Chad - Sustainable Commercial Agriculture

CHADCHADCincuantenaireCincuantenaire

ECONOMIC FORUMECONOMIC FORUM

SUSTAINABLE SUSTAINABLE

* COMMERCIAL * * COMMERCIAL * AGRICULTUREAGRICULTURE

Mark Terken N’Djamena, 9 Jan 2011Mark Terken N’Djamena, 9 Jan 2011

WHAT TO ACHIEVEWHAT TO ACHIEVE

PRESENTATION OUTLINEPRESENTATION OUTLINE1. Introduction and background

ATTRACTING INVESTMENT

2. Farming is a business

3. The conditions for successful agriculture

4. Realize low costs of inputs, equipment, transport

5. Distinguish food security, subsistence support, import substitution, commercial farming and agri business

6. Commodities i. with USP for Chad and ii. that make money to ALL value chain actors such as Cotton

77 SUSTAINABLE Cotton, Inputs, Commercial Farms

1.1. INTRO & BACKGROUNDINTRO & BACKGROUND

• Mark Terken Project Development results in Southern and West Africa

• Assisting Governments, investors, banks, private equity funds in African Agriculture

• Look at the USP of Chad – develop sustainable commercial agriculture– Cotton– Low cost inputs and low transaction costs– Large scale & Corporate farming

2. 2. FARMING IS A BUSINESSFARMING IS A BUSINESS

1. Only grow crops which you, your soil and your farm will grow well

2. Buy good seeds, follow required timing and husbandry and apply fertilizers and agrochemicals as advised

3. Be competitive; buy inputs at low prices, work hard to obtain good yields and sell at the right time, to achieve the best price

4. Have sale agreements in place

GOOD YIELD POTENTIAL SOUTH CHADGOOD YIELD POTENTIAL SOUTH CHAD

Source WB 2010

3. 3. WHERE TO START & TO DOWHERE TO START & TO DOROLE FOR GOVERNMENTROLE FOR GOVERNMENT

I. Deliver a policy of ENABLING ENVIRONMENT

II. Peace, no hunger, medication, education

III. Stability and Good governance > FACILITATE

IV. Balanced protectionism, consistent policies

V. Efficient policing, sound judiciary system

VI. Land tenure system & Investment protection

VII.Investment & tax incentives

VIII.Facilitate in work permits for experts

4. 4. LOW COST INPUTSLOW COST INPUTS

• ZERO TAX

• FACILITATE LOW COST TRANSPORT – DUTY FREE TRUCKS, TYRES, SPARES– CHEAP FUEL !

• CREATE COMPETITION AMONGST SUPPLIES / TRADERS

5. 5. DIFFERENT INTERESTSDIFFERENT INTERESTS

1. Chad’s Food security & Import substitution (political & trade balance & pricing objectives)

2. Subsistence support to the hungry & poor(Humanitarian)

3. Emergent farming(Economy Transformation)

4. * Contract Farming (cotton etc) *

5. * Commercial and Large scale Farming *

6. * Corporate farming * (sugar etc.)

SUCCESFUL INTEGRATIONSUCCESFUL INTEGRATION

6.6. COMMODITY GROUPS COMMODITY GROUPS

LIVESTOCK & FISH

CROPS; FOOD, CASH & LARGE SCALE

1. Livestock (Beef, Milk, Poultry, Sheep, Goat, Camel) & Fish

2. Sorghum, Millet, Yam, Cassava, Beans etc.

3. Cotton, Groundnut, Gum, Sesame, Veg & Fruit

4. Sugar, Maize, Soya, Rice (Banana, Onion etc)

6.1 6.1 COTTON – REFORM NOWCOTTON – REFORM NOW

• Peaked at 265,000 ton per year

• FOT Value today us $ 300,000,000 ! = $ 200,000,000 to Chad farmer Now in 2009 /2010 only 35,000 ton ! …..

• Regain a leader position in Africa by: – Consistent & strong agricultural policy – Attract strong foreign investors, reputable cotton gins– They drive the industry !!! And the industry will

• Create competition & deliver fair farm gate prices

6.2 6.2 COTTON - ACTIONCOTTON - ACTION

– High level Research for • Seed variety development• Developing latest technology and agronomy

– Transparent contracting– Organize farmers & train 4 times per season – Provide timely and adequate supply of good seed,

agro chemicals (& fertilizers) and implements to farmers (seasonal credit)

– Collect from groups and pay instant cash

7.1. 7.1. COTTON INVESTMENTCOTTON INVESTMENT

• Value chain & competitiveness study

• Market the industry internationally

• Select donor support; GTZ etc

• Leverage government investment with support & research from EU, USA, Brazil Africa; CFC, Embrapa, USDA, etc.

• Bring in a minimum 3 foreign ginning companies, facilitate their operations

7.2 7.2 SUPPLY CHAIN INVESTMENTSUPPLY CHAIN INVESTMENT

• Interest global fertilizer companies

• Attract seed and agro chemical companies

• Zero tax on seed, fertilizers, agrochemicals, equipment and irrigation !!!!!

• Create competition

7.3 7.3 ATTRACTING ATTRACTING FARMING INVESTORSFARMING INVESTORS

• Value chain studies for Sugar cane and Arable crops (maize, groundnut, soya, rice, etc.)

• With support of donor programs• Identify target areas and market to investors• Offer long term > 50 year land leases to foreign

investors• Investment protection; Miga and or bi-lateral• Offer tax incentives, low fuel costs etc.• Sound tax policy on food imports ! AND ….

REALISE COMMERCIAL FARMINGREALISE COMMERCIAL FARMING