Sunday, February 25, 2018

Green isn’t always better


Mark Fraser

 Is the new Caroni Green Ltd a slush fund or public relations gimmick? The “agriculture initiative” was set up in March 2013 by the Minister of Food Production as a project of Caroni (1975) Ltd to provide prepared lands, technical expertise, and a guaranteed produce market to contracted farmers. But, Caroni Green has lost millions of dollars. For the farmers contracted to grow and supply produce to the company, Caroni Green is a disaster. Among 17 Caroni Green employees racking up quarter million dollars in administrative costs monthly, not one has agriculture expertise. This was missed by the Caroni (1975) Ltd board of directors, even as it paid over $360,000 to a public relations company to make Caroni Green look good. 

At the formal launch of Caroni Green in 2013, Minister of Food Production Devant Maharaj anticipated that by December 2013 the company would have 1,800 acres of lands under cultivation at a cost of $6.8 million, with revenues of $29 million. By August 2013 the ministry reported it, “brought 5,800 acres of former Caroni lands, mainly two-acre plots leased to former workers under the 2003 VSEP”, under sustainable and profitable cultivation on a phased basis. A May 2014 draft audit report from Ernst and Young shows that only 360 acres of land were under cultivation, millions spent, and millions lost as contractual arrangements fell apart and Caroni Green became a public relations gimmick. 

Ernst and Young found the key components of good governance to be non-existent; inexperience and lack of leadership; a lack of adequate policies and procedures; and a very basic control environment with limited monitoring and no emphasis on controls or accountability. Caroni Green was heavily reliant on a “finance consultant” for its day-to- day operations and in many cases major contractual and other obligations were assumed on behalf of the company by an IT manager and administrative officer, executing as “general manager” and “operations manager” respectively. In quick time Caroni Green lost its way and no one noticed. 

A key finding related to Caroni Green’s failures in its first year is the poor quality of land preparation for farmers, requiring expensive remedial work and duplication of costs, already higher than market because of sole selective tendering. In late 2013 Minister Maharaj incorporated Caroni Green and moved to appoint a board for the company because Caroni (1975) Ltd was “not structured to operate as an active business entity” and it lacked, among other things, procurement procedures. Ernst and Young found that Caroni (1975) Ltd had adequate purchasing policies but senior employees assigned to Caroni Green claimed to be unaware of those policies. Still,  monthly Caroni Green status reports assured that “all procurement for goods and services were sourced using Caroni’s policies and procedures”. 

For farmers, Caroni Green’s failures hit their bottom line. Ernst and Young found that Caroni Green passed non-existent overhead costs to farmers. Expenses passed to farmers were inflated by 36 per cent and other critical problems soured the relationship between Caroni Green and farmers. Having spent $218,000 on a “marketing plan”, Ernst and Young found that Caroni Green really had no plan for farmers’ produce it purchased, then dumped. The public relations efforts of the Minister of Food Production ignore these facts. 

In April 2014 Caroni Green was handed off to a new board headed by agronomist Nigel Grimes. Ernst and Young has delivered proof that Caroni Green cannot run an agriculture enterprise without employees with experience in agriculture. Maybe heads will roll and the Minister of Food Production will now put the farmers’ interests ahead of expensive advertising.   

Clarence Rambharat is a lawyer and a university lecturer