It is important to establish a relationship with the Police who are nearest to your farm. They know all the characters.
One of the smarter decisions we made was to engage the cops and ask them about our potential employees. The police live and work in the community and can share the people’s tendencies.
We had engaged someone to be a part of the land clearing team. We had a total of 3 people. The original 2 man team cleared 2 acres while this newcomer cleared 1/4 acre. Now clearly this guy wasn’t there to work but to pretend to be working.
We had given him a signing bonus and intended to settle the balance once work on at least an acre was done. After discovering that he would in fact owe us money, based on his low work rate, we decided to give him a severance. He stole the coconuts on the work site and bagged them for himself for sale. The cops told us he was a thief but he was cable of honest work. They got one part right.
We went in search of this under performer today with the intention of giving severance but could not find him. We stopped by all his frequent hangouts and asked for him, to no avail. We were going to be in the area again the next day so we shrugged and called it a day.
Then he shows up at our home base unannounced asking for his money. He quoted a figure which was different from what we had anticipated. Now…this is just a basic intimidation tactic. He knows we were looking for him, our number isn’t a secret, but he goes the five to ten kilometres to demonstrate that he can find us.
I think we made it clear that we never want to see him again. Tomorrow we are going to let the police know what happened and get their advice. We are also going to pay him a visit and reinforce the message.
Don’t make our mistake. If they don’t have a phone then don’t hire them. Before making the hiring decision get an opinion from the local police. We got the opinion after engaging him, since our land lord vouched for him.
Oh, don’t trust your landlord. Trust your process.
In my native industry (Telecommunications) and perhaps in the city generally you work and then get paid.
Maybe you get a deposit to start, but most people don’t get a signing bonus or any kind of pre-work incentive. When work is complete then you get paid. Some companies work without contract or before it is finally approved because of the nature of the relationship they want to foster. Therefore they see the big picture, know the work needs to get done, and get it done while expecting the payment on the back end.
In the rural setting I learnt that the view is different. The big picture is nice but people are living day to day and are thinking short term, to the next meal. Sometimes an incentive or deposit is needed to get started, but every time you come around money must be presented. If you are coming on Thursday then they expect money on Thursday. If you don’t show up on Thursday the work is on pause- despite your deadlines.
Having a good relationship with rural farmers is critical to your success. You will fail otherwise. You already have thieves to worry about, you don’t need the farmers to turn a blind eye, especially if you don’t live in the community. Fundamental to the relationship is keeping your word and meeting the payment expectations on time. Mind you I never knew those expectations existed.
That lesson almost put us in an unfriendly spot. We agreed on a price, shared the big picture and let the work commence. We missed a visitation date (I still don’t own a pickup, poor Scubby) and work effectively stopped. We didn’t know work stopped and paid over some funds in lieu of seeing the finished product. Work didn’t continue until we visited the land, expressed our displeasure and put additional hands on deck.
Work is much further along, and I think the decision to fan the fire may have been the right one given how bad things were two weeks ago. However this could have been avoided if I understood the link between incremental visits, payments (incentives driven micromanagement) and work progress.
I understand now, and not a moment too soon.
There is a whole back story which is pretty dramatic but the cliff notes is that I did a calculation for what it would take to be the middle man and made some plans. I worked with a Gov’t Ginger Expert (GGE) in a private venture to make those projections turn into dollars. However, later in the year I realized I made a mistake. I should have divided by 5 and not 2. That’s a huge mistake.
Became I’m not a dick I decided to try to buy some of the stock from GGE to preserve the relationship. Ginger’s farm gate rate is $50/lb. I was quoted as low as $65/lb for plant material. Somehow he thought it was okay to push 6t on me at a rate of $90/lb. Let’s just say that we renegotiated.
I have set some milestones that have to be met before gets paid in full.
1) Land clearing must be finished
2) Lease must be paid
3) Plants must be in the ground
4) I must see shoots.
Seeing shoots means that the ginger is good, the climate conditions are good- the soil is good and I am able to reasonably look forward to a harvest. When all those signs are realized then I can settle my accounts.
It may seem like a dick move, but, have you ever done B2B? No one gets paid on time. I have essentially lost him as a mentor at this stage because business seems to have left a sour taste in his mouth. However, this is the difference between a farmer first and a business man first. The business man first has tight financial management, strict rules for accounts payable and decides using head, not belly.
Quick scribble about what happened to me a couple weeks ago.
We are driving from Anchovy to Bar Hill (Portland) with 2.5t of ginger. The van is not ours- we were borrowing it to save on the $6000 for transportation costs. It was a bit empty and needed some gas in it- so we figured spending $1000 was better than spending all of $6000. We were feeling so giddy about our savings that we gave the lender our brand new scale worth $2800. (Scales are important to every farmer.)
We drive along and ten minutes later are pulled over by the police! Why? Well. We are driving a van with white plates instead of green. That was a ticket valued at $3500.
The cops did not care that we were not the owners of the van with over 180k worth of produce in the back. They just cared about the colour of our plates. Maybe we looked innocent?
After having the name registered for a year and doing lots of mathematics I have finally taken deliberate steps to officially doing business in Jamaica. I have started the process of acquiring a cash secured loan and also made the first few payments to get the show on the road.
What This Blog is For
I want to document the steps involved in setting up and managing an agricultural business. Farming in Jamaica has a negative stereotype that tends to drive ‘new thinkers’ away. I believe the industry needs these thinkers to invest and grow the sector. RADA and other Government agencies make wild claims about the virtues of ginger- I am here to tell you the truth. This blog is targeted at the potential ginger investor or farmer. Watch me as I go through an accelerated learning process- and feel free to ask questions and comment along the way.
What I Won’t Do (Initially)
I am working with a core team of professionals but the only name that will be bandied about is mine. In the pictures that will follow they may/may not be identified. It is important that the have some protection during the first year- and free themselves from small minded persecution. Those that may have no such compulsions, like the farmers of Reach and Kensington, may freely photo-bomb.
I won’t share dollar figures that relate to actual expenditure during the year. I will share percentages over forecast or under, I may share market data on prices- but I won’t tell you that I spent a specific amount on a specific item. I do, however, want to open up my profit and loss statement as well as the balance sheet (and a few accounts) to scrutiny at the end of our financial year. This data will come out- but only to those who are patient till the punch line.
- The aim is to apply commercial and corporate expertise to the rural Jamaican farm with a view to making a sustainable profit. I want to make a case for a new form of Capitalism that positively affects the community it inhabits while making a profit for it’s investors.
- In our first year our most basic target is to break even. We are building a business that can break even at the farm gate rate. (The farm gate rate is the lowest selling price available in the local agricultural market. It is like minimum wage and is set by the Government.) In essence, after the investment and other costs are tabulated we would be satisfied with being no worse off than when we started.
- Our stretch target for the first year is to make a 20% profit. As we go along I will share the kind of circumstances required for us to make that kind of return.
- In five years we want to be the largest manufacturer and seller of Ginger products from the North-East Region of Jamaica (St Mary, Portland and St Thomas). We want to not only be capable of supplying local and international markets with fresh ginger- but also with dried ginger, liquid concentrate and ginger oil. We want to diversify into other segments of the agricultural sector and be a market leader as well as have direct control of the value chain our customers would otherwise subcontract or outsource. Finally, in five years we want to switch from being a sole trader to a publicly traded company on the Junior Stock Exchange.
And now, let’s begin.