Resource National Master Plan for Agricultural Development in Suriname: Open Field and Covered Crops Business Plan
Type Policy Paper
Last update: 01/03/2018
Type: Policy Paper
Language English
Year of publication: 2016
Citation: Part of the National Master Plan for Agricultural Development in Suriname: 1. Agriculture Developement in Surinam 2. Agriclture-Atlas 3. Agriculture -Executive Summary 4. Aquaculture Business Plan 5. Citrus Business Plan 6. Rice Business Plan 7. Vegetable Business Plan
Authors: Kaplan Planners
Target countries: Suriname
Download: 7,818kb
Summary Vegetable production in Suriname is estimated at 16,000 tons per year at least, of which 12,000 tons are included in the official national reports. Nearly 3,000 tons of this amount are exported, while another 10,000 tons of vegetables are imported from elsewhere. The implication is local consumption of 23,000 tons of fresh vegetables, which is about 44 kg per person per year. Given population growth and changes in food consumption patterns, it is estimated that in the next twenty years this local demand will increase to 30,000 to 40,000 ton per year. About 75% of production occurs in Wanica and Saramacca. In addition, processed vegetables are imported for direct consumption and as raw materials for other food produced in Suriname. Such raw materials are not purchased locally because of a lack of continuity in production and uniformity of quality.
Local market prices for vegetables have been rising in recent years but also fluctuating greatly, such that in the same year there are prices that vary by as much as 250%. This fluctuation stems from the disparity between the amounts produced during the rainy and the dry seasons, as well as from the lack of commitment to continuity in production on the part of local farmers. The result is continual uncertainty along the entire value chain, from farmer to end consumer and also for industrial purposes. This situation reduces the demand by consumers and local industry and also leaves farmers with too much uncertainty regarding their livelihoods.
There is a gap of 100% between the market price to the end consumer and the price received by the farmer at the farm gate, most of which remains as margin for merchants. The merchants are not sufficiently professional, however, and do not provide enough value to the farmers they serve. They do not develop the local and export markets, nor supply the farmers with guidance on what to cultivate or with training or financial assistance during the crop season. To help open the bottlenecks in agricultural production in Suriname, it is suggested that the government provide export licenses to designated companies who will work under the brand, "Suriname Farmer's Fresh" (SFF). In order to receive a 4 license, the companies will demonstrate financial stability, and will commit to providing the farmers who work with them with training, market development, brand development and credit over the course of the season. The government from its side will assist the sales companies who act as export facilitators, according to the volume of their activity and in proportion to the money they themselves invest. SFF companies will establish their own farms, and after they are stable will expand activities on their own land, while also increasing cooperation with farmers who choose to work under their guidance and according to their special cultivation protocols. A SFF company will focus its activities on producing a fresh product that suits the needs of export markets, rather than on traditionally Surinamese crops. The companies will ensure quality packaging of their product and will stand behind its quality, and thereby bring gradual change to local habits of vegetable consumption, in variety as well as in the manner that the product is presented and sold.
Suriname has a relative advantage in its connection with Holland, which is a gateway for fresh produce to Europe. According to logistics companies, even today, without special effort, there are logistic solutions that allow delivery by sea and by air to Europe and to the Caribbean Islands. With creativity and persistence by farmers, solutions such as these will continue to improve. At this stage, as long as there is no laboratory in Suriname for inspection of export products for adherence to standards, examples of each product can be sent by air for inspection in the laboratories of neighboring countries in order to obtain an export permit.
The Suriname climate allows the cultivation of vegetables throughout the course of the year, which is a distinct advantage when marketing towards buyers in Europe and the United States. In order to implement this, crops must be grown within structures, and ground must be covered with plastic mulch, both of which neutralize the effect of precipitation which causes extreme variation between seasons. A drip irrigation network completes the process by supplying water and fertilizer in precise quantities according to the needs of the plant.
It is proposed to found a farm on a plot of eight hectares, which will produce for sale in the local market and for export to the Caribbean. After it becomes 5 Business Plan for Vegetables: Open Field and Covered Crops established, the farm can expand on its own and through agreements with other farmers, and will advance to additional export markets. When the local industry is big enough, it will be possible to pass along the surplus, at the necessary quality and
continuity, to the local industry, and to further develop the food processing industry in Suriname in order to reduce imports. The proposed farm will create close to 500 tons of fresh saleable produce per year, about half of for the local market and about half for export. Besides the owners, managers and administration, the initial small farm will employ about six field workers. The number of employees will grow as production expands.
The economic calculation presumes several conservative factors, among which are full investment in the needed equipment, although the farm will most likely be established on existing infrastructure, making some of the investments unnecessary.
The plans include a tax rate of 36%, as is customary for companies in Suriname. If the government decides to give the farm the tax rate of an independent farmer, the tax rate will be 0%.
The rate of interest on the return of capital is calculated at 9% per year, according to the terms that can currently be obtained in Suriname. Funding from other sources, however, may significantly lower the interest rate.
This document presents an analysis of specific vegetables for the benefit of the proposed model farm. The attachment to this document is a dynamic Excel file, which can be used to handle changes to the assumptions of the model and to examine their effect on the results. The file will serve the founders of the project in their supervision and management during the coming years. It will also assist in the examination of different crops, or different plots of land or soil characteristics or climates, as different details can be entered and the changing results observed.
List Keywords
1.1 Socio- economic Sector (OECD) 311 Agriculture  
1.4 Target group(s) 2. SMEs/Private sector  
2.2 Production Chain 7. Marketing