e.g., for tractors) and voucher packages that provide a mix of vegetable seeds, tools and fertilizers as well as distribute fruit tree saplings.

The AVIPA+ project has been hugely successful with one military commander saying that it has substantially reduced casualties. In addition it has improved farmer's incomes through increased yields; fruit tree yields increased by as much as 30%. The project will transition into a more traditional development phase over a planned 5 year period as the security situation improves.

Photo: the fertile Arghandab Valley from the air looking north; notice the irrigation channel to the right of the photo on the outskirts of Kandahar City which is fed from the Arghandab (Dahla) Dam in the uplands of the Hindu Kush. This is a massive irrigation system that provides water for one of the potentially (and historically) most productive areas of agriculture in the world.

For more personal reflections on Afghanistan, check out Geoff's travel blog on www.travelblog.org/bloggers/quartermainesworld

IRD is at www.ird.org

TRAVEL IN QUARTERMAINES' WORLD

Geoff Q-B has started a new travel blog.

It occurred to him that what with travelling to exotic place for FoodWorks, he met all kinds of folk, travelled in all kinds of conveyances, ate interesting food, and gleaned a lot of interesting photos and ideas (and opinions) that wouldn't fit easily into a corporate web site. But perhaps people might be interested in what amounts to the context of FoodWorks activities in various countries. And as an inveterate scribbler, Geoff enjoys writing... hence the blog.

It's implemented via a dedicated site, TravelBlog.org which makes specific tools available to travel writers. The site also provides a huge amount of world-wide information and hosts hundreds of travel-related blogs. Please check out

www.travelblog.org/bloggers/quartermainesworld

FOOD AID IN AFGHANISTAN

Geoff Q-B is in Kabul working as a senior advisor to the 'AVIPA Plus Program' being run by International Relief & Development (IRD) for USAID. "AVIPA Plus" stands for Afghanistan Vouchers for Increased Productive Agriculture" and more information can be found on it on the IRD web site at http://www.ird.org.

Briefly, however, the project has distributed vouchers for certified wheat seed and fertilizer (Urea and DAP) to subsistence farmers throughout the growing area. 47,000 hectares of land (irrigated and rain fed) have been covered with substantial yield increases. Jobs have been created and improvements made in the value chain.

The challenge now is to extend the project into other areas and other sub-sectors of agriculture.

GEORGIAN AGRICULTURE STRUGGLES TO SURVIVE

We are in Georgia looking at agricultural development (see Note below). In the post-Soviet era agriculture in Georgia declined severely with people falling back on their own resources to survive in a much harsher market-oriented environment. With the dissolution of the large collective state-run farms, more than 2.3 million land titles were distributed. Most families have plots about one hectare in size, enough for self-sufficiency, but well below an economic scale for commercial agriculture. The situation has also been complicated by political problems such as the August 2008 war with Russia.

The wine growing industry is a case in point: Georgia produced most of the wine drunk in the Soviet Union. The quality was not all it might have been, but there was a large and regular market. The dispute over the South Ossetian territory changed that. Georgia now struggles to find a market for its wine, and the vineyards have limited financial resources for upkeep and re-planting.

The fact is that Georgia has a wonderful natural endowment for agriculture; the climate is good, rainfall and water supply plentiful in most parts, the soil is black and fertile. Georgians are hard-working, conservative people. But the rural population is ageing (36% of smallholding owners are over 65 years old) and it is hard to keep young people working on an essentially stagnant sector; self-sufficiency is the overall model, with only 18% of agriculture in the cash economy.

The collapse of the Soviet Union (admittedly now 20 years ago) meant that existing large-scale infrastructure was left to rot and a range of 'public goods' such as roads and main irrigation channels were not maintained. In general, but especially in the mountain areas (that comprise most of Georgia), access to services and markets is very limited.

But the real absence is one of finance. Interest rates are very high (over 25%) and agricultural land is not accepted as collateral. The point about a transition from a centralized, communist economy to a free-market, capitalist economy is that there should in fact be available capital! What is capitalism without capital? The answer is as any Georgian small holder will tell you, a desperate struggle to survive with what you have to hand.

This is not to say that we suggest a major transformation of agriculture in Georgia. There may be parts (e.g., along the central corridor, in the lowlands of the coast and in the east) where a commodity approach can be taken. But for the majority living in the fertile, Caucasian uplands, smallholding is a sustainable model. However it desperately needs support and the question we are trying to answer is how should that support might be delivered.

Note: Geoff Quartermaine Bastin is contracted by International Relief & Development (IRD) for this assignment. IRD is a major not-for-profit company and charitable institution based in Washington DC and has operated in Georgia for the last 10 years supporting various aspects of humanitarian relief and economic development activities. Check out http://www.ird.org/

Photo: vineyards in Central/East Georgia

RURAL DEVELOPMENT IN YEMEN

Yemen! In the news unfortunately for all the wrong reasons, political strife and terrorism - the themes for our age. Geoff QB is in Sana’a looking at the rural development situation and suggesting what can be done for a country where 90% of the people live in abject poverty in rural areas, where the most remunerative crop is a mild narcotic shrub (“qat” or “khat” - Catha edulis), only a fraction of the land is cultivable (most is desert and mountain) and where a population of 22million will double in 20 years. Yemen imports its essential food stuffs and exports oil and gas, but the supply of those commodities is running out. Worse still, water for agriculture and social use is limited. Aquifers get recharged from sudden rainstorms in short periods so run-off is massive. Water catchment, conservation and distribution is the priority sector in rural development – but qat uses 30% of water available for agriculture with no nutritive value whatsoever. The other issue is terracing (see photo). Yemen has a terrace system thousands of years old. But it is being abandoned except where it can grow qat; farmers don’t find it worthwhile to grow food in such a labor intensive way. Yemen is probably one of the most challenging countries we’ve ever worked in (and that includes Iraq, Pakistan and Afghanistan!). Not to mention the risk of being shot or kidnapped if you even try and get to see the farmers!

Photo shows qat terraces in the Haraz Mountains

LAND GRABBING OR THE WAY OF THE FUTURE?

Is the new wave of major private sector investments in (mainly) African land just a new form of colonialism or perhaps the only way to successfully leverage major underutilized natural resources? This is a question that Andrew Rice tries to answer in an important and well-researched 6-page article in 'The New York Times' (see:

http://www.nytimes.com/2009/11/22/magazine/22land-t.html?pagewanted=1&_r=1&sudsredirect=true

Outlining the way often Arab investors have moved into countries like Tanzania, Congo and Sudan, Rice uses the example of Ethiopia to illustrate both the pitfalls and advantages of the private sector doing what the public sector (including the donor agencies) has largely failed to do. On the one hand as my ex-tutor at Oxford, Dr. Paul Collier, has pointed out, ignoring commercial agriculture in favour of peasant farming (which he delightfully calls "middle class romanticism"!) has not provided food security, but on the other hand, much of the land best suited for commercial ventures is already spoken for by local people - don't they have a voice too? And what if it is ignored?

I tend to agree with Collier; significant agricultural (and agribusiness) progress - and hence increased food security - occurs when the huge resources of multi-national agribusiness are leveraged responsibly, which was my experience as a manager with Cargill. Thailand, for example, is a major food exporter for quality standard products not least because Cargill made significant investments in the industry that were rapidly taken up by local groups. Few governments and less donor agencies or NGOs can match the technical R&D and market clout of these big corporations. But the emphasis has to be on responsible development, paying particular attention to the local socio-economics and local cultures. The fact is unless the project takes these factors and all the stakeholders into account it will inevitably fail.

This is one aspect of the new wave of investments that concerns us at FoodWorks: as both technical and economic consultants (having worked in both private and public sectors) we understand the full complexity of agricultural development through the value chain "from farm to fork". I wonder if many of the new investors (perhaps speculating on future rises in food commodity prices but without in-house expertise) realize that agriculture goes beyond simple agronomy? Unless a full package of development services is applied to their investments that deals with local concerns as well as, for just one example, international marketing standards, many of Mr. Rice's dire predictions will indeed come to pass - Geoff Quartermaine Bastin, Bangkok

Photo: Simon Norfolk, NYT

EASTERN EUROPE - AGRIBUSINESS POTENTIAL

Belgrade - a pretty dramatic and interesting change from Islamabad! However elements of this work have been similar to the competitiveness activities in Pakistan. Geoff Quartermaine Bastin has just spent a month assessing USAID's Economic Growth Program (EGP) that includes an Agribusiness Project that has focused on small enterprise development throughout Serbia. The Agbiz Project is primed by Development Alternatives Inc. The Project has 195 'clients' and aims at increasing enterprise sales and creating jobs. A successful example of the work is a family-owned company called Bio-Trend Donato, a producer of prepackaged salads, dressings and vegetable-based sauces in Novi-Sad where the Project helped develop a new marketing plan, improved product packaging and increased sales by $1 million as the result of a sponsored visit to a major trade fair in Germany. For more information on this particular activity with Bio-Trend see http://www.america.gov/st/business-english/2009/September/20090930160446amskoorb0.7583887.html

Serbia is a fascinating country with a huge scope for agricultural development and FoodWorks hopes to return sometime in the not too distant future.

CHANGE OF PERSPECTIVE AND NEW HORIZONS

For the last three years FoodWorks has been focused on South Asia, principally Pakistan, although Eddie Vernon has been working in Afghanistan and Bob Lindley has been in the Pacific. However, now the time has come to change perspective somewhat and look at opportunities throughout the region. This does not mean we have finished with Pakistan - the problems in agriculture remain enormous - but that the donor community has put agriculture on hold for a while. The Asian Development Bank has re-focused on infrastructure while USAID is pondering about whether to move ahead with the the $400 million planned investment (that we helped design) in staple crops and livestock/dairy. Hopefully by Christmas some decisions will have been taken and things might move ahead. We'll be happy to participate if the do. Meanwhile, we are looking at Nepal (crop diversification), Bosnia (capacity building) and Cambodia (private sector investment in rice).

AGRIBUSINESS DEVELOPMENT FUND IN SINDH

SINDH DEVELOPMENT FUND: Working with the Competitiveness Support Fund (CSF - see link), we have created, designed and now mobilized a $30 million agribusiness investment fund exclusively for the Provincial Government of Sindh (Planning and Development Department). As designed by the CSF team, the SDF will eventually make grants to small farm enterprises and provide credit guarantees for larger investors; it will provide technical assistance (Eddie Vernon and Bob Lindley have designed the crops and fisheries aspects respectively, Younus Sandeela has supported the project) and access to infrastructure development funds. The CSF-SDF Team was put in place by Geoff Q-B and has now been handed over to a local CSF manager. Based in Karachi, the CSF managed team will operate throughout rural Sindh. Projects so far identified include date processing in Khairpur District, banana processing, continued development of the Karachi Fish Harbour, and installation of an effective cool chain system at Karachi Airport. The SDF is initially funded by the provincial government for 3 years but is expected to be augmented by other donors.