The Tribune

• System ‘not working for farmers and Bahamian people’

• Feed mill PPP halted on ‘controlling interest’ difference

• Pintard pledges to resume outsourcing once elected

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas “needs a system that works for the farmers and its people”, an agriculture entrepreneur argued yesterday, after the Government rejected outsourcing key industry assets due to concerns over who controls them.

Caron Shepherd, the Bahamas Agro Entrepreneurs Group’s president, told Tribune Business that her group had bid to take over the Government-run packing houses and animal feed mill but the effort foundered because the state wanted to retain the controlling interest.

Voicing disappointment that the Request for Proposal (RFP) process initiated under the former Minnis administration had proven unsuccessful, she added that transferring these facilities - as well as the abattoir - to private sector management and control would have improved productivity and output, enhanced efficiency and reduced costs for the Government.

Speaking after Clay Sweeting, minister of agriculture, fisheries and Family Island affairs, confirmed that the public-private partnership (PPP) search had ended, Ms Shepherd told this newspaper that The Bahamas desperately needs to break “the status quo” in agriculture or otherwise the industry will make little progress over the next two decades.

“From our perspective, we were looking at it as allowing the farmer to be in control of the packing houses and the feed mill,” she explained of the RFP. “I think the Government is still saying they want to be in control of it. That’s where the problem came in, and the fact they intended to hire more staff and people to deal with it. It was a turn-off.

“The farmers wanted to control it because of the mere fact it was their industry.... That’s basically what we had discussed and then it was pulled off the table.” An improved packing house and feed mill system, Ms Shepherd added, will enable Bahamian farmers “to do a lot more than they’re doing now.

“If we’re able to do a PPP that includes the Government, the Government will not be solely responsible for that and, as a result of that, we should be able to get more productivity and produce,” she told Tribune Business. “If the PPP takes place, that allows us to be able to do what we need to do, and will help us raise capital.

“If the Government wants to remain in control.... if we keep doing the same thing we’ve been doing for the past 40 years then we’ll be in the same position for the next 20 years; doing the same thing and not getting much further progress than we have now.

“It’s time to change the system. It’s time to put in place a system that works for the farmers and works for the Bahamian people. The status quo needs to change. The status quo needs to change to the point where it’s more inclusive for the farmers.”

Mr Sweeting, in his answer to Opposition questions over why the Government had halted the bid process initiated by the former administration, told the House of Assembly that the Government had been reluctant to grant “a controlling interest” in the feed mill to private sector investors.

“The rationale for discontinuing the Public-Private Partnership on the packing houses, feed mill and abattoir is based on several factors, including concerns about the project’s viability, the level of private sector interest and the potential costs to the Government,” he said. “With regard to the feed mill, it should be noted that under the previous administration, the ministry received four responses to the Expression of Interest.

“However, only three entities met the criteria after review and were invited to present a proposal. After this process was concluded, only one entity was under consideration. This entity proposed a minimum investment and wanted controlling interest, which was not deemed feasible by the Government and was not pursued.

“Therefore, the Government remains committed to exploring opportunities for public-private partnerships where they are viable and appropriate. It will continue to assess all potential projects on a case-by-case basis.”

Michael Pintard, the Opposition’s leader, who as minister responsible for agriculture and fisheries in the Minnis Cabinet, oversaw the bid process launch, yesterday described the outcome as “very disappointing”. He told Tribune Business that, if re-elected to office, the FNM would again pursue outsourcing and PPP’s as a means to empower Bahamian entrepreneurs.

“I believe that the PPP opens up tremendous opportunities for the agriculture sector, and it is a win-win situation once we find the correct partner - both for the farmers we serve and a government strapped for resources,” Mr Pintard said, arguing that the latter was “better served functioning in a regulatory capacity”.

Suggesting that management and labour would be better served under private sector control, he added that one of the feed mill’s issues was that it only provides one type of food. This, the Opposition leader explained, is inadequate for meeting the dietary needs of birds and chicks who, at different stages in their life cycle, need different varieties of feed.

Asserting that the PPPs would gave suited either a group of farmers, operating as a consortium, or an investor with the necessary financing and expertise, Mr Pintard said: “The packing houses in large measure have outlived their usefulness under the control of the Government where there have been annual significant losses to both farmers and the Government in terms of produce.

“We should help the farmers develop the ability to go direct to market, to the retailers and wholesalers. We are putting them in difficulties in terms of inadequate refrigeration, sorting and grading equipment for produce. The Government should concentrate on building the regulatory environment and helping the farmers get to market.”

Mr Pintard suggested that packing houses could be outsourced in “bunches” or individually to private sector partners using the PPP model. And he added that there were opportunities to transform them into produce and processing facilities by turning some of the food handled into the likes of jams and jellies.

“We have a wonderful opportunity to create a number of entrepreneurs who could have been running distribution and processing centres,” the Opposition leader said. “In terms of the abattoir, the Government should really making sure they have an internationally certified operation where livestock are killed appropriately. You could do that with a farming association or entrepreneur with deep enough pockets to set up a slaughterhouse certified by international agencies.”

Suggesting that the Small Business Development Centre (SBDC) had been interested in some of these facilities subject to the PPPs, Mr Pintard suggested that the PLP’s political “philosophy” had deterred it from pursuing the bidding process left “on the drawing board which we are fairly certain would have produced results”. He did not explain what he meant by “philosophy”, although this likely refers to a reluctance to outsource state-owned enterprises (SOEs).

Pointing out that the Minnis administration had created a market for Bahamian produce, by mandating that government departments and major resorts allocate 75 percent and 40 percent of their food purchases, respectively, to local sources, Mr Pintard argued that the Government has “missed an opportunity” by not proceeding with the PPP process.

“If given the chance to govern again, we will return to a model of empowering producers to take over a component of the value chain that makes their businesses more successful,” he said.