The client is a publicly listed plantation companies in Asia, with its principal activities as plantation for agrofood. In view of the persistent food security issues in its home country and several neighboring countries, the client is envisioned to commission a national agriculture programme that would resolve the food security issues via public-private partnership model.
This programme will be led by private sector, with key government agencies as the project promoters to facilitate collaboration among private sectors. With this vision, the client is aspired to formulate a concept business plan that outline the programme details, including the partnership model, focused agrofood products, implementation roadmap, investment returns as well as other pertinent aspects of the programme to make it a success.
FULL STORY
Food security has always been an issue for the home country of the client’s company. The persistent food trade deficit and low self-sufficient ratio (SSR) have been worsening over the past decades and there is no apparent solution that seems to be effective. If left untreated, the food security issues could turn into a crisis and affect the economy structure of a country in the long term.
Various factors had contributed to this situation, such as the lacking of suitable farm land, low farm productivity, lack of labour and low profitability of the agriculture industry. Most of these can be addressed with the adoption of suitable agriculture technology (agritech). This could be further enhanced with certain level of government facilitations and supports.
The client feels the need for a national level programme that foster collaboration between farming companies for better coordination in agrofood productions to ensure offtake of targeted agrofood at larger scale. With the above objectives, the client has engaged us to assist in the formulation of the National Food Security Programme that would guide the project execution.
KEY OUTCOMES
The team begins with a detailed macro-economic analysis on the global agriculture and agrofood industry. Our assessment looked at the key industry trends that will drive global food demands as well as critical industry challenges that are inhibiting the industry growth. The initial assessment provided several directions for the study team to deep dive in subsequent study on the demand and supply gaps.
Leveraging on the international database available for global food import and exports statistics, we have conducted a more in-depth analysis that evaluate the value and volume of each agrofood products produced and consumed by the targeted countries over the last decade. This have formed a basis for us to better forecast the food consumption pattern in next ten to thirty years.
As part of the process to shortlist suitable agrofood to be produced under the programme, our team have developed a proprietary agrofood selection framework that looked at demand trend, natural resources & environmental perspective, and farm scalability. The outcome of this framework was a basket of highly potential agrofood that can be produced locally at large scale and profitably.
Another critical aspect that would determine the success of the programme is the agriculture land. Farming land has always been a challenge to the local farmers and it was reported that the local government intervention is needed in order to resolve the challenges faced. In this regard, we have proposed a Public-Private Partnership model where the respective state government could participate in the programme by providing certain quantity of agriculture land, in return for the business profits. Various other investment options were proposed to allow the participation of private sector investors as well.
Agritech have been identified as one of the key success factors of the programme. The farmers in targeted countries are mostly adoption traditional farming method which are labour intensives, obsolete and not competitive as compared to the advanced agrofood producing countries such as Australia, USA or Japan. Working with our digital team from 27Digital and our strategic partner from IRGA, we have identified specific agritech for each of the shortlisted agrofood. These agritech could fundamentally transform the agriculture & farming process, resulting in tremendous improvement in productivity and quality in an integrated farming environment.
Due to the large project scale and high requirement for infrastructure, it is imperative to justify the infrastructure investment to the government authorities. To this end, we have developed a programme level financial model and socio-economic model at generic farming size. This financial model quantified the programme benefits, providing indication of project investment return, farmers’ income uplift, GDP uplift and tax income generation.
By the end of the project, we prepared a time-phased implementation plan that guide the client through the programme implementation and incentives application process to obtain government endorsement on the programme.
Important Notice:
*We take our clients’ confidentiality seriously. While we keep their names anonymous, the results are real.
*This project was jointly delivered by 27Group and our strategic partner IRGA.
