Issued : Wednesday, April 30, 2014 12:00 AM
Can Puerto Rico revive agriculture?
By : HÉCTOR MONCLOVA VÁZQUEZ
Edition: May 1, 2014 | Volume: 42 | No: 16
80% of food consumed in Puerto Ricois imported; 90% of that could be grown on the island
Agriculture, an industry that was considered the only creator of jobs in Puerto Rico’s economic development before the 1950s, is today forgotten due to vast economic and social changes. In fact, the island’s agriculture has plummeted during the past 100 years from output that represented 71% of gross domestic product (GDP) in 1914 to a mere 1% in 2014—and jobs in agriculture dropped from a high of 263,577 in 1930 to 19,000 today.
Those numbers point to a downward trend that is particularly disturbing, especially when we understand that a boost in local agriculture is essential to lowering a food import rate totaling 80% of what is consumed on the island. That staggering number represents expenditures of $3.5 billion to $4 billion annually at wholesale value, according to Puerto Rico Planning Board estimates. If local agriculture were developed to its full potential, we could replace 90% of those imports, and the $7 billion a year in locally-produced food sales at retail prices could contribute greatly to the island’s economic recovery.
According to experts in agriculture, Puerto Rico, with the right public policy, is capable in the long run of generating 90% of the food the population consumes, and could be producing 40% to 50% of the food consumed locally within a short time and keep growing from there.
If Puerto Rico were able to replace 90% of its agricultural imports with locally grown produce, it would represent about $3.15 billion that would stay in the island’s economy and around 85,000 new jobs in the agricultural sector.
It would also lower the cost of food by eliminating outside of Puerto Rico’s sellers and handlers and reducing transportation expenses.
As of 2011, about 27% of local food consumption comprises meat and related products, the largest portion of food-related expenditure. This is followed by 24.7% spent on fruits and vegetables and 11% on dairy and related products, according to a study by planning, financial consulting and market strategy firm Estudios Técnicos.
Recent studies by the Chamber of Food Marketing, Industry & Distribution indicate that Puerto Rico’s consumers favor the freshness of local products and would buy local if these were consistently made available on a broad scale. Studies have also shown that for every dollar spent on local agricultural products, 70¢ stays in the local economy.
For that quick turnaround to take place, Puerto Rico would have to make the best use of its fertile soil and implement public policy to help farmers become profitable through technological innovation and more effective marketing and promotion.
With farms operating as businesses, the demand for agricultural laborers will grow. However, even though the island faces an unemployment rate of about 15%, half of its coffee crop hasn’t been harvested in recent years due to a shortage of laborers, representing a loss of about $17 million a year. Yet in the metropolitan areas, there are tens of thousands of people unemployed and willing to work.
ANSWERS IN TECHNOLOGY
Agriculture Secretary Myrna Comas Pagán explained that some proven technologies are made accessible by the agency to farmers through the Administration for the Development of Agropecuary Companies Investments Program. “We grant 50% of the investment, up to a maximum of $250,000, to bona fide farmers, and there is financing through the Agropecuary Innovation & Development Fund to promote projects that involve different technologies,” Comas said.
Among the resources available, she mentioned, are methods encompassed in what is called protected agriculture. This means protected environments in which conditions regarding light and water are controlled through shadow houses and hydroponic systems, in which plants are grown in nutrient-rich solutions or moist inert material, instead of in soil. In these protected environments, the use of water is optimized; it improves control over pests and plagues, and the overuse of fertilizers. Under these controlled conditions, vegetables could grow with more harvests per year, so the products could reach competitive volumes and prices.
“There is a myth that local products are more expensive; however, when in season, our onions and peppers are less expensive than the imported product. A weak point in the vegetables industry, though, is that farmers provide their products mostly from February to May. And in the distribution-buyers chain, there is a certain resistance to buying local products because there is no guarantee the products will be available the whole year. With protected environments, we could grow crops like that beyond their regular season so we could enhance our competitive edge,” the secretary said.
Under the same program, farmers can use sophisticated, high-tech tools such as plows and sowing machinery that uses geospatial information system technology, which is based on computer systems designed to capture, store, manipulate, analyze, manage and present geographical data. This system is considered a “game changer” in the agricultural industry, and has now become an indispensable tool because the information it gathers shapes the most optimal use of land possible.
With the coordinated efforts of the Agriculture Department and the College of Agricultural Sciences of the University of Puerto Rico (UPR), local farmers could have access to the latest research to maximize productivity and resistance in seeds, and manage plagues with chemical and biological control.
A PRIVILEGED ISLAND
Puerto Rico has been blessed with the most favorable factors for agricultural diversity. Its geographical, geological, topographical, agronomical and meteorological conditions, which are different from region to region, are ideal for a great variety of crops.
According to the Federal Soil Conservation Service, there are more than 350 types of soil—one of the most vital factors, along with water— in various grades of humidity and degree of acidity or alkalinity, which are grouped in 115 categories according to similarities in their composition. The constant temperatures of tropical weather (according to the National Weather Service, the island has an average year-round temperature of 82 degrees Fahrenheit, fluctuating between 78 degrees and 88 degrees, with extremes lower in the mountain areas) and rainfall levels, which peak from March to May and from August to November, also allow more harvests per year. This fact has been attractive for bioagriculture companies because more harvests a year (between three and four, while only one harvest can be obtained in most of the mainland U.S.) allow for a more prolific development of seeds—their merchandise.
Though temperature is constant due to an array of factors, such as topography and air-current patterns, it has a wide variety of effects depending on the region. These also affect the level of precipitation in different parts of the island (a yearly average of 70 inches of rainfall in the north and 45 inches in the south), producing humid, semi-humid, arid and semi-arid zones.
The best agricultural regions of Puerto Rico can be found in the coastal plains, the Lajas Valley and valleys of the central region, such as La Plata River in Cayey and the Caguas Valley.
Given these factors, an agricultural map of the island has been organized according to the crops that could best grow in different regions. For example, while the humid lowlands and midlands are good for growing pineapples, plantains, bananas and pigeon peas, the humid highlands are ideal for growing coffee and citrus, as well as for raising cattle. (See agricultural map on page 19).
Nevertheless, the island continues to import the great majority of these products. Secretary Comas has a plan to reverse that trend—not only because of the billions that it could represent for economic development, but also because Puerto Rico’s food security is fragile.
PRIORITY: FOOD SECURITY
For Comas, food security is the key phrase for a public policy that at the same time would boost the agricultural sector.
“Since agriculture is the origin of all food, enhancing food security must be the mission of our department,” the secretary said. “We could evaluate it from different perspectives, and one of the angles we are working on mostly is with food availability, including where the food Puerto Ricans consume comes from and how it reaches their tables.”
Comas, who was a professor in the Department of Agriculture, Economy and Rural Sociology at the UPR’s Mayagüez campus, said that securing an ample food supply is an issue she has thoroughly studied. “My Ph.D. dissertation was about the vulnerability of our food chains, where we are almost totally dependent on imported products [mainly from the mainland U.S., followed by China, the Dominican Republic and Costa Rica, among others], traveling thousands of miles from their points of origin. And since there has been a series of events that could put production at risk as well as food distribution, such as natural disasters and threats from climate changes we have been experiencing, it is urgent to establish agrarian policies focused on ensuring the availability of food by producing it here.”
And shipping experts agree a natural disaster, such as an earthquake, could affect the island’s capacity to transfer products from ships, which would cause a food shortage before the ports became fully operational again. Comas talked to CARIBBEAN BUSINESS about less dramatic conditions that could still do harm to the consumer’s capacity to acquire food products. “For example, there is the possibility of a new increase in the price of rice because of the drought in the western U.S., which could lower supply and increase the price. And that is why we are trying to establish strategies to enhance local production,” she said. California’s Sacramento Valley produces 2 million tons of rice a year, and is the main provider of rice consumed in Puerto Rico.
NEED OF LANDS AND CONSUMERS’ HEARTS
Comas explained that during the first months of her administration, the Agriculture Department made an inventory of the agricultural lands that the government owns or controls through the Land Authority, the Family Farms Program and the Puerto Rico Agricultural Reserve.
“We are talking about 204,881 acres as a result of the recently approved amendments to the 550 Land Use Plan Act of 2004, which guarantee a minimum of 582,600 acres [600,000 cuerdas] for agricultural use. Then we calculated the local consumption of food and distributed it between what is imported and what comes from local production. Then we went, product by product, calculating the available land with the type of soil needed for each one and the available water,” Comas explained.
The needs vary from crop to crop. For example, to be self-sufficient in producing rice, Puerto Rico would need around 24,000 acres, which the secretary said aren’t available, given those acres in which rice would be grown are in the coastal plains, which are used for other important crops such as bananas, plantains, tubers and tomatoes, as well as seeds, fodder for cattle and livestock.
“We could start with at most 1,456 acres [which is what is available for rice], and we have approached farmers to participate in the program,” she said. The farmers who are currently raising vegetables, plantains, bananas, fruits and cattle are being approached to cede some of their land for rice production to secure more acres for rice, Comas stated.
The secretary said that equally as important as enhancing local production is that Puerto Rico consumers decide to buy locally grown food.
Since there are local agricultural sectors with great demand that have gone through hardship due to the lower price of imports, such as poultry in the late 1990s (after Hurricane Georges, imported unfrozen poultry was allowed to be sold as fresh, thus ending the niche of 45% local consumption of poultry provided by 220 local farmers), Comas said there are ways to protect a number of sectors while they grow.
“We have institutional markets over which the government can exert control. And acting under protective laws, we can calculate the demand for those products in those niches such as, for example, school lunchroom meals,” she noted.
Comas said 60% of public-school lunchroom meals, with a value of $55 million, are from local products. Among them, she mentioned, are locally grown products such as pineapples, papayas, mangos, cantaloupes, cassava, melons, bananas, oranges, tangerines, sweet potatoes, yams, plantains, lettuce and pumpkins, as well as pasteles with pork, pork burritos, fresh pork meat, chicken, fresh and processed beef, fresh and processed hamburger meat, and eggs. Other products that will be a part of lunchroom meals are locally grown rice, orange juice, cucumbers, fruit purée and barbecued ribs.
About taking the Puerto Rican products to consumers’ tables, Comas assured that study after study by the UPR has shown that consumers prefer local products, associating them with freshness and quality. However, most of the time, there is no way to determine which items are the locally grown products, and often these aren’t available at the moment, she said. “We have to impact those areas with marketing strategies such as reviving the Marca País seal, which enjoys a wide reception among consumers and the different components of the food distribution chain.”
The Agriculture secretary also stressed that it is incorrect to assume the imported product will be automatically less expensive, as in the case of local onions and peppers.
Other marketing strategies the agency is implementing are:
—Establishing marketing networks among farmers, supermarkets and food-service chains interested in supplying vegetables such as lettuce, tomatoes and cucumbers for their markets.
—Opening Family Markets where farmers could sell directly to recipients of the federal Nutritional Assistance Program for needy families.
—Launching marketing initiatives focused on taking consumers directly to farmers, such as La Ruta del Pescado, a marketing strategy that includes training in entrepreneurship skills and the creation of a webpage and a mobile application to let consumers know about the location of fishing villages around the island and the products available (See sidebar).
—Participating in international fairs and expositions through the Integral Fund for Agricultural Development, which sponsors local companies to attend agricultural fairs around the world.
Comas said the department is also in talks with local hotels so they may offer seasonal products on their restaurant menus. The gastronomic sector represents 44% of the local food industry, she said, which is mostly supplied by imports.
There are about 7,000 restaurants in Puerto Rico. For the chefs who work at these establishments, fresh food produced on local land would be their first choice, instead of having to rely on imported food from the States, Spanish and French markets.
Although the bioagricultural industry, which develops seeds for large crops with industrial uses such as soybean, corn and cotton, is a $35 million-a-year business, Comas doesn’t see it as contributing much to the equation in terms of the agenda of the government agency she directs. She explained that the weather and soil composition allows three to four harvests a year, which would give companies a competitive edge for their products. However, the secretary admits that the department doesn’t do much with them (about nine bioagriculture companies in the entire island) because, “as they expand their operations, they rent directly to the farmers.”
PUSH FOR SUGARCANE
The Puerto Rico Industrial Development Co. (Pridco) and the Agriculture Department are promoting a strategic project aimed at growing 19,424 acres (20,000 cuerdas) of sugarcane in the Coloso, Añasco, Guanajibo and Lajas valleys to ensure the production of high-quality molasses needed by the island’s rum industry, the world’s largest producer of rum.
Pridco opted to promote the project to ameliorate the skyrocketing increases in molasses’ prices and a decrease in the product’s quality, something that could affect future local rum production. The government is investing $9 million to provide the land and cane stock needed, and has put out requests for proposals with the world’s largest sugarcane growers to invest $172 million in the project and receive benefits under Law 73.
“This project will create more jobs, improve rum production costs and increase local Treasury’s revenue through increased rum rebates,” Pridco Executive Director Antonio Medina said. “This is a strategic bet.”
To date, the government has planted 971 acres (1,000 cuerdas) in the Coloso Valley, which should be ready for harvest in 2016 since it takes three years for sugarcane to mature, Medina said.
Once fully up and running, the project is expected to grow 800,000 tons of sugarcane that will produce 20.5 million gallons of molasses worth $51.2 million, and generate 43.2 kilowatts of electricity worth $6 million. The project will cover 80% of local rum producers’ need for molasses.
Increased rum production also will result in a projected $30 million in rum rebates, which now glean Puerto Rico $325 million a year. The project also is expected to create 1,000 direct and 3,000 indirect jobs in 10 poverty-stricken municipalities in the southwest region of the island, Medina said.
“This project is win-win all around. It will create a virtuous circle,” Medina said, noting 20% of Guatemala’s electricity is produced with sugarcane.
TO WORK THE LAND
In Puerto Rico, agricultural activity has suffered from a stigma related to a general perception of misery and hard work with low pay.
Though Comas admitted there is a shortage of labor (in past years, $17 million a year has been lost in coffee harvests due to a lack of personnel), she said the way agriculture is perceived has been changing, although slowly.
“In terms of direct jobs generated, it is estimated there are 19,000 people working in the agricultural industry today. To that, you have to add 13,000 self-employed farmers and their relatives, who work the farms without being registered as employees. In general, we are talking about 40,000 people involved in agricultural activity. For each job generated in the farm, there is a multiplying effect of 2.5 jobs generated outside the farm, so we could see 100,000 people involved with agriculture. And the number is growing since we are seeing a lot of young people who are interested in becoming involved in agriculture either as entrepreneurs or as workers,” she said.
Comas explained there is a strategy for educating people about agricultural labor as something dignified, and that unlike the general perception, it is a job that generates enough income to sustain a household. “It was thought that the hourly wage in agriculture was $5.25, but after some research, we have found that workers in the agricultural industry earn $6 to $6.50 an hour. And there are certain benefits because employers provide transportation to the work area, breakfast and lunch, and some of the farm products. A lot of people ask me, ‘Are there really people who want to work with agriculture?’ I invite them to the sugarcane project in the Coloso Valley in Aguada, where there are about 30 young employees between ages 21 and 30, who will tell you, ‘We work hard here, but we have jobs.’ They have a sense of belonging to the project.” She added that as the project grows, another 150 direct jobs could be created.
The secretary explained that part of the growing interest in agriculture is due to the training the Agriculture Department is offering workers, which was previously only focused on farmers. “But since they are the ones who work the land, it is logical to teach them about their trade. We are also giving those people training in the fishing industry, where it has the same empowering effect,” she said.
For Comas, there are two main crops with the best chance of competing in markets abroad. One is the local mango, which has received an “excellent” rating in Europe.
In Puerto Rico, about 4,000 acres of land are exclusively used for exportation in the southern municipalities of Santa Isabel, Juana Díaz, Ponce and Guayanilla, contributing about $8 million to the local economy and creating nearly 700 jobs. “Mango producers have a great opportunity to have a stronger presence there, but there were some problems about maritime logistics,” Comas said. For years, there was insufficient space assigned for the maritime transportation of the southern-produced mangos, which reduced the volume and revenue, shrinking the sector to less than its potential. “We were working with them and with local shipping lines until we identified routes that are going to make it easier to reach Europe, enhancing at the same time the potential to have a larger production locally.”
The other crop is coffee. “For coffee growers, we are working on different projects to provide their product with the denomination of origin because everybody around the globe talks about Puerto Rican coffee, but people don’t know where and how to get it. And we are taking our coffee growers to international trade fairs, where the product is exposed and where they have been able to establish international market networks,” Comas said.
An example of this is that last August, Puerto Rican coffee companies Hacienda San Pedro and Offecay Inc., sponsored by the Agriculture Department, debuted at the 2013 Specialty Coffee Association of Europe Show, held in Nice, France. At the event, the island was positioned as a great producer of specialty high-quality coffee, exhibiting on par with countries such as Brazil, Honduras, Colombia, Jamaica, Guatemala, El Salvador and many others in Africa.
“We have done this with the help of the Puerto Rico Commerce & Export Co. to establish distribution centers for Puerto Rican products in New York. We are sharing this information with farmers in other crops to motivate them to grow their products in amounts large enough for exportation,” the secretary said.
—CARIBBEAN BUSINESS editorial staff contributed to this story.
PERKING UP THE COFFEE INDUSTRY
In the second half of the 19th century, Puerto Rico would become the fourth-largest coffee-producing area in the hemisphere and the producer of the most-sought- after coffee, to the point that the island’s coffee would become the favorite in the Vatican and Royal Courts of Europe.
From the 1870s to 1900s, the golden age of the island’s coffee industry took place with about 1,000 plantations, some of which were self-sufficient towns, producing 60 million pounds of coffee, and reaching a peak of 77% of revenue from exports. The dropping of coffee prices at the end of the 19th century, stagnating of international demand and booming production of Brazilian coffee ended that momentum.
The industry since then has been mainly a domestic one and has gone through its ups and downs. Last year, Puerto Rico produced 8.4 million pounds of coffee, meeting only about 25% of the 33 million pounds of local demand. Nevertheless, coffee remains an important agricultural sector that impacts about 26 municipalities islandwide.
Puerto Rico Coffee Roasters (PRCR), a company that owns 11 brands of Puerto Rican coffee, among them seven of the major ones, opened the largest coffee-processing plant in the Caribbean in May 2011. The company’s initiatives are helping to perk up the local coffee sector.
That is why at the Marqués community in the Algarrobo Sector of Vega Baja, in what was previously an illegal dumpsite, the company, with help from the Agriculture Department and the University of Puerto Rico, has established a nursery for coffee plants. The coffee plants are the result of crossbreeding and have been enhanced in quality, fruitiness and resistance to elements, different terrain and harmful organisms. The initiative plans to sow a million plants to cover all local demand and produce enough volume of high-quality coffee for local consumption and export.
The fruits of this effort are to be shared among all coffee growers, said Germán Negrón, director of PRCR’s agricultural affairs.
“We have here 243 acres with plants sowed and another 97 acres in Maricao. We want all companies involved in coffee to know what we are doing at Coffee Roasters and participate in what we are doing,” he said.
Negrón said the project is so creative that it is establishing protocols that are being closely monitored by the U.S. Department of Agriculture to be later implemented in other coffee-growing areas such as Hawaii.
“We have to create a huge positive impact on our communities, the coffee industry and our land,” he said.
The project, which was established four years ago, has created 80 direct jobs and, when the coffee harvest comes between November and December, is expected to provide employment for about 700 people.
PRCR has implemented other measures to help the industry, such as establishing an eco-sustainable coffee-processing plant and a market in Lares, near coffee growers in the mountain region, where the company buys about $15 million worth of coffee a year from farmers.
RESTAURANTS BUY FRESH AND ECOLOGICAL
Gustavo Antonetti and Paulina Salach are co-owners of Spoon Food Tours, the highest-ranking culinary tour company in Puerto Rico, and are also the creators of the Puerto Rico Restaurant Week, a showcase of the different gastronomic alternatives throughout the entire island. One of the best features of the event is that many of the ingredients used by the chefs from the participating restaurants come from Puerto Rico’s small farmers.
“Last year, we started the initiative of backing up local agriculture, especially small farmers. So, we began to connect restaurants with the most consistent farmers we could identify. Then we put as a requisite that in at least one of the plates each chef would use local ingredients and, if possible, ecological ones. And the response was great. Every restaurant complied and at the end, everybody took notice of how huge the difference was,” Antonetti said.
This year, on May 14- 20, about 40 restaurants will use seven or eight local farming operations, preparing dishes that use local ingredients, such as La Vista’s braised short ribs, served with apio (celery root) purée, market vegetables and a Cabernet Sauvignon sauce, and Pamela’s French cut pork chops, with crusted yuca (cassava) mofongo and sun-dried tomatoes, topped with a guava-ají dulce (sweet bell pepper) chutney.
PROVIDERS OF THE BORICUA FLAVORS
Two of the local farming projects which are participating by supplying fresh ingredients to the restaurants are Frutos del Guacabo Inc. (FDG), and Siembra Tres Vidas.
Frutos del Guacabo, a company founded in 2010 by husband and wife Angelie Martínez and Efrén Robles, connects local farmers directly with clients, helping with the distribution and consumption of local products. The main market for FDG is the gastronomic sector in metropolitan San Juan, which depends in part on tourism, but also consists of providing fresh vegetables to Wal-Mart and Sam’s stores. It works as an agricultural cooperative in which eight farmers are involved plus some 20 to 30 employees, creating from 15 to 20 indirect jobs. There are farms of one to five acres for a more traditional agricultural setting, and farms of less than one acre to work with hydroponics, which grows plants using mineral-rich solutions, in water, without soil. FDG has a five-times-a-week delivery service to guarantee freshness, all achieved with the efforts of eight farmers who ensure a steady supply for clients.
Siembra Tres Vidas was founded in 2007 by Silka Besosa, who moved from her home in San Juan to Aibonito, where she established a farm with her daughters, Daniela and Tara, and neighbor Edwin Rosario Soto. At Siembra Tres Vidas, the agricultural methods that are used focus on the preservation and enrichment of the terrain, such as crop rotation and contour plowing, using only 100% ecological seeds and no chemicals at any stage of the process.
The company, along with three other employees, grows different types of lettuce, carrots, tomatoes, cooking herbs and edible flowers, producing about 140 pounds of these products a week.
Farm Director Daniela Rodríguez Besosa explained that employees earn $7 to $10 an hour, plus a share of the farm products, making them, she affirms, the highest paid farm workers in Puerto Rico.