I’m sitting here in the district of Pachacamac Peru in the region of Manchay Alto. It is late in the evening and I am just collecting my thoughts on a great day spent with 60 small land holder vegetable producers. No matter where I travel in the world and no matter the crop, country or size of farm the issues are surprisingly similar. These farmers average 3 HA in size, growing peppers, cauliflower, broccoli, potatoes, strawberries and corn. In most cases, they’re producing 2-3 crops per year! So what are the issues that they’re facing today?
1. Declining margins, eroding profits and rising input costs. These farmers use the latest plant protection, seeds & fertility programs — Bayer Crop Science hats are everywhere! And they’re all still working hard to find the right balance for their business.
2. Improving marketing skills to grow the right product for the market at the right time.
3. Gaining access to capital. Today in Peru, interest rates on operating lines of credit are at 20%. Bank financing is difficult to get so trade finance, in many cases, is the only option.
4. Adding value to products. Process products into new value added products to differentiate them in the market and create longer-term security.
5. Getting closer to the consumer — becoming part of a shorter supply chain.
And what makes farming in South America just like many other places?
6. Water. Or should I say the lack of it.
Between urban pressure for more and more water coupled recently with a highly unusual climate, the pressure is on not to thrive but survive. These farmers can now only receive adequate irrigation water allocations for 5 months of the year. Sounds similar to the water issues in Alberta, California & a myriad of other places around the globe.
The question is – can technology solve this issue?
Art Froehlich is a global Agri-business consultant and strategist. He can be reached at Art.Froehlich@adfarmonline.com