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Attribution - Please cite the work as follows: “Boyer Mary, Horton John, Millán María Florencia, Grosjean Christophe Frederic Robert, Arias Ramón Ernesto, Lopez Elena Mora, Wrede Peter, de Kort Rendell Ernest, Justiniano Ivelisse and Chapman Regis. 2020. ‘Building Resilience in Aruba’s Food Security During the COVID-19 Pandemic and Beyond.’ World Bank: Washington D.C.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover photo: Aerial shots Sketch Advertisement N.V. Aruba © photo by Roberto Arismendi - Design & Layout by Natalia de Windt 6| Prepared by a team led by Mary Boyer (Disaster Ri s k Ma n a g e m e nt Sp e c i a l i s t , Wo r l d B a n k) a n d comprised of John Horton ( S r. Agriculture Consultant, Wo r l d Bank), María Florencia Millán ( S r. Agrologistics Consultant, Wo r l d Bank), Christophe Frederic Robert Grosjean (Ag r i c u l t u re Sp e c i a l i s t , Wo r l d B a n k) , Ra m ó n Er n e s t o A r i a s (Ag r i c u l t u re Sp e c i a l i s t , Wo r l d Bank), Elena Mora Lopez (Agriculture Analyst, Wo r l d Bank), Peter Wrede (Insurance Risk Consultant), Rendell Ernest de Kort (Economist C o n s u l t a nt , Wo r l d B a n k) , I ve l i s s e Ju s t i n i a n o ( D i s a s t e r Ri s k Ma n a g e m e nt C o n s u l t a nt , Wo r l d Bank), and Regis Chapman (Head of Office, Wo r l d Fo o d P ro g ra m m e B a r b a d o s) . |7 Table of Contents 11 ACKNOWLEDGEMENTS 13 EXECUTIVE SUMMARY 17 ANALYSIS AND STRATEGIC GUIDELINES 17 Exogenous Shock to Aruban Economy 18 The Parameters of Aruba’s Food Supply Chain 19 Two Separate and Complementary Pillars of Aruba’s Proposed Food Security Strategy 19 Pillar 1: Commercial-Scale Food and Agriculture. 19 Pillar 2: Widespread Micro-Scale Residential Producers. 20 Implications of Country Factor Endowment on Optimal Production Models for Pillar 1: Commercial-Scale Food Supply Chain Businesses 21 Implications of Country Factor Endowment on Optimal Production Models for Pillar 2: Residential Producers 22 Strategic Guidelines to Design Aruba’s Food Security and Economic Resilience Program 23 Note on the Balance Between the Local Production Strategy and National Approach to Importation 25 PROPOSED PROGRAM INTERVENTIONS 26 Component 1: Investing in Commercially Viable Expansions and Start-Up Enterprises 26 Scaling the Level of Intervention for Component 1: Commercial-Scale Food & Agricultural Businesses 26 Component 2: Promoting and Investing in Micro-Scale Home and Community Production 27 Scaling the Level of Intervention for Component 2: Micro-Scale Home and Community Production 27 Component 3: Institutional and Policy Support to Local Food and Agricultural Productivity 29 Component 4: Linking farmers to consumers and HORECA channels and promoting genuine gastronomy 31 CROSS-CUTTING THEMES 32 Farm-to-Fork model: Tourism and Linkages to Local Food Production and Agricultural Systems 34 Relevant Lessons Highlighted by the Case of the Islands of São Tomé and Príncipe 34 Food Safety and Quality Assurance Standards 35 Investment in Education and Training 35 The Productive Alliance Approach 39 PRELIMINARY ANALYSIS OF AGRO-LOGISTICS IN ARUBA 39 Key messages 40 Aruba Trade and Connectivity 44 Agro-logistics in Aruba 48 Assessment of agriculture related risks. 49 ​FUNDING LEVEL SCENARIOS 50 Pillar 1: Commercial Food or Agricultural-Based Enterprises 51 Pillar 2: “Backyard”, Rooftop and Community Micro-Producers 52 Institutional and Policy Support to Pillar 1 & 2 8| Contents |9 ACKNOWLEDGEMENTS • Building Resilience in Aruba’s Food Security During the Pandemic and Beyond is a World Bank rapid assessment developed for the Government of Aruba (GoA) to support its policy response post-COVID to bolster food security. This report is the output of rich dialogue and exchange through long distance digital technology with a number of institutions and individuals in Aruba. This work is part of the Technical Assistance Program for Disaster Risk Financing and Insurance (DRFI TA) in Caribbean Overseas Countries and Territories (OCTs) to enhance long term financial resilience to disasters in Caribbean OCTs, to the benefit of the most vulnerable. • The DRFI TA in Caribbean OCTs is a partnership between the European Union (EU), the World Bank Group, and the Global Facility for Disaster Reduction and Recovery (GFDRR). The program is part of the EU-funded Caribbean OCTs Resilience, Sustainable Energy and Marine Biodiversity Program (RESEMBID), implemented by Expertise France, the World Bank Group and GFDRR. A World Bank team carried out this work in cooperation with Aruba’s Department of Economic Affairs, Commerce and Industry (DEACI), Department of Agriculture, Livestock and Fishery (Santa Rosa), Ministry of Ministry of Finance, Economic Affairs and Culture (MFEAC) and Ministry of General Affairs, Integrity, Government Org., Innovation & Energy (MGAIGIE) and the Minister plenipotentiary of Aruba in the United States. • The World Bank team would like to thank in particular, Mrs. Maria Dijkhoff-Pita and Mrs. Nathalie Maduro and their dedicated teams for their support in data collection and technical guidance. The World Bank team appreciates the inputs provided by World Bank peer reviewers Diego Arias and Marlon Rawlins. The report also greatly benefited from the input of key stakeholders, that have collaborated or assisted the WB team. Organizations AIB-Bank N.V. Metabolic Foundation Aruba Hotel and Tourism Association Office of the Minister Plenipotentiary for Aruba Aloe Balm N.V. Aruba (Washington) Aruba Banking Association Office of the Minister of Education, Aruba Gastronomic Association Science and Sustainable Development Aruba Tourism Authority Petite Greens Aruba Aruba Trade and Industry Association Stichting Qredits Microfinanciering CEDE Aruba Aruba Central Bureau of Statistics SDG Aruba Centrale Bank van Aruba Social Economic Council (SER) Aruba Chamber of Commerce and Steering committee Recovery & Industry innovation Cooperative Agricula Aruba Stichting Chanita ta di Fiesta (i.o) Department for Infrastucture and Stichting Rancho Planning Task force Food security Directorate of Nature and Environment United Farmers Aruba Elmar University of Aruba FAST collection & delivery services N.V Utilities N.V. FRASA international trading N.V. Vertegenwoordiging van Nederland in Futura foundation Oranjestad Giannis Group WEB NV Goshen Sustainable Development VBA World Food Programme Caribbean Guardian Group Santa Rosa -Department of Agriculture, Insurance Association of Aruba Livestock and Fishery Acknowledgements | 11 12 | EXECUTIVE SUMMARY A strong agriculture sector and food security system can diversify the economy and systematically strengthen national capacities to better manage risk and recovery from exogenous and endogenous shocks and enhance climate resilience. The severity of the COVID19 shock has created an opportunity to rethink economic strategy in ways that not only help manage risk but can provide the stimulus to investing in new ways to create sustainable jobs. These jobs can improve livelihoods and quality of life, the environment, and national cultural identity. A sustainable food security strategy in Aruba can be grounded in two pillars: i) commercial-scale food and agriculture based on a particular set of business expansions or start-ups that can function as viable and profitable food and agricultural businesses in the resource conditions presented, and ii) widespread micro- scale residential producers that are highly efficient users of land and water, incorporating climate-smart techniques and devices, and applying proven production techniques. Each pillar must consider different factor endowments for optimal production, including land, water, growing medium, technology, energy, labor and know-how, capital and financial requirements, as well as a market opportunity. Strategic guidelines can steer the development of each pillar and the overall resilience of the agriculture sector. These include a strategic public communication campaign to increase local production, enhancing demand for local produce, enhancing quality standards for local produce, incentivizing experimentation in production, involving youth, pioneering innovative technologies, leveraging access to global research and resources through international partnerships, and continued analysis and assessment of production in order to better understand results. Executive Summary | 13 Activities under the strategy Examples include the establishment of agricultural research can be divided into four components: and development alliances between relevant international institutions and increased coordination between domestic 1. Investing in Commercially Viable Expansions and Start- non-life insurance providers and the government to facilitate up Enterprises through identifying, vetting, and selecting access to insurance coverage for new and existing producers. individual investment projects, developing business plans (BP) to fund clients for start-ups and expansions, and conducting 4. Linking Local Farmers to Consumers and HORECA follow-up and evaluation functions. The funding mechanism Channels and Promoting Genuine Gastronomy could benefit currently under construction may be referred to here as “Agri- Aruba by achieving a level of local provision of food and Bank.” elevating tourist experiences. Based on the experience of restaurants and hotels that are sourcing food locally, further Examples of expansion include wholesalers or distributors analysis should be done to identify potential aggregators that investing in food-processing, or supermarkets incorporating could assure the consistency of products. production on their premises. An example of horizontal integration across fields might be a fishing enterprise investing Examples include promoting forward and backward linkages in aquaculture, or a hotel or restaurant group investing in a craft of agro-processors by further developing skills for the agro- brewery or local juice production line. Start-ups include investors processing sectors and promoting investment and alliances to not currently involved in the food or agricultural business currently put those skills to work. Local farms that house these facilities but who see a business opportunity to launch one, perhaps using create a new attraction for visitors wanting to experience a new technology. Bio-technical start-ups include those working tours. in tissue culture, algae production, mica-culture, or animal and plant health protection products or services. The development of Several cross-cutting themes arise that warrant further essential oil fragrances and flavorings, as well as medicinal plant exploration and consideration in strategy development. First, extracts or cosmetic products, also falls in this start-up group. a multi-faceted ‘Farm to Fork’ model can exploit global tourism trends, establish relationships between producers and 2. Promoting and investing in Micro-scale home and restaurants, boost demand for locally processed food items, Community Production, beginning with public outreach and and increase revenue by creating agro-tourism ‘experiences,’ promotion of the national initiative to expand agricultural and linking food and culture. Relevant ‘good practices’ can be food production activities. While the first focus will likely be home gleaned from the experience of São Tomé and Príncipe. With gardens or animal husbandry, it should also include simple food the proposed expansion of domestic agricultural production, processing or preservation techniques for home-consumption or significant resources must be devoted to food safety and sale. Activities will maintain and build over time an array or menu quality assurance standards, as well as education and of micro-scale technologies and production systems. training. Examples include kits or standardized building plans for units Productive Alliance Model, implemented by several countries in a household or community-level production systems that in the region and beyond, can be adopted by the Agri-Bank can be supply households, schools, prisons, hospitals, or other and guarantee the effective and transparent allocation of community organizations. funds and to foster the development of efficient relationships among agriculture stakeholders in the island. The model and 3. Institutional and Policy Support to Local Food and its matching-grants and private loans scheme would focus on Agricultural Productivity focusing on the establishment facilitating the incubation of small but prominent agribusiness of an “Observatory” function tracking advances in food initiatives by bringing together three core agents: producers, and agricultural production funded by the Agri-Bank or buyers, and the provision of technical assistance. other sources. This component will also provide resources to continuously monitor and identify existing and emergent Finally, Agro-logistics under this evolving system warrants production technologies and innovations relevant to Aruba. It further exploration. While international trade has, in principle, will also monitor and aggregate pertinent information relevant a well-functioning system, the local market agro-logistic to plant or animal health protection, known food safety known chain would be naturally developed based on potential new risks, or concerns that arise regarding these issues in any of the production and the role of aggregators to generate supply investments. Component 3 will promote increased fiscal resilience consistency in local production. in the agriculture sector through innovative financial protection approaches. 14 | Executive Summary | 15 16 | ANALYSIS AND STRATEGIC GUIDELINES Exogenous Shock to Aruban Economy The COVID-19 pandemic delivered a dramatic exogenous economic shock to Aruba. The Government public health policy response to halt the contagion was timely and effective, closing the borders on March 17, 2020 and imposing a strict regimen of protective and quick-response measures to contain the spread. However, the sudden shock of borders closed to the arrival of tourists brought home the economic and food security vulnerability of the island because of its current degree of economic dependency on tourism.1 Indicative of the significance of the exogenous shock, results for Aruba obtained from the Caribbean COVID-19 Food Security & Livelihoods Impact survey conducted by the World Food Programme in July 2020 indicate that 80% of Aruban households experienced job loss or reduced salaries (Figure 1) while 76% of respondents perceive that food prices have increased (Figure 2). 1 World Tourism and Travel Council’s 2015 report rated Aruba as the topmost dependent tourist island state economy, estimating its composite economic dependence at 88% of GDP. Executive Summary | 17 FIGURE 1 FIGURE 2 WFP SURVEY RESULTS FOR ARUBA: WFP SURVEY RESULTS FOR ARUBA: HAS YOUR HOUSEHOLD INCOME CHANGED PERCEPTION DEVELOPMENT FOOD PRICES SINCE THE COVID-19 OUTBREAK? 80% 4% 76% 13% 3% At the same time, the humanitarian crisis in Venezuela has led economic, environmental, and social gains. And while agricultural to a large influx of refugees, increasing the needs to secure food production is an inherently risky venture, incorporating disaster provision for vulnerable households. Based on registrations of risk financing mechanisms into the strategy can reduce sovereign NGOs active in the area of food assistance, the demand points to risk, as well as the risk borne by businesses and individuals. at least 10 thousand households requiring food assistance. The effective public health policy response since March has meant The impact of even a modest shift to increased local production that the immediate medical impacts on the population have been and reduced importation will be high, given that the baseline is minimized, yet the worldwide impact on travel means that the negligible. The annual gross value of Aruba’s agricultural crop flow of tourists will be significantly diminished.2 production is approximately five hundred thousand dollars, While the immediate national economic safety-net provided while the gross value of livestock sold for meat annually reaches by the Kingdom of the Netherlands, including humanitarian about seven hundred thousand, for a total agricultural primary relief, medical support, government liquidity and private sector sector producing about $1.2 million in annual gross receipts in an wage subsidy have mitigated the impact of the shut-down on economy with a Gross Domestic Product of $2.7 billion.3 the population for the short-term, the dramatic need to recover and the conditions placed on the Government of Aruba to define Going from less than one percent of GDP to a modest 5% level or that recovery plan have increased the urgency. The authorities a more ambitious 10% increase would produce dramatic primary responded by organizing a nationally coordinated effort in and secondary effects. Potential savings of foreign exchange April 2020 and developed a master plan for economic recovery reserves are significant, but so too is the induced demand for and innovation: Repositioning our Sails. The plan suggests input supply providers, financial and technical services, agri- the establishment of a national food security platform and logistic services and for a range of employment that would developing the agriculture sector as integral components to build generate benefits well beyond the direct benefits to the primary a resilient economy in the long run. sector and to import-substitution. Indeed, the severity of the shock has created an opportunity to rethink economic strategy in ways that not only help manage While Aruba’s strategy must contend with significant risk but can provide the stimulus to investing in new ways constraints to agricultural production, its particularities render that improve livelihoods and quality of life, the environment various alternatives feasible and realistic where they would and national cultural identity. It is important not to squander not be in many other economies. The unique features of Aruba’s the opportunity afforded by the current crisis since the business natural resource and economic profile represent a series of sector and the population in general are in a heightened state parameters that shape the basis for the opportunities to expand of awareness and concern. They are ostensibly at their peak of the national contribution to food security, greater resilience to receptivity to a series of recommendations that compliment future risks, and a more diversified and productive economy. Aruba’s masterplan, formulated here based on a rapid appraisal and the strategy built on the advantages and constraints found. Arubans and outside analysts alike have little illusion that the country food security strategy should aspire to a high degree The Parameters of Aruba’s of self-sufficiency in food production on the island. This derives Food Supply Chain foremost from the recognition that the island’s natural resource endowment and land availability places limits that make Extreme Import Dependence. The near total dependence on production costs in most cases high compared to alternative imported food reflects the challenging production environment import sources. The true basis of Aruba’s food security is grounded and cost-structure relative to more affordable food products in the ability of the population to generate income to maintain that can be sourced from abroad. its robust purchasing power while maintaining an adequate local buffer. This does not however imply that the current near-total Extremely Scarce Water. The island’s dependence on dependency on food imports is prudent. Existing businesses, desalinization for all its potable water, plus its limited rainfall investors and Aruban families can and should be part of a strategy and rainfall collection, makes for prohibitively expensive water that contributes selectively to import-substitution in ways that for widespread agricultural production.4 Groundwater resources not only reduce dependency but do so in ways that generates have limited availability. 2 Uncertainty of tourism-related services in the COVID-19 era and even post COVID-19 environment is compounding factor for consideration, as a global economic downturn will likely to continue to result in reduced tourism. 3 IMF, 2019, World Economic Outlook, October 2019 (GDP) and “The Economics of Ecosystems and Biodiversity”, The Wolfs Co, Amsterdam and Aruba, January 2018, pp. 100-108. 18 | Analysis And Strategic Guidelines Constrained Space. On an island of 180 sq. km, 41% of which classified as urban density, with a population currently estimated Two Separate and Complementary at 115,000, and an average density of 624 person per sq. km, Pillars of Aruba’s Proposed Food built up heavily with hotels and infrastructure for tourism, space is highly constrained indeed.5 Agricultural investments generally Security Strategy must compete with the real estate market for properties with a high opportunity cost. Two separate and complementary groups of producers or potential producers emerge from an examination of the unique Abundant Sunshine and Typically Favorable Climatic Conditions. country socio-economic parameters as the two pillars upon While the 450mm/year average rainfall limits many options, which a sound and sustainable food security strategy may conversely the days with full sunshine are high, with rains be implemented. The first is a range of business expansions concentrated in the June-August timeframe. Wind can be a and start-up ventures applying high technology production factor, with advantages and disadvantages for open-air or techniques within highly limited space, land, and water shade-house production. Aruba lies on the southern fringes of constraints. The second pillar is a collection of existing and the hurricane belt, thus hurricane risk is relatively low; however, potential micro-scale home producers dispersed throughout the island has been occasionally adversely affected by hurricanes Aruba. If provided with state-of-the art levels of know-how and tropical storms. During recent hurricanes Ivan (2004) and from applied agronomic and technological research and regular Matthew (2016), heavy rainfall resulted in flooding, and high feedback, adequate financial and insurance services, and winds have damaged houses and caused waves leading to beach adequate protective measures from risks to plant and animal erosion and flooding along the shorelines (e.g. Omar in 2008). health, and food safety, both groups will provide a resilient and Available hazard risk models show that, in the long run, Aruba’s sustainable foundation for a balanced approach to food security average annual loss (AAL) to multiple perils is USD 56 million, and economic growth. with USD 26 million in AAL to storm surge alone.6 Aruba is also susceptible to drought, which is expected to intensify according Pillar 1: to available climate models,7 along with an increase in frequency Commercial-Scale Food and Agriculture. Analyzing the and intensity of storms. parameters of Aruba’s productive base leads one to conclude that only a very particular set of business expansions or start-ups will Poor Soil Quality. Available areas with good topsoil are scarce possess the characteristics to function as viable and profitable in Aruba. Accumulated erosion and desertic conditions require food and agricultural businesses in the unusual conditions substantial soil creation for any ground plantings. presented. Those economically viable business profiles, analyzed in the following section, tend to be capital-intensive, technology Expensive Electricity Grid8. The supply of renewable energy has and skill-intensive, land-minimalist, water-efficient, climate- increased significantly over the past decade, but it is primarily smart, modern businesses. Some may incorporate these new fed into the energy grid, as opposed to free-standing fully investments into existing food supply chain businesses, such as renewable energy generation and transmission systems for supermarkets integrating production, food importers integrating individual enterprises. processing, or hotel or resorts incorporating production units for their own supply and/or as part of agro-tourism and enhanced High Food Prices. Diseconomies of scale to import to a small local offerings. Other businesses may be free-standing start-up remote island mean that, while more feasible than producing enterprises. locally, the costs of imports remain high. Pillar 2: Limited Nearby Transport Hubs. Aruba currently depends Widespread Micro-Scale Residential Producers. Unlike most principally on various Caribbean Basin ports averaging some 400 countries, the aggregate of garden space or potential growing nautical miles away, contributing to the costs of imports. areas in individual residential urban or peri-urban properties constitute a key asset relative to the limited land available. High GDP Per Capita. The high per capita income compared to Collectively they form the largest potential pool of space with other small island economies, even in the Caribbean, has created the flexibility to adapt to food production on the island. Unlike terms of trade that favor imports. the commercial-scale producers, these backyard producers and potential producers are not capital-intensive operations. Robust Purchasing Power. The high rate of employment, For this collection of small units to contribute meaningfully and principally in well-paid service sector jobs, has made it feasible to sustainably, they do have several features in common with the rely on imported food with negligible local production. commercial operations. They need to be highly efficient users of land and water, incorporating climate-smart techniques High Literacy and Education Levels. The high levels of literacy, and devices, and applying proven productive techniques and multilingualism and education facilitate employment in tourism technologies they can learn to master. While the current and labor mobility to new opportunities that arise.9 percentage of residences that produce any notable quantity of food is small indeed11, the analysis below indicates why the High Social Cohesion. The “One Happy Island” motto is borne potential is high. To realize that potential, public and private out by the lack of major social or ethnic divisions or unrest, and investments will be required to reach an optimal expansion. As a low crime rate.10 The small population, the common national participation increases, a network of micro-scale producers language, the lack of major historical social rifts, all contribute to will emerge, in turn enhancing the know-how to be shared, the apparent high social cohesion. compounding the benefits and impacts. 4 On June 25, 2020, the Government announced its intention to decrease the price of water to agriculture by 45%. [Documentation pending.] 5 World Bank DataBank, 2019. 6 UNDRR (GAR)– Aruba Disaster and Risk Profile 2014. https://www.preventionweb.net/english/hyogo/gar/2015/en/home/data.php?iso=ABW 7 Taylor, M. A., and Coauthors, 2018: Future Caribbean Climates in a World of Rising Temperatures: The 1.5 vs 2.0 Dilemma. J. Climate, 31, 2907–2926, https://doi.org/10.1175/JCLI-D-17-0074.1. Taylor, M. A., and Coauthors, 2018: Future Caribbean Climates in a World of Rising Temperatures: The 1.5 vs 2.0 Dilemma. J. Climate, 31, 2907–2926, https://doi.org/10.1175/JCLI-D-17-0074.1. 9 UNESCO current data shows that literacy amongst the those under 25 years old is near 100% and the average for adults under 65 is 98%. 11 Santa Rosa (Department of Agriculture) reports that most producers in Aruba are considered “hobbyists”. They registered a total of 252 producers, though stipulating that many of those are not currently active. . Analysis And Strategic Guidelines | 19 Implications of Country Factor systems will tend to improve the profitability of the overall enterprise. In some cases, such as in some food processing or Endowment12 on Optimal Production distilling, co-generation opportunities may present new energy- Models for Pillar 1: Commercial-Scale efficient opportunities. Food Supply Chain Businesses LABOR – KNOW-HOW: The production profile emerging for optimal commercial-scale production in Aruba is one that is technology and knowledge-intensive. Skilled employees are LAND: The optimal economic factor endowment for intensification required to manage and trouble-shoot more complex processes. of food and agricultural business in Aruba minimizes land While these operations, concentrated in physical space and utilization, maximizing capital-intensive technologies. This factor leveraging equipment, tend not to require extensive unskilled endowment dictates investing in ways that do not expand the labor, once functioning and on-line, often they can be operated physical footprint of businesses, as much as possible, intensifying by semi-skilled workers trained to operate the systems and the use of real estate, often in innovative ways. One model supervised by a small number of more specialized employees. For is horticultural production on the premises of supermarkets the broader economy, it is important to note that servicing more immediately adjacent to the fresh produce section.13 This is one technologically complex production systems generates growth in form of “vertical farming” utilizing vertical space intensively, the skilled service sector. Outside support expertise in equipment including underground facilities and roof spaces of commercial repair and maintenance, IT control systems, water or soil quality buildings. It is noteworthy that these innovations have been laboratory analysis, plant and animal health services collectively embraced by various prominent high-technology companies in will expand opportunities for small enterprises and professionals Silicon Valley not as a cost-saving or direct revenue-generating with specialized know-how. In the case of enterprises choosing to activity, but as part of a business model to produce high-quality incorporate vertical farming or fish farming into their businesses, ingredients for their company canteens as well as a feature of their they may opt to contract with specialized firms for turn-key “green building” design plan and landscaping including reduction operations, leases, or other arrangements, thereby stimulating in energy for air-conditioning. the demand for local firms in the design, construction and even contract operation of facilities.14 WATER: Following the pattern of land utilization, the ideal profile for a commercial agricultural production system in Aruba must CAPITAL & FINANCIAL REQUIREMENTS: Investment in capital- similarly adopt a technology that is minimalist in its net use of intensive agricultural and food production systems will require water. This entails maximum water-efficiency, using precision an infusion of debt and equity financing. Beyond the existing techniques to minimize losses to evapo-transpiration, and practice commercial bank services in Aruba, project finance and investment maximum water recycling. Crop choice will also factor into water banking services will be needed to vet proposed new projects and utilization to maximize profitability. Any crop production system match feasible projects with financial services that fit this new that incorporates rainwater capture and cistern storage will and expanding demand. The Government of Aruba is currently further reduce costs and help the bottom line. considering playing a role to fill that gap, to offer some new public-private project development and financing mechanisms.15 SOIL, GROWING MEDIUM OR PRODUCTION PLATFORM: Soil In order to manage the financial risks borne by the government of good production quality is scarce in Aruba. Soil can be built and producers, innovative risk financing mechanisms, including up with the incorporation of fertilizer and organic material, but parametric and indemnity insurance products or a hybrid thereof, this is a costly proposition if required extensively. Hence soil- can protect against the impacts of disasters or other exogenous minimizing options will prove the most feasible. The ultimate shocks. Adopting a national strategy for risk financing, including solution may be a production platform using no soil at all. Akin to a specific strategy for the agricultural sector is an approach that laboratory or space-station production, the production systems has been adopted by several Caribbean countries. that may prevail in some cases could use a “fertigation” system. They depend on an inert growing medium for structural support MARKET OPPORTUNITY: The current impetus and primary to plants while relying entirely on a precisely calibrated supply market for increases in agricultural and food production in of balanced nutrients delivered in the drip irrigation, not unlike Aruba derives from import-substitution. This notably includes human intravenous feeding systems. A handful of production the demand derived from tourists and the supply to hotels, inns, platforms are already commercially active that make use of such restaurants, and eating-in options as well as some institutional systems that could be expanded in terms of production capacity. buyers. The cost-structure in Aruba to produce fresh food items generally precludes competing with other countries in the export FOOD PRODUCTION TECHNOLOGY: Food crop production has market, even for higher value “non-traditional agricultural been highlighted in the illustrations above, yet some form of exports”. To the extent that processed products emerge with an intensive animal husbandry, aquaculture, or food processing appeal as gift items for tourists, or export particularly to those technologies for local, imported, or mixed inputs may prove to be who discovered the product as tourists and those whom they have competitive alternatives. In any case, the successful combination influenced, then export niches may emerge.16 Another category of factors of production would utilize technologies compatible of prospective processed agricultural exports includes those with minimal space and soil quantity requirements, and maximum aromatic fragrance or flavoring essential oils or other extracts water-efficiency. with a very high value-to-weight ratio, with low perishability and robust ability to accumulate and store even with limited space ENERGY: Operations of the characteristics outlined often have availability.17 A potentially significant subcategory are medicinal high energy requirements such as for grow-lights, water pumps plant extracts which have a high acceptance and utilization rate and circulation systems, cooling and refrigeration, or a range of in Aruba and are associated with Aruban culture.18 The prospects processing equipment. Thus, technological systems that include also exist for flowers or ornamental plants for the local hotel and the capture of solar or wind energy to build energy-autonomous restaurant market. 12 The term “Factor Endowment” is used here broadly to refer to the application and a blend of the basic factors of production, namely land, water and other natural resources, labor and entrepreneurship, capital, and available technology. 13 The South Koreans have pioneered these systems in Seoul supermarkets for a decade. So-called “City Farms”, “urban farms” or “freight farms” can retrofit shipping freight containers with enclosed growing systems, each containing many layers of growing trays to maximize utilization of vertical space. These containers may also be stacked if necessary, increasing their “vertical farming” to new heights. 14 This also applies to units on rooftops of commercial or institutional buildings engaged in business wholly unrelated to food production or tourism. 15 At the time of this rapid assessment in June 2020, we are aware of on-going discussions regarding an “Agri-Bank”, but do not currently have more details. 16 The primary example today is the “Pica Papaya” hot sauce produced in Aruba which has garnered appeal amongst tourists and members of the Aruba diaspora abroad, yet without formal export channels as of now. 17 A perhaps extreme example of this is cannabis oil which was the subject of a 2015 project in Aruba but lacked feasibility without legislation legalizing the substance. 20 | Analysis And Strategic Guidelines Implications of Country Factor cheese making, pickling, fermenting, and the full range of culinary arts all offer value-added opportunities, irrespective of the ratio of Endowment on Optimal Production imported to local ingredients. However, the technologies applied Models for Pillar 2: Residential Producers to support home agriculture, animal husbandry or aquaculture should strive for and can achieve high levels of productivity and efficiency of resource utilization. The technologies may be LAND: In larger countries with extensive surface areas and embedded inside production kits or techniques that are accessible available tracts of arable land, one would never factor-in to a broad public with only limited additional training or oversight, urban areas as potential agricultural land. Yet Aruba’s unusual such as grow-kits or fish-tanks. Tools to measure soil, water, or parameters, combining extremely scarce land with a more plant characteristics may reflect state-of-the art technology, affluent and educated population than others in the region, means yet the know-how to use them may be readily transferred. The that residential backyards and rooftops collectively represent a imperative is not to create a population of user-engineers, but “sleeping giant” in the initiative to increase national food security rather to identify the technologies engineered best to be used by and boost the economic recovery. 19 part-time home producers with a high degree of literacy and a motivation to learn. Herein lies the vital function of government WATER: The biggest untapped water resource in Aruba is the and public-private partnership to identify technological packages rainwater runoff not collected in homes and residential buildings. and provide adequate support for their effective dissemination, While backyard gardens currently rely principally on urban potable utilization, and adaptation. water connections, this desalinated water is both expensive and something of an economic misallocation. The higher the ratio of LABOR: The economic calculation of labor requirements and rainwater to potable water for gardens, the more savings to energy, financial returns for residential urban farming is unlike that of operational costs and capital equipment used in the desalination any commercial operation, since those who choose to adopt process. A current limitation on the collection of rainwater arises the practices do not generally factor in their labor time as if it from the legitimate public health concerns related to mosquitoes were a supplemental job. Most consider gardening activities as a breeding in standing water. At present Health Department form of leisure, hence a benefit stream rather than a labor cost. prohibitions in many cases impede the expansion. Technical and While there are no barriers to entry, home operations do offer an management solutions exist however to collect and store water opportunity to acquire new skills and to become educated about in cisterns in ways that reduce these risks to acceptable levels. 20 applied biology, agricultural science, and nutrition. Particularly in the case of Aruba, with a high base educational level, a new SOIL: Home gardening plots overcome the soil quality constraint generation of growers offers an unusual opportunity to involve in that their baseline quality is already superior to the prevailing them in experimentation and feedback to accelerate testing, rural land, frequently improved by the addition of soil amendments. proofing, adoption, and dissemination of agricultural innovations. For garden areas devoted to growing, including those in planter boxes, soil enhancement through composting is readily feasible, HEALTH AND WELLNESS: Along with the health and wellness a standard feature of roof-top gardening practices worldwide. benefits of gardening as a leisure activity, the fresh produce This has the additional economic benefit of taking advantage harvested contributes to household health and wellbeing in several of an underutilized resource, thereby reducing the volume of ways.21 Typically, families consume more nutritious and varied organic material in the national solid waste management system. fresh produce when home-grown. Maximum freshness increases Vermiculture kits can be used to accelerate composting and the the appeal as well as the nutrient content compared to imported enhancement of soil fertility. Earth worm “farms” are compatible store-bought produce. Family participation in the production with residential areas, requiring little space and producing no heightens awareness, perceived satisfaction, and the value family negative environmental impacts, including aesthetic or odor members attribute to their efforts and contribution. This has a issues. heightened significance when tied to a “victory garden” or national campaign to increase food security. (See “Victory Garden” box PRODUCTION TECHNOLOGY: Home production is generally below.) As participation levels increase, not only does a sense construed to be a low-technology endeavor. The artisanal nature of community pride and solidarity arise, but the opportunities of home prepared foods and beverages in fact tends to enhance for exchange, barter and sale at farmers markets increases the their value both for home consumption and for sale either in variety of produce available to families year-round. farmer markets, restaurants, or tourist outlets. Baking, brewing, BOX 1 VICTORY GARDEN PRECEDENT TO RESIDENTIAL MICRO-PRODUCTION One of the best-known precedents fora mobilization of an urban or semi-urban population to grow a significant volume of produce is the case of -Victory Gardens’ during the period of World War II in the United States. As food supplies were diverted to feeding US soldiers overseas, and the labor supply substantially reduced, the US Government instituted a food rationing system while it began a program to promote home gardening. The results were extraordinarily successful with 20 million Victory Gardens eventually producing 40% of the country’s vegetables. At a time when the US population was 132 million, equivalent to roughly 30 million households, 20 million gardens represents two-thirds of the country’s households. Those gardens produced 9-10 million tons of vegetables, or about 500 lbs. (200 kg) of produce per garden each year. Most participants (75%) canned produce in mason jars to consume when out of season. 19 In 2015 the University of the District of Columbia (UDC) produced a study specifically for Aruba demonstrating the feasibility of rooftop gardening along with a series of recommendations. 20 “Caribbean Green Travel”, video produced by Martha Honey, 2016, Center for Responsible Tourisms (CREST) Washington, DC, includes a demonstration of mosquito control at a resort in Aruba without the use of pesticides, reporting an 80% reduction in mosquitoes on the property. 21 The survey of Aruba undertaken as part of “The Economic Evaluation of Biodiversity” published in 2018 confirms that the population place a high value on time spent outside and in nature. The experience of Santa Rosa with “hobbyist” growers indicates enthusiasm and receptivity to gardening. Analysis And Strategic Guidelines | 21 CAPITAL & FINANCIAL REQUIREMENTS: Unlike commercial Strategic Guidelines to Design Aruba’s producers, residential producers can scale their investments to fit their available financial resources since Food Security and Economic Resilience there is no minimal threshold. This does not mean however Program that participation and adoption of the most appropriate and productive technologies will be achieved nationally 1 - Engage the Public Broadly on the Win-Win Opportunities to without recourse to some additional financial or in-kind Increase Local Production. resources. Particularly because novice growers may be This initiative merits a public social marketing campaign to starting up from scratch, and many others have limited mobilize participation and buy-in, emphasizing the benefits for experience or agronomic background, the critical injection families as well as for the economy and resilience of Aruba. While of capital will be in the form of technology or and technical “Pillar1” implies a targeted approach, “Pillar 2” needs grassroots know-how. As such, grants or financing arrangements will support. The campaign should emphasize that beyond the be critical to acquiring pre-established start-up “kits” for value of contributing to a food security buffer and savings from their respective choices of crops and production type (e.g. reduced imports, that the policy offers to diversify and expand rooftop, raised planters, shade-house, saplings etc.) that the economy. The message should go beyond national benefits to make the most sense economically and practically. This highlight the personal and family benefits for nutrition and health, technology-finance packaging also offers an opportunity gastronomic and dietary variety, for recreation, and quality of to expand the implementation of climate-smart equipment life. The public should also hear that increased local production such as water-efficient devices, or solar-powered pumps or presents an opportunity to reinforce Aruban cultural food lighting. traditions and national identity within families and to be shared with visitors, enhancing tourism and differentiation of Aruba as a Another compelling reason to foresee financing options for destination. the expansion of residential production concerns socio- economic equity. The demand for participation may well 2 - Focus on Enhanced Demand for High-Quality Local Produce. prove intense amongst lower-income families who are Systematically explore the incorporation of more local ingredients precisely the segment most likely to qualify for grants, in restaurants and inns that cater to a clientele that values and micro-loans, or a blend of both, and current unemployment that is willing to pay a premium for “authentic local” (high quality may motivate households to become increasingly invested comida típica), farm-to-fork, organic or other characteristics that in agriculture. Unlike high tech industrial agriculture that depend on certified local ingredients. controls environmental parameters as much as possible, residential producers will be exposed to external shocks 3 – Focus on Enhanced Quality Standards for Local Production. related to meteorological parameters and biological agents. Demand for local products will wither if quality standards are not As they expand market-oriented production, both their met. Assuming that a wide range of potential local products will investment and the risk of loss increase. While this might not be able to compete with cheaper exports, those products that not worry everyone equally at first (human perception will prevail are those that succeed in differentiating themselves of probabilities is imperfect), one major loss event could primarily based on quality or some combination of quality and lead to a significant backlash in public enthusiasm, as the the appeal of supporting local producers. To fulfill that demand, risks in question are “covariate,” that is they affect many producers will need to achieve high quality standards likely focusing at the same time. Hence commercial insurance and other on the most perishable organic produce to out compete imported financial protection mechanisms can play an important substitutes. Certification may begin with local cooperative or role in securing the untroubled expansion of residential association enforcement, but third-party certification may prove production. necessary for some market segments.23 However, preliminary assessments show non-life insurance 4 - Stimulate Experimentation by Local Producers of All Scales. penetration is relatively low, at 1.3%22, compared to a Break out of the “chicken-or-egg” dilemma of reluctance regional average of about 3%. Combined with no data because of lack of precedents or a scale too small. Encourage on agribusiness insurance, exploration and piloting of experimentation of any scale by anyone. No plot, or planter box, innovative insurance mechanisms that protect producers or rooftop is too small. This extends to experimentation with local and investors, are tied to a reduction of physical risk, and artisanal processing such as cheesemaking, beverages, essences, might further incentivize market entry. For example, the or prepared specialty foods. Caribbean Oceanic and Aquaculture Sustainability Facility (COAST) offered by the Caribbean Catastrophe Risk 5 - Involve Children, Youth and Schoolyard Gardening. Insurance Facility Segregated Portfolio Company (CCRIF Participation in gardening is accessible to children and youth SPC) is an example of a regional product that could be of any age. Given the significance of the cultural and socio- expanded. The Governments of Grenada and Saint Lucia economic change implied by the initiative, exposing the young are piloting the COAST product to protect the food security to production and animal husbandry will contribute to positive and livelihoods and to promote the resilience of the fisheries attitudes for life and participation of families, favoring passing sector against extreme weather. Parametric insurance for down inter-generational lore and insights. School curricula have the fisheries sector will allow the GoG to transfer contingent already been developed in other countries to teach through the liability arising from natural disasters that impact food gardening experience. 24 Including high school or vocational level security and livelihoods. COAST will promote long term participation creates the opportunity for additional training and policy objectives in the fisheries sector by harmonizing experimentation that can materially advance the program and government plans for disaster risk management as the research and feedback process. Furthermore, schools offer well as ecosystem management, incentivizing climate additional space beyond residential properties, allowing them to smart fisheries best practices, and ensuring fishers meet incorporate healthy items into any cafeteria lunches or to take minimum levels of shared governance as a prerequisite for home with the added appeal of “ownership” and pride in the coverage as a beneficiary of insurance. production. 22 | Analysis And Strategic Guidelines 6 - Identify World-Class Technology and Best Agricultural and 10 – Provide preferential access to local food producers in public Processing Practices. food procurement. A national initiative to increase the local production of food and The significant size of food purchases for vulnerable households agricultural products could be successful in many respects already since the start of the COVID-19 pandemic presents an opportunity identified even without achieving high levels of productivity. to drive goals related to the improvements of livelihoods, food However, the extent to which the initiative will make a significant security and nutrition. Food baskets for food assistance can contribution to food security and to balanced economic growth be designed to incorporate local production while meeting the will be driven in large measure by productivity. This is obvious nutritional needs of target groups. By providing an accessible in the case of commercial enterprises, but it should be no less market channel to farmers and local food producers, risks and so with the dispersed micro-scale producers. This requires an uncertainties involved in market participation are reduced. institutional capacity to identify systematically “Best Practices” and top technologies from around the world. In turn, it also requires adaptation to the idiosyncratic conditions in Aruba and Note on the Balance Between the Local its various micro-climatic and production zones. Continuous in- Production Strategy and National field experimentation, monitoring, evaluation, and reporting are Approach to Importation vital if the knowledge is to be disseminated and benchmarks to be established. The large number of small units is actually The entirety of the proposed strategy to increase local production advantageous for agricultural researcher since each household is predicated on investing in those areas where competitive and sustainable options can replace the current reliance on imports. represents in effect another experimental farm unit. As stated, neither the Government nor outside analysts seek self-sufficiency, instead striving for increased resilience and 7 - Leverage Available Worldwide Resources for Applied Agronomic risk-management in the face of food security vulnerabilities to Research. disruptions such as the current COVID-19 pandemic. The strategy By joining forces with existing agricultural research centers in the pointedly does not recommend any restrictions to importation nor the creation of any “strategic reserves”. It bears emphasizing region and around the world, Aruba can be part of a worldwide that in the current case of the sudden border closure, importers network to accelerate the exchange of knowledge. The premier reported holding substantial reserves in their warehouses since public network of agricultural research centers worldwide, the they routinely accumulate stocks in order to assure steady Consultative Group in International Agricultural Research (CGIAR), distribution not only to the local population but also the large demand from tourists. When the consumption of food dropped and the Caribbean Agricultural Research and Development without tourism, the accumulated supplies were more than Institute (CARDI) offer partnership opportunities and ample adequate to fulfill food needs while volumes and composition of sources of information and technical assistance.25 new import orders were adjusted. 8 - Analyze the Results of Both Commercial-Scale and Household- Any excessive application of Just-in-Time (JIT) procurement policies would clearly be imprudent, but there is no indication that Scale Production. private importers and wholesalers in Aruba are pursuing a JIT- Launching a widespread initiative to stimulate both commercial driven approach. Furthermore, anyone proposing the construction and grassroots agricultural production offers an opportunity that and operation of publicly owned silos or major warehouse facilities is more difficult to achieve in countries with long-established should familiarize themselves with the unfortunate history and poor track record of that option elsewhere in Latin America and traditional farms, including subsistence farms. Establishing a the world. relationship from the beginning as novice producers receiving technical inputs and advice offers the opportunity to incorporate Where gains may be found regarding the process of importation, all participants into a program to generate and share basic storage, and distribution is in opportunities for investments in the agronomic and production data collected and analyzed at the Agro-Logistic system. Note that the analysis of the Agro-Logistic system in Aruba is the subject of another chapter in this set of national level. This affords an unusual opportunity to establish recommendations. (Refer to chapter “Agro-logistic Analysis of and benchmark productivity of various agricultural practices as Aruba”) well as the performance of specific genetic varieties, whether germplasm or breeds. This in turn will encourage innovation and As the national local productive capacity expands and commercially viable businesses explore new investment accelerate gains in productivity. options, imported inputs will continue to play a vital role in the overall profitability. This is clearly the case in much food 9 – Reduce the Impact of High Logistics Costs in Fruits and processing, where major ingredients are available in the world Vegetables Sourced Locally. market at prices substantially below even the hypothetical cost Production that is located closer to the consumer and in of production in Aruba. The import-substitution opportunity in any case often lies in the value-added in-country and the consequence have a shorter logistics chain will benefit from lower formulation of profitable new products. Even though a key logistics costs and increased freshness. Local market agro- ingredient of the popular local hot sauce mentioned is imported, logistic chains will be established as new production patterns the unique new local product has competitive value in the local emerge. Every link in the chain that connects farms, cold chains, market and even has potential abroad. Hence products cannot be classified strictly as imported or local when in fact blends of aggregators and processors to the wholesalers, retail store, both offer a gamut of increased economic opportunity for local consumers, hotels and restaurants adapt to the characteristics production. of the new agro-products. 22 Gross written premiums as a percentage of GDP, Axco – Insurance Market Report Non-life (P&C) 2018: Dutch Caribbean. 24 “The Edible School Yard” (ESY) curriculum was initiated in 1995 by the prestigious Chef and author Alice Waters of Chez Panisse, a leader of the “Slow Food” movement she pioneered in Berkeley, California. Currently there are programs in 5,681 schools in 45 countries, including 52 states and territories of the United States that have adopted the ESY curriculum. https://edibleschoolyard.org/curriculum. 25 CGIAR’s member research center CIAT based in Cali Columbia is the closest to Aruba, though many of the CGIAR centers would make relevant partners, such as the premier horticultural research center, AVRDC, in Taiwan. CARDI has research centers and country offices in 14 Caribbean countries with relevance for Aruba including adapted livestock and husbandry breeds and Best Practices. Analysis And Strategic Guidelines | 23 24 | PROPOSED PROGRAM INTERVENTIONS Following from the preceding analysis and strategic guidelines, three components emerge to channel public and public-private investments to stimulate Aruba’s local food production and sustained economic development in the agriculture sector. The first two correspond respectively to Pillar 1, commercial-scale businesses and Pillar 2, household and community production. The third component invests in the enabling institutional and policy environment underpinning the sustained success of local food and agricultural production. Proposed Program Interventions | 25 Component 1: Investing in Commercially Scaling the Level of Intervention for Viable Expansions and Start-Up Component 1: Commercial-Scale Food & Enterprises Agricultural Businesses The principal activities under Component 1 will begin with As part of project preparation, interviews should be identifying, vetting, and selecting individual investment conducted with established businesses as well as investor projects, developing business plans (BP) to fund clients for groups in Aruba to gauge the level of interest and the rough start-ups and expansions in the food and agriculture sector. dimensions of projects. While this preliminary exercise Component 1 will also hold the responsibility for following the cannot anticipate future levels of investor interest, including investment and fulfillment of agreed responsibilities under joint ventures with investors outside the country, it will serve the BP, conducting follow-up and evaluation functions. The as the basis of an initial estimate. funding mechanism currently under construction may be referred to here as “Agri-Bank”. (See below.) Component 2: Promoting and Investing At the scale anticipated, it is unlikely that formal Calls for in Micro-Scale Home and Community Proposals will be issued. Review of proposals will include both in-house expertise and consultation with subject-matter Production specialists as required. While the technologies are expected to be drawn from “off the shelf”/ existing technologies The principal activities under Component 2 will begin with currently operating in other areas of the world, many of public outreach and promotion of the national initiative to these enterprises will be start-ups in the application of expand agricultural and food production activities at the those technologies in Aruba. household and community level. While the first focus will likely be home gardens or animal husbandry, it should also include The target clients of Component 1 divide into two groups. simple food processing or preservation techniques for home- The first group includes those who seek to expand existing consumption or for sale. Component 2 will maintain and operations. This includes expansion through vertically build over time an array or menu of micro-scale technologies or horizontal integration up or down the supply chain or and production systems suitable for small household or across to an allied field of production. Examples of vertical community production, including for school yard or other integration in Aruba could include wholesalers or distributors small-scale gardens or projects. Information will be made investing in food-processing, or supermarkets incorporating available to prospective participants when specific kits or production on their premises. An example of horizontal standardized plans to build units are identified for any of the integration across fields might be a fishing enterprise array of household or community-level production systems. investing in aquaculture, or a hotel or restaurant group It will disseminate, collect, review, and select applications investing in a craft brewery or local juice production line. to form basic and relatively standardized business plans The second group of clients are start-up enterprises. This (BPs) for funding. (Again, refer to “Agri-Bank” note below and includes investors not currently involved in the food or “Productive Alliances” Annex.) agricultural business currently but who see a business opportunity to launch one, perhaps using a new technology. Component 2 will track the progress of the individual projects Joint ventures may be formed between investors and and aggregate data and technical information that will serve technology firms outside the country, notably those current and future participants and serve for evaluation experienced in working in ultra-water-efficient environments. purposes. It will also serve as a clearinghouse for resources Bio-technical start-ups include those working in tissue for technical support, including institutional support from culture, algae production, mica-culture, or animal and plant research or educational programs. health protection products or services. The development of essential oil fragrances and flavorings as well as medicinal The target participants for Component 2 are broadly plant extracts or cosmetic products also falls in this start- households, schools, prisons, hospitals or other community up group. organizations. A natural first cohort of participants are the existing local home producers considered as “hobbyists” Whether in the start-up or expansion category, some seeking who have registered with the Department of Agriculture, financing will likely include businesses seeking to produce to gain the benefits of their services, such as access to inputs to a variety of food and agricultural enterprises cistern water. Of the 252 registered producers as of the pre- (Pillar 1) or to the broad public of micro-producers (Pillar 2). COVID period only an estimated 35 are commercial farmers Examples include those providing laboratory services or those or raising livestock. There are many more gardeners not installing and/or operating “vertical farms” or aquaculture registered who produce amounts that exceed their home tanks for other companies, including those in the hotel and consumption. It remains to be quantified with a survey the tourism sector. They might be companies producing rooftop number of current garden producers who would participate in growing technologies as part of systems using imported a program. Anecdotally, a considerable portion of the public materials to construct planters or drip irrigation systems. would appear to be interested in increased home production. 26 | Proposed Program Interventions Scaling the Level of Intervention for will serve as the technical knowledge center of the initiative to boost food security and agricultural development funded Component 2: Micro-Scale Home and by the Agri-Bank, drawing on data collected and analyzed Community Production from business clients of Component 1 and participant clients of Component 2. The scale of the initiative will depend in part on the response from the public during program preparation. During the Secondly, Component 3 will provide resources to continuously preparation period, an initial survey sample of a cross- monitor and identify existing and emergent production section of the population should be conducted to gauge the technologies and innovations relevant to Aruba, both from initial level of interest. Based on the response, the number BPs funded by Agri-Bank and from developments reported and range of those participants can be estimated, with worldwide. This will include establishment of agricultural the appreciation that levels of participation and funding research and development alliances between relevant requirements are likely to evolve over time as the public international institutions. Component 3 will also monitor learns of the experience of the early innovators and initial and aggregate information relevant to plant or animal health participants. (“phyto-zoo-sanitary”) protection, known food safety known Presented here as a project designed to maximize risks, or concerns that arise regarding these issues in any of participation and the chances for sustainability and growth, the investments. It will serve as a liaison with national and alternatively policymakers might opt instead for a minimalist international resource information sources and contacts, in approach. In that case, a public information campaign could coordination with Santa Rosa. A relevant potential alliance be launched to stimulate interest, leaving it to the public to yet to be formalized is a technical ABC consortium or participate and to devise their own schemes and to source information exchange alliance with Curaçao, Bonaire. their own supplies. Arguments in favor of structuring the initiative as a formal Component 3 will also provide coordination and technical public-private project relate to maximizing the impact assistance to micro-scale producers groups seeking to create and sustainability, leveraging access to the best available associations. Taking advantage of the Observatory to identify technology to the broadest public, improving the chances of potential groups, either based on product lines or location, access to financial services as needed, harmonizing policy the assistance provided will help to form organizations that on water and energy resource management, disseminating facilitate marketing to Farmers Markets and to buyers in the best practices systematically, measuring results across the restaurant and hotel trade.26 It will also facilitate the delivery population, and thereby adjusting policies and practices of technical information to broader groups more efficiently. based on the results. A third public option might be a hybrid of the minimalist Finally, Component 3 will promote increased fiscal resilience in approach and the structured project approach in which the agriculture sector. This would include coordination between a public social marketing campaign could be launched domestic non-life insurance providers and the government to immediately while the structured project was prepared. facilitate access to insurance coverage for new and existing While this might be a legitimate alternative in some producers. It will also promote coordination with regional scenarios, such as those cited for countries with intense insurance mechanisms like CCRIF SPC to ensure that Aruba urgency and few resources, we would encourage caution. can access regional products designed to increase financial If the government can wait to launch after a suitable resilience in the government and in vulnerable sectors and preparation process, it diminishes the risks of squandering populations. Development of a national strategy for risk the opportunity created by the COVID shutdown and the financing, including a specific focus on the agriculture sector, public’s maximum awareness and motivation to change the can outline a complementary menu of instruments to combine national food supply and production matrix. If the launch is risk retention and risk transfer with accompanying supportive ineffective, the public risks losing interest and motivation, policies. Implementation of such a strategy can mitigate the prematurely abandoning the efforts, creating a negative agriculture sector from contributing to another economic or disinterested perspective, hurting the credibility of the shock. government. While the proposed high tech industrialization of agricultural expansion aims to isolate production from vagaries of the Component 3: Institutional and Policy environment, it increases the dependency on technological Support to Local Food and Agricultural inputs and expertise (for example if there are microclimates suited more or less to certain crops). In respect of expertise, Productivity Santa Rosa can centralize know-how and thus reduce the need for risky investment in research by individual firms (including The first activity of Component 3 will focus on the quality screening of potential technology providers), but risk establishment of an “Observatory” function tracking and uncertainty should be addressed explicitly. Some sort of advances in food and agricultural production funded by the agriculture risk assessment tailored to the specific situation Agri-Bank or other sources, in collaboration with Santa Rosa of Aruba and its ambitions (and including possible climate and other relevant Government departments such as those change scenarios) may be advisable, if not already available related to water and energy infrastructure. This Observatory with Santa Rosa. 26 Currently a group of four producers has formed a de facto pre-cooperative that may be a natural candidate for support in forming a suitable association. Proposed Program Interventions | 27 There are many reasons why agriculture insurance is Rationale for the Observatory. Although it is unusual to consider underdeveloped most everywhere, to which economies of scale part-time or after-hour home gardeners as farmers, the logic have to be added in the case of Aruba. It has to be anticipated, of a typical technical support project to farmers applies to therefore, that the insurance industry may not proactively both commercial-scale producers and home and community offer suitable products to protect investments in either of the producers. No matter the scale, all need technological know- two very different growth strategies proposed (backyard and how and appropriate equipment, improved seeds, seedlings high-tech). But good cooperation between the government or cuttings, soil fertility inputs, water management systems, and the insurance industry – ideally including the providers of plant (or animal) health protection, post-harvest handling, finance – can remove many obstacles, for example regulatory processing, storage and marketing assistance for products not uncertainty, lack of appropriate statistical data, and missing consumed entirely by the household. analyses of risk related to production, market and business The value of the accumulated experience of growers as to what environment. As soon as policy decisions allow, it would be good works or does not on a specific plot of land, at a specific time to initiate a dialogue between Santa Rosa (and, eventually, the of year, should not be underestimated. Building upon that Ministry of Finance), the insurance industry (possibly including foundation with improved inputs and techniques developed international reinsurers) and the lenders and investors expected over time in controlled settings, such as in experimental farms, to fund agriculture expansion. As this dialogue progresses, it offers growers the opportunity to increase productivity, often will show what risks need to be prioritized in view of the likely substantially, as well as to diversify production. In the case of expansion paths (for example, what risks will be borne not by novices, the role of external guidance and assistance is crucial. Aruban actors but by international providers of technology). According to the willingness and ability of local insurers to Technical Support to Policy Issues. Component 3 will also provide risk transfer via commercial insurance products, provide technical assistance as needed to help resolve policy alternative avenues can be explored. Examples from other issues that arise impinging on development of projects and the countries include government premium subsidies, agriculture sector. An example is assistance to provide technical solutions insurance pools, agri insurance companies established by that resolve Health Department concerns over cisterns and governments, and governments acting as reinsurer through rainwater-collection systems needed for agriculture. Other financial guarantees (which they themselves may be able to issues are likely to arise regarding environmental policies transfer to international markets). Transparency, trust and bearing on agricultural investments including new technologies. reliable policy are key to a successful public private partnership Another prospective topic may be the issues surrounding the fomenting investment by making risk manageable. potential establishment of a botanical collection to document 28 | Proposed Program Interventions island resources, associated or not with a potential arid-area Based on the experience of restaurants and hotels that are botanical garden with touristic value. An important issue area sourcing food locally, further analysis should be done to identify likely to arise will be zoning for prospective new agricultural potential aggregators that could assure consistency of products. projects, given the predominantly urban setting and population The initial experience of the “Cooperativa Agricola of Aruba” is density, especially in the case of any animal husbandry promising in its efforts to link local horticulture producers to local or aquaculture activities. The latter may well raise issues markets. However, consistency in the supply, quality, quantity, regarding policies or acceptable norms for water utilization and price points of produce can still be improved. To achieve this practices. Rather than conduct any costly island-wide analysis objective, three main actions are suggested: of livestock carrying capacity, the onus will be on any Business Plan proposing and animal husbandry activity to demonstrate First, promote aggregation from farmers and household the compatibility of the operating scale with the demands on producers. Aggregation could come from either independent or the natural environment. In most if not all cases, the business coordinated farmers supplying either directly to wholesalers, retail would entail enclosed or tethered animals in semi-enclosed and HORECA, or throw aggregation facilities. For the case of home areas rather than any free-range or grazing schemes. agricultural production, selling channels for excess production can be strengthened. Innovation through phone applications could be analyzed, in addition to the existing online Facebook market. Component 4: Linking farmers to Second, promote forward and backward linkages of agro- consumers and HORECA channels and processors. To achieve this, further develop skills for the agro- processing sectors, and promote investment and alliances to put promoting genuine gastronomy. those skills to work. Because farming in Aruba is atomized, and at low scale And finally, the relationship between local agro-production production, investment is needed to allow for aggregation and and gastronomy for the visitor’s genuine experience need to be linking the farmers to local customers. The pandemic highlights fully developed. Local farms create a new attraction for visitors the importance of climate smart, innovative agriculture to wanting to experience tours. serve the local population and provide a genuine experience for From a policy perspective, Component 4 falls under the idea of visitors. Linking farmers and agro-processors to the tourism and enhancing the farm to fork model, together with analyzing the local population could benefit Aruba by achieving a level of local export potential of some products, and providing with innovation provision of food. and technical agricultural assistance. FIGURE 2 POTENTIAL STRENGTHENING OF FARM TO FORK MODEL. Proposed Program Interventions | 29 30 | CROSS-CUTTING THEMES Cross-Cutting Themes | 31 Farm-to-Fork model: Tourism and The challenge for restaurants and hotel procurement systems typically is how to manage the limited volume and variety of local Linkages to Local Food Production and produce before the sector reaches some critical threshold. This Agricultural Systems can be overcome by turning the short supply into an opportunity where special offerings are included in menus as local ingredients become available and can be featured. As suppliers establish Before proceeding from the analysis of Aruba’s economic and themselves as reliable partners to buyers and representing groups natural resource parameters, and the enunciation of general of producers, then the possibilities arise to become “custom strategic guidelines, to the design of proposed interventions, growers” where chefs or buyers request specific ingredients with it is important to address key factors and recommendations advance notice, sometimes coinciding with seasonal availability. regarding the crucial area of linkage between the tourism sector It is noteworthy that, depending on the size of these pre-orders or and the emergent food and agriculture sector. standing requests, either commercial-scale producers will tend to respond, or a collection of micro-producers with relationships with Increased local agricultural production capacity opens prospects farmers markets or associations. for increased value-added in the tourist sector. Even without increasing the footprint of the existing tourist establishments, the Gift offerings that are unique to a travel destination are important incorporation of greater local content creates the opportunity to aspects of the tourist experience. Currently Aruba produces a offer a broader range of lucrative food services. The latter coincides quite limited array of handicraft or local products, such as the hot sauce mentioned previously. The potential for prepared foods or with trends in tourism worldwide where growing segments of the beverages to fill this niche eventually is promising. A significant market seek “authentic” experiences that are particular to respective aspect of the opportunity is, once again, the chance to break out destinations.27 of the dilemma of limited supply to “export” products. Offerings in gift shops of boutique inns, for example, have few volume The strategy proposed here is not a substitution of agricultural requirements and frequently hoteliers are eager to present local jobs for hotel service sector jobs, but rather a win-win opportunity gift items as part of a fair-trade opportunity explicitly to support incorporating more local food production into the tourism sector local producers. in ways that help Aruban tourism differentiate itself, broaden The quintessential link between the nascent agricultural sector its market, and increase revenues while expanding agro-tourism and tourism is agro-tourism. Again, the existing offerings are rare and local gastronomy. A small number of the most prestigious in Aruba, but their experience demonstrates the pent-up demand restaurants in Aruba already feature local foods, though they depend from visitors who wish to vary their activities and experience primarily on the imported food value chain for ingredients to prepare the locale. It is remarkable that Santa Rosa continues to receive those meals.28 regular requests to visit the Agricultural Department installations, though never intended as a visitor destination. As new technologies for commercial businesses are deployed, including vertical The “Slow Food” movement officially founded in Italy in the 1980s has farming, aquaculture and future food processing, opportunities spread worldwide29, emphasizing the utilization of local ingredients will arise for agro-tourism visits. Similarly, as supplies from small and valuing distinctive food traditions in each locale. The trend in producer associations and farmers markets expand, the value demand for greater local content is augmented by the popularity of the production will be gauged not just in sales profits but in of television and on-line food shows.30 Box 2 below summarizes a the creation of experiences sought after by visitors. From the number of the key trends articulated by Anthony Bourdain.31 experience of Santa Rosa producers, there is also space for agro- tourism experiences. BOX 2 MAJOR TRENDS IN FOOD TOURISM 27 Martha Honey, Ecotourism and Sustainable Tourism, 2008, 2nd edition. 28 “36 Hours in Aruba”, Shannon Sims, New York Times, March 12, 2020 cites the restaurant “Papiamento” as a purveyor of local elements in its cuisine. 29 The “Slow Food Youth Network” was founded in 2007 in the Netherlands and various countries promoting the principles of Slow Food amongst the young generation. 30 The popularity of “food television” has created a multi-billion-dollar business in the United States, the chief source of Aruba’s tourists. The value and range of these television programs has been documented by The Hollywood Reporter, July 19, 2019 “Welcome to Peak Food TV: Insider Hollywood’s Growing Hunger for Culinary Shows” https://www.hollywoodreporter.com/features/gordon-ramsay-more-hollywoods-growing-hunger- food-tv-shows-1225214 30 The popularity of “food television” has created a multi-billion-dollar business in the United States, the chief source of Aruba’s tourists. The value and range of these television programs has been documented by The Hollywood Reporter, July 19, 2019 “Welcome to Peak Food TV: Insider Hollywood’s Growing Hunger for Culinary Shows” https://www.hollywoodreporter.com/features/gordon-ramsay-more-hollywoods-growing-hunger- food-tv-shows-1225214 32 | Cross-Cutting Themes The challenge in Aruba then resides in identifying products visitors are primarily from the United States (69%), followed that will serve the local population, tourists, and have the by Latin America (15%) and European (5%). Different from other potential to be exported. Regional examples include Jamaican Caribbean destinations where all-inclusive resorts account and Dominican coffee. It is not only produced and consumed for most of the rooms, time-share and regular hotels have an by locals and tourists but also exported, as visitors and other important share in Aruba. This point is key since time-share consumers start to demand them based on their quality and owners would not only cook for themselves but also visit local uniqueness. Such is the case of Blue Mountain and Santo restaurants, as will the hotel visitors. Occupancy rate had been Domingo labels. Other successful cases are spices from good, with an annual average of 77.3% until 2019. The pandemic Grenada, macadamia nuts from Hawaii, and pepperoncino will change this rate and likely introduce a ‘new normal,’ at from Calabria. least for the medium term. Another advantage of Aruba’s visitors is a high return rate, Agricultural products that can be taken home by tourists, with some repeating visits over a period of more than 20 years, consumed by local population, and produced to be sold at a especially those based on time-share ownership. About 40% of viable price point may also have export potential. Although the visitors will stay at a time-share, and 25% in apartments there is willingness to pay a premium for local, even organic or guest house, so they will either cook by themselves or visit products, there will not be a consumer market for higher prices the local restaurants and supermarkets.36 Furthermore, cruise for more standard products that can be easily imported. visitors accounts for 44% of annual visits, and even though they stay for a few hours, they buy some locally produced A version of the farm-to-fork model has been demonstrated goods. Because most tourists come from the United States, in Aruba recently by local consumers, hotels and restaurants. suppliers have historically sourced American food from the Faced with the pandemic and the sudden absence of tourists, United States. Nonetheless, some restaurants start to provide locals got in touch with farmers of fresh products or frequented local dining experience. There is no school of gastronomy on the farmers markets.32 Some who cultivate fruits and vegetables island, a factor that may be keeping local cuisine back. at their homes began to trade surplus with other producers, organized by an online market hosted on a Facebook. In When looking for products that could have export potential, another case, a group of four farms formed a cooperative some are already being produced locally and sold to tourists and began delivering food boxes directly to consumers.33 This and locals. One of them is pica, the hot sauce previously provides evidence of the willingness of hotels, restaurants, mentioned, made of peppers and papaya, sourcing key inputs and retailers to source food locally when feasible. The from the Dominican Republic. Another area is skin care challenges to expanding local sourcing remain consistency in products, produced locally from with locally cultivated aloe quantity, quality, and price points acceptable in the market. vera. Other options are locally produced annatto paste, beer, It bears reiterating, however, that this start-up dilemma can and wine. Further analysis on export potential should be made be overcome by strategies where limited local products are on these and other local agricultural production. featured in promotional or trial arrangements even with small quantities. Depending on the structure of the hotels, some of The following Table, Box 3, highlights how various Caribbean them will import directly the food, while others buy from the island countries have over many years developed products, local wholesalers.34 primarily alcoholic beverages, and non-alcoholic beverage ingredients, unique to each country. These brands have In Aruba, stay over visitors account for an extra 20% of the achieved worldwide recognition and a positive marketing permanent population on average, at any given time.35 Aruba’s image for the respective island. BOX 3 SUCCESSFUL CASES OF EMBLEMATIC ISLAND BEVERAGE BRANDING It is notable that even in the cases where these iconic island respective islands, in many cases the actual volume of that brands have subsequently been purchased by global brands, ingredient may be small. Furthermore, in the case of extracts, their marketing remains tied to their origins and mystique, they fit the high-value-to-volume ratio than means the higher linked successfully to tourism and hospitality promotion in the island costs of growing or transporting the ingredient do not respective islands and to island name recognition worldwide. significantly affect the cost-competitiveness of the end- While these products source a key ingredient from their product.38 32 Santa Rosa farmers markets is an example, open once a month. There Lopez company subsequently became the dominant supplier of the key is also another farmers market on Saturday mornings. ingredient to the piña colada, stimulating successful promotions of the 33 Cooperativa Agricola Aruba, CAA. drink and investments in coconut production and processing. 34 Op. cit. 38 In the case of Angostura Bitters, shrouded in secrecy since the 19th 35 Calculated based on visitors night stays per year. Century, associated with an antimalarial herbal tincture said to have 36 Based on Hotel and Tourism Association AHTA interview. saved the life of Simón Bolivar, it is not clear than any agricultural product 37 Cream of coconut extract was developed in 1949 by University of sourced from Trinidad is required in its production. Puerto Rico Agriculture Professor Ramón Lopez-Irizarry. The Coco Cross-Cutting Themes | 33 Relevant Lessons Highlighted by the Case of Remoteness as an Asset. The economic challenges represented by a small remote island location are immediately apparent in the Islands of São Tomé and Príncipe39 the costs of transport, distance from markets, dependence on imports and the diseconomies of small-scale production and Beyond the Caribbean, São Tomé and Príncipe provides Aruba with marketing. Yet the STP example has revealed the appeal for some an instructive case of island-branding, cultivating the mystique segments of a high-end form of tourism. A decade ago a wealthy of a remote location, and development of agro-tourism and Green South African investor based in London became intrigued by STP Tourism. The Republic of São Tomé and Príncipe (STP) is the and began investing in Príncipe, both in refurbishing a largely smallest African nation on the Atlantic side of the continent, abandoned colonial cocoa plantation and in creating a secluded collectively somewhat larger than Aruba, though Príncipe is eco-lodge from scratch. They emphasized a zero-carbon emission smaller.40 As a former Portuguese colony, despite its limited size, design and bringing in international chefs to design gastronomic STP became synonymous with high quality cacao, remaining the offerings incorporating as many local elements as possible. world’s leading producer until the 1920s when other producer Aruba’s population density is more than ten times greater than regions boomed. Although this agricultural renown and history set Príncipe, and the ecological and historic conditions quite distinct. it apart from Aruba, its current strategy offers various elements But the applicable lesson learned from STP, is that remoteness relevant to a small island economy considering its options. can prove to be an asset for a high-value segment of tourism when complemented ideally by elements of distinct local identity Island Branding. Following the logic illustrated by the case of and cuisine, biodiversity, carbon-neutrality, and environmental various Caribbean countries (Box 3), STP island-branding, STP protection. It is not meant to replace other forms of tourism, but has embraced its distinct identity as a producer of essentially to realize the economic value of varied forms of tourism that can one ingredient to shape its tourism sector. One enterprising contribute positively to Aruba. firm began processing cacao to produce chocolate locally in the 1990s emphasizing the highest quality, and distinct flavor Experiments with New Age Sailing Cargo Ships. In addition to its characteristics and blends particular to it. The family company iconic cocoa, STP has emerged in recent years as a producer of has also developed an artisanal aquavit made from distilling the high-quality black pepper demanded by French producers of dried fermented cocoa pulp that was formerly discarded, producing a salami (saucisson). A French spice importer has collaborated for spirit unlike any in the world, commanding prices at the top of the years with STP’s black pepper grower cooperative to enhance its spectrum for those who can obtain it. post-harvest quality on the island of São Tomé. The importer’s challenge has been how to ship the product given the infrequency Educational Agro-Tourism. Other groups in STP have begun and lack of adequate containerized freight. They have joined producing limited amounts of chocolate and offering visits, but the forces with an innovative French zero-carbon sailing firm in a port pioneering firm referred to is still the leader in a form of educational in Brittany specialized in trading with small Caribbean islands agro-tourism that cultivates the island-branding, inseparable shipping non-perishable high-value products such as rum to from their own product branding, contributing to tourism in France. They were in the trial phase of shipping arrangements this lesser known destination. Using the small-scale chocolate at the on-set of the COVID shutdown.42 They have recently also factory as the venue, they have designed a fee-based seminar sailed from the smaller port of Santa Marta, Colombia, 300 miles and tasting program to educate the public about the history of from Aruba. the STP and their product. Their revenue for the typically sold-out seminars is a cash-stream to the firm, a revenue-generating form Food Safety and Quality of tourism and enhanced sales. In addition to its São Tomé on- site venue, this small company has joined forces with colleagues Assurance Standards in shops in Lisbon and the San Francisco Bay Area, to offer similar Whether produced by commercial enterprises or sold to the paid seminars and tasting experiences in spaces filled with photos HORECA trade by residential producers or by their aggregators, from São Tomé and video presentations from Príncipe, appealing the design of interventions must address the risks to the public to curious and educated “food tourists” intrigued by the exotic of consuming products than may be spoiled or tainted with a product and place. contaminant. This concern is amplified in the case of any economy heavily dependent on tourism, given their vulnerability Bio-Diversity and Uniqueness. Aruba is not currently recognized as to a compromised country reputation from a single outbreak, a destination for eco-tourism, but the STP experience illustrates such as salmonella, or from publicized incidents of even less that any species of flora or fauna that is determined to be scarce virulent food poisoning. Safeguards should include institutional or unique represents an asset of bio-diversity that reinforces the strengthening, such as those to permit local laboratory testing island’s identity.41 In the case of STP, at no cost to the country, they and periodic inspection of commercial producers. Beyond that have for many years welcomed Portuguese researchers, particularly broader institutional infrastructure, the requirements for food ethno-botanists, documenting both the botanical, medicinal, and safety clearance for start-ups or expansions need to be spelled cultural value of folk-remedies. Similarly, a teams led by a natural out in the terms and conditions for access to any public-private scientist from the California Academy of Sciences, has conducted support. It bears noting that the risk levels vary significantly regular studies on the island of Príncipe over the past decades, between various categories of foods. The least stringent identifying rare and unique species of plants, butterflies, birds, standards apply to most fresh horticultural products, focused insects, and reptiles. Even if the direct economic benefit to Aruba primarily on handling and hygiene protocols against E. Coli or from visits from bird-watchers or other nature-loving tourists is major pathogens, and spot screening for the presence of any eventually determined not to be potentially significant, the value of chemical residues if organic production norms are not used discoveries by such researchers as a contribution to island-identity rigorously. can be significant and at no cost or a minimal cost to the country. 39 The many detailed references to São Tomé and Príncipe are drawn from first hand research in STP in 2018 as a senior consultant to the World Bank and co-author of the Agriculture Chapter of the Country Economic Memorandum. 40 São Tomé and Príncipe, the world’s 170th largest country (Aruba is the 188th), measures 1001 km2 in total, São Tomé with 859 km2 and Príncipe 142 km2. 41 The 2018 study not only demonstrates this point but quantifies the value to the economy and society, “The Economics of Ecosystems and Biodiversity”, The Wolfs Co, Amsterdam and Aruba, January 2018, 42 The TransOceanic Wind Transport (TOWT) based in the Breton port of Dournanez can transport up to 1000 MT. It has recently sailed from Santa Marta in Colombia with coffee exported to France. 34 | Cross-Cutting Themes Beyond safeguards, producers may determine that quality designed with flexibility. Based on World Bank experience in the certification offers access to certain local buyers or increased Latin American and Caribbean region and beyond, the Productive profit margins. As mentioned, these standards may begin with Alliances Model for Aruba described hereafter summarizes local associations establishing standards and local certification. some of the typical features to implement a program funded Should buyers offer preferred access or premium prices for third- by an Agri-Bank or similar organization in order to guarantee party certification, that is an option, yet given the local market the effective and transparent allocation of funds and to foster focus and the cost of such certification, it is less likely. The value the development of efficient relationships among agriculture of USDA or FDA certification generally applies to export products, stakeholders in the island. The objective of the model would be to either fresh produce (USDA/APHIS43) or prepared foods (FDA). start building a national productive base and diversifying the job Yet any country or association can adopt its own standards to opportunities available as well as ensuring the critical integration coincide with the US standard, allowing producers to label foods of the agricultural and tourism agendas of Aruba. as meeting the USDA standards without claiming USDA or FDA A key difference between the typical model of Productive Alliances inspection. and the case of Aruba is that here the country does not yet have a network of producer associations. Nonetheless the fundamental Investment in Education and Training structure is instructive and relevant, using the Business Plan The emergence of a food and agricultural sector capable of as the key instrument to fund and to track investments. Given generating a significant contribution to the national GDP, offering that Component 2 includes a potentially large number of micro- new skilled and semi-skilled employment opportunities, necessarily producers, a full BP would not be practical, but instead needs to be means investing in human capital. Commercial enterprises simplified to be able to oversee the administration of assistance. adopting technology-intensive production schemes such as vertical farming, aquaculture, or food processing, may initially The Productive Alliance (PA) model, and its matching-grants scheme, need to depend on joint-venture partners or contractor operators. would focus on facilitating the incubation of small but prominent They may also depend largely on foreign know-how to service agribusiness initiatives by bringing together three core agents: the equipment, the IT controller systems, or perform laboratory producers, buyers and the provision of technical assistance. The tests for soil, water, nutrient or phyto-zoo-sanitary controls. The Agricultural Bank would support the agriculture producer´s access transfer of technology know-how will vary considerably from to credit, inputs, extension services, certifications, post-harvest case to case, but at a minimum will require enough educational processing, markets, and insurance. The support to the development preparation to master new skills. At the top of the education of a broader base of core agents promotes the dynamization of pyramid, some of the education may be too specialized to justify the local economy beyond the primary agricultural production. building in-country curricula for a small number of specialists. In The approach is based on the engagement with the private sector, such cases, Arubans with a good foundational education, such as tourism and retail stores on the island, to enable smallholders to those in the STEM program of the University of Aruba (SISSTEM), meet market demand for produce in terms of quantity, quality, and can study abroad to acquire that specialization. However, timeliness. The principles of the model apply to both individual and following the review of labor requirements discussed previously, cooperative producers (from the widespread local, smallholders many systems can be operated by workers with a good vocational and agricultural entrepreneurs, to those at the top end that background, such as that provided in the EPI program, who then are commercially active, bankable and incorporate high tech). receive hands-on training within the enterprise. Agricultural hobbyists present on the island could evolve to local food networks supporting the provision of niche products for the The case of micro-scale home producers is quite distinct. As tourism industry and basic items demanded by the local market. emphasized, there is no barrier to entry or requirement to participate Such approach is desired to reduce the transaction costs of small in growing or expanding existing gardens. However, the productivity individual initiatives. The Agri-Bank could also expand its scope of producers will depend in good measure on the ability to learn and consider beneficiaries that propose investment initiatives from the accumulated experience and experimentation. As family for self-consumption. These could also be subject to matching members from all walks of life should be encouraged to participate, grants and soft loans, given that some production surplus could there will be considerable variation between educational background be destined for commercial purposes, ultimately contributing to and aptitude. The constant data collection and analysis foreseen by the reinforcement of the island´s food security. These could also the Observatory will help to identify those with potential to expand be subject to matching grants and soft loans, given that some their productivity. While no specific investments in educational production surplus could be destined for commercial purposes, institutions are recommended here, children or adolescents in some ultimately contributing to the reinforcement of the island´s food of the participating families will likely self-select to pursue studies security. germane to food or agricultural production, processing or servicing. The training foreseen should take the form of demonstrations and The Business Plan (BP) is the instrument for the Agricultural Bank short-courses of production technology kits or systems identified as to link these three key agents. It describes the producer’s needs effective and within the grasp of a range of producers. for capital and services and proposes improvements to upgrade productive capacities and every other investment that is needed The Productive Alliance Approach to strengthen their market linkages. A BP of a PA would include elements such as the roles and responsibilities of the parties, a As the present analysis and recommendations have been developed feasibility analysis (inclusive of technical and financial), marketing in June of 2020 in parallel with the Government’s consideration of the best institutional vehicle to channel public and public-private agreements and the description of the activities to fulfill these, support to investments in the food and agricultural sector, we beneficiary co-financing and agreements, environmental impact have adopted “Agri-Bank” to refer to what that eventual vehicle assessment and mitigation measures, financial risk mitigation may be. Without more resolution and details about the structure measures, and the areas of capacity building through the continues and proposed dimensions, the proposed interventions have been provision of technical assistance. Cross-Cutting Themes | 35 FIGURE 3 CONCEPT: COMMERCIAL PRODUCER-BUYER RELATIONSHIPS In terms of implementation, the following steps describe the Step 3 - Preparation of Business Plans: Producers prepare main process involved in the model, from preparation to bank project Business Plans (BPs) guided by technical assistance approval and implementation of the approved business plans. providers and in close collaboration with the Agri-Bank and commercial partners. Step 1 – Outreach and Information Campaigns: This involves the preparation of workshops with basic technical assistance Step 4 – Selection of Project Business Plans: The BPs prepared for potential beneficiaries and stakeholders to understand the are evaluated from a technical, financial, environmental and project cycle starting with the mechanism of participation, social feasibility standpoint, emphasizing climate-resilient preparation, implementation, and monitoring of the investments and climate smart agricultural practices Approved investments. business plans according to predefined criteria, are selected for the provision of a matching-grant and a soft loan. The Agri- Step 2 – Preparation, Evaluation and Selection of Project Bank locks the entire allocation to the selected beneficiary. Proposals: Producers (individual or organized) access technical assistance to prepare initial investment profiles that are then Step 5 - Implementation: The Agri-Bank follows the screened and evaluated according to eligibility criteria. Eligible disbursement schedule defined in the business plan. Technical proposals are selected by the Agri-Bank to continue with the assistance validates the fulfillment of goals and proceeds with business plan preparation stage. the following disbursement flow. FIGURE 4 THE PRODUCTIVE ALLIANCE MODEL 36 | Cross-Cutting Themes Matching grants will be expected to co-finance: (i) works in Aruba. To this end, collaboration with public education (e.g. land preparation, minor productive and post-production institutions and use of new digital technologies to prepare infrastructure, packing houses), (ii) goods (e.g. farm and agriculture-specific seminars to expand sectorial knowledge processing equipment, tools and inputs, water management and promote the preparation of new business plans, could be systems, hydroponics, protected agriculture, packaging considered. material, transportation), and (iii) technical services (e.g. specialized assistance, business support services). As a The minimum technical capacity to be allocated in the Agri complement to the allocation of matching grants and soft Bank to start implementing the PA model would be composed loans, some initiatives could require that additional guarantee by an agribusiness specialist leading the unit together schemes like a guarantee fund or other risk insurance with other experienced experts in the areas of agricultural mechanisms are made available by the Agri-Bank to enhance finance, irrigation and water management, management the resilience of vulnerable projects and beneficiaries. Some and administration (including bookkeeping, procurement, analytical work will be required to determine what risks they financial management), marketing and specialized short term should address and how. Other countries will provide limited technical assistance regarding the implementation of highly guidance, as such schemes usually address the vagaries of technologically innovative approaches. The expansion of the nature (only occasionally the vagaries of markets) and their unit should be evaluated on a continues basis, considering impact on loan repayments. Also, existing schemes often the potential demand of funds coming from the information grew out of the vulnerabilities of traditional farming, not the campaigns. particular needs of nascent small-scale high-tech agribusiness In order to ensure that small producers are able to market trying to establish new markets. their produce to hotels, tourists and the HORECA sector, the island would also need to implement minimum food safety It is uncertain if the Aruban insurance industry will offer certification capacity to make sure that facilities, production to remove, in the short to mid-term, a considerable share of and manufacturing practices comply with food safety and the risks to entrepreneurs and lenders in Aruba that will be quality international standards or are produced following identified. Hence, a conducive alignment of interest between organic and fair trade considerations. Due to the lack of public the stakeholders needs to be established so that risks are infrastructure in this area, the Government could count on an shared fairly and don’t discourage any otherwise enthusiastic initial collaboration with private laboratories or third-party party. Repayment of loans to agribusinesses could be certification agencies while building the needed institutional conditional to demand from offtakers being as anticipated by capacity at a national level to attend these certification needs all parties, for example, and in the case of Micro-Scale Home after achieving certain scale that justifies the investment. and Community Production, the understandable interest of Santa Rosa in detailed reporting needs to be balanced with the Ideally, business plans should be developed jointly between resulting hassle for households. the individual/organized producers, buyers and the service providers contracted as part of the subprojects. To minimize No commercial insurance against crop or livestock losses seems bias and rent-seeking, it is recommended that the service to be available in Aruba at present, but the insurance industry providers developing the business plans are different from the has some experience in other relevant lines such as machine ones supporting the selected business plan subprojects during breakdown, business interruption, theft, and liability including implementation. To ensure good quality, the selection criteria product and environmental pollution. Including the insurance for the investments could include the following: industry as a stakeholder to agricultural expansion in Aruba will help to alert them early on to the need to adapt products •Technical feasibility (e.g. production capacity and quality, use to new use cases and customers, contributing to secure of technology and best agricultural practices); investments. Also, the industry might contribute its expertise in quantifying risk even when it is not yet ready to properly •Financially viability (e.g. financial sustainability beyond the insure crop and livestock production, thus providing guidance duration of project support); to policymakers and entrepreneurs. Furthermore, insurance companies are often important institutional investors eager •Market linkage strength (e.g. quality of market analysis, for new investment opportunities, and insurers in Aruba may identification of technical assistance needs, participation in be interested to contribute to investment in commercial marketing events); agriculture to the extent that (current or future) investment regulation allows. •Producer´s and buyer´s capacity (e.g. quality of production planning, quality control and traceability, identification of The provision of Technical Assistance (TA) and training is production bottlenecks); critical and, therefore, such providers (either individuals or consulting firms) need to be integrated into a positive list agreed •Social aspects (e.g. potential for job creation, belonging to a with the Agri Bank to ensure the quality of the investment disadvantaged group); and, proposals from preparation towards implementation. The TA should be continuously provided by specialized technicians to •Environmental sustainability (e.g. the subproject’s promotion ensure the quality of the investments. Especially given the need of improved or climate-efficient production practices). to incorporate innovative approaches and new agricultural technologies due to the water and land limitations existing Cross-Cutting Themes | 37 38 | PRELIMINARY ANALYSIS OF AGRO-LOGIS- TICS IN ARUBA Key messages • International trade logistics in Aruba have a well-functioning system, with a number of shipping companies serving the island, importers- distributors that work with a set of wholesalers that distribute to the retail sector, as well as to the hotel and restauration industry. • The ability to consolidate containers has made of Florida’s ports a top pick for fresh products, even when these could be imported from other closer locations. • Due to the low scale of exports, agro logistics considerations for export potential products are theoretical at this stage. Further analysis should be developed based on the implementation and support of the agricultural sector for local and export logistics services. However, the port facilities are new, and have 40 positions for reefer containers. Total imports of food during 2019 were Afl 281 million while exports were Afl 3 million (representing the 1.1% of imports value) with an average of Afl of 1.3 per ton exported44. • Farm to fork logistics are already in practice and could be strengthened. In this sense the role of aggregators, or generating supply consistency should be further developed. • Local market agro-logistic chain would be develop based on the new potential production. Every link in the chain that connects farms, cold chains, aggregators and processors to the wholesalers, retail store, consumers, hotels and restaurants may be analyzed taking into account the characteristics of the new agro-products. • From a policy perspective the idea of enhancing the farm to fork model, together with the analysis of possible export potential products, in a context of innovation and technical agricultural assistance is desired. • Agro-logistics could benefit of new technologies linking farmers to their clients. 44 Central Bureau of Statistics, Aruba. Preliminary Analysis of Agro-Logistics in Aruba | 39 Aruba Trade and Connectivity Total imports were 6% lower in value than same period in previous year (first quarter) and 8% lower in volume. Total exports saw a 1.7% reduction in value and 2% in volume in the same period. Retail Aruba, from a logistics perspective, faces sea-lock challenges. stores did not suffer from stock shortages during the peak of the It depends on air and shipping connectivity with the rest of pandemic, with exception of some consumers behaviors at the the world to obtain basic supplies like food and beverages. In beginning that demanded more than usual quantities of basic this situation, logistics costs are generally higher compared merchandise45. to continental countries. As with other islands, economic Main import origins are shown in the table below. Trade coming diversification is non-viable at this point. In particular, the from the Americas and the Caribbean accounts for 75% of total agriculture sector is small, with poor soil conditions, dry weather share, for the first quarter 2020. and scarce water. Aruba, from a logistics perspective, faces sea-lock challenges. It FIGURE 6 depends on air and shipping connectivity with the rest of the world IMPORTS SHARE. 1ST QUARTER 2020. to obtain basic supplies like food and beverages. In this situation, logistics costs are generally higher compared to continental countries. As with other islands, economic diversification is non- viable at this point. In particular, the agriculture sector is small, with poor soil conditions, dry weather and scarce water. Ninety percent of imports of goods and services arrive by sea, and remaining 10% by air. Shipping services are good. International trade logistics in Aruba have a well-functioning system, with a number of shipping companies serving the island, importers- distributors that work with a set of wholesalers that distribute to retail sector, as well as to the hotel and restauration industry. The port of Barcadera is the major gateway where food imports arrive. It’s a new facility with modern operations. For air cargo, The maritime network for containers in the Caribbean consists Reina Beatrix international airport has its own cargo area. of two components: intercontinental traffic through one of several transshipment hubs in the Caribbean, and the inter-island Caribbean feeder network that in the north has Miami as a main Even though first quarter statistics for total imports and exports hub, and in the south Trinidad. For intra-Caribbean traffic Curacao show a decrease, the pandemic has shown strength in the and Trinidad stand out as hubs. This dual system defines two type logistics services sourcing Aruba. Food imports increased a 2% in of routes in the international maritime container network: Feeder volume, during the first quarter of 2020 compared to same period routes (local routes), and main routes46. 2019, and decrease 3% in value. This is explained by a decrease in Compared to other countries, Caribbean islands have higher costs to import and export, but the process (custom clearance and imports from USA and Europe, replaced by more food imported documentary compliance) takes less time.47 Cost to import is 72% from Asia, South America and the Caribbean. higher for the Caribbean Island States compared to continental countries in the region; while cost to export are 10% higher. FIGURE 7 FIGURE 5 COST AND TIME TO IMPORT POTENTIAL STRENGTHENING AND EXPORT 2019. OF FARM TO FORK MODEL. Cost toC ost to 17,816 1028 699 82 68 18,154 7,147 596 6 34 139 1 66 7,366 4,587 622 579 1 37 1 20 3,661 1,151 947 520 2020 2019 45 Data from Importer-Distributor interview. 46 Connectivity for Caribbean Countries, an initial assessment. Briceño- 353 Garmendia, Bofinger, Cubas, Millán Placci. 47 Doing Business records the time and cost associated with the logistical process of exporting and importing goods. 40 | Preliminary Analysis of Agro-Logistics in Aruba During 2018 a total of 160 container ships arrived in Aruba, an of 40ft container was US$ 4750, and US$ 5500 for a refrigerated average of 3 ships arriving every week. These ships carried an container serving Miami to Aruba. The route to EU had an average average of 1336 containers each, or an average of 4008 containers price of US$ 4500 for a 40ft container and U$ 6250 for a reefer weekly. Due to limited economies of scale, the containers will container. Once arrived at the port of Barcadera, costs related to arrive full and will leave empty. This is common for any situation handling were about U$ 1200.49 in which there is a trade imbalance. Weekly services would include a single service coming from Miami King Ocean, bringing cargo Most shipping of food containers is consolidated, with exception for two freight forwarders. Caribbean Feeder Services has a of bananas and pineapples from Costa Rica that would come in route coming from Jamaica and the Dominican Republic, and full container load. In fact, the ability of consolidating containers Streamlines comes from Rotterdam, via Dominican Republic.48 has made of Florida’s ports a top pic for fresh products. Even when Nirint and CMA CMG also have services scheduled for Aruba from these could be imported from other locations nearest, the know- Europe. Due to economies of scale and low number of providers, how to consolidate cargo from different exporters at Colombian costs in the routes serving Aruba are high. In 2017, average cost ports are limited, compared to USA.50 FIGURE 8 PORT CALL NUMBER OF ARRIVALS, 2018. Within the region, Colombia and Dominican Republic are trade partners. In terms of connectivity, both countries are on the top five of most-connected to the world, measured by the liner shipping connectivity index, with 39.1 and 33.5 for Cartagena and Caucedo ports. Panama is also a regional partner. There is scarce evidence of smaller feeder services by ships, once arriving from Venezuela with fresh products. However, linkages by ferries are being studied, particularly with Curacao and Suriname. There is an idea of having a fast ferry from San Nicolas that could create export opportunities for local enterprises to Curacao51. 48 ECORYS Aruba, Curacao and St Maarten study on price developments and logistics in the region 2017. 49 Op cit. 50 Importer/distributor interview. 51 Economic Policy Note 2019-22, Aruba Ministry of Finance, Economics Affairs and Culture. 52 The liner shipping connectivity index (LSCI) is an indicator of a country’s position within the global liner shipping networks. It is calculated from the number of ships, their container carrying capacity, the number of services and companies, and the size of the largest ship, calculated by UNCTAD. 53 The Port liner shipping connectivity index reflects a ports’ position in the global liner shipping network. A higher value is associated with better connectivity. The Port LSCI is set at 100 for the highest value in 2006. Preliminary Analysis of Agro-Logistics in Aruba | 41 In terms of food imports, most of the food is imported from South America. Pork is sourced from the European from the USA and EU (mostly Netherlands), with very few Union, while fish and seafood from Asia, Latin America local productions. Fresh vegetables and fruits come from and USA. In terms of regional trade, Colombia, Panama, USA and Latin America, with bananas and pineapples Curacao, Dominican Republic and Costa Rica are coming from Costa Rica. Beef and poultry come mainly partners in terms of food imports. Because Caribbean islands share similar situation, importing boat that goes from Aruba to Curacao and Bonaire. And most of what they consume, local internal Caribbean there are shipping services that link different ports in the trade is scarce. There is low local food production to trade Caribbean, as mentioned. However, trade data shows low between Caribbean States, and transport costs for doing volumes of interisland trade at Caribbean level, as can so are high. Even though there are linkages with shipping be seen in the next table. Aruba trades with Panama, and freight connectivity, each of the island will prefer to Colombia, Curacao, Dominican Republic and Costa Rica directly import from either Miami, European Union or Latin in the region, accounting for 9.2% of total share for the America. Aruba has a connection with “Don Andres” a feeder first half of 2020. 42 | Preliminary Analysis of Agro-Logistics in Aruba Even though other islands in the Caribbean and in other Swissport Cargo Services / Aerocargo, American Airlines regions have ferry services for passenger, Aruba does Cargo, Amerijet Inc., ArubaPort, Cargo & Express / DHL, not have connection to other countries by this mean of Fast Delivery Services N.V. / UPS. Air cargo tariff average transport. A main barrier to this way of transportation account for about U$ 3 dollars per kg, to the USA in cargo is migrations and customs coordination for a fast ferry flights, or U$ 30 dollars in passenger flights54. service that would need custom clearance in a very Exports of goods in 2019 was 27% by air, and 73% by short period of time. This kind of services are oriented ship, in value. That figure though is only 1% of air cargo to passengers traveling with their personal luggage and in volume for the same period. For imports, 10% share is that may also carry their cars. There was a feasibility imported by air cargo, and the rest by sea55. study commissioned by the governments of the ABCs Furthermore, Aruba has a Free trade Zone that provides islands, under the supervision of the Development Fund with diverse trade services: of Aruba. The idea was to resemble the fast ferry services Bulk import and export operated in the Canarias Island, in Spain. However, public Freight consolidation and distribution coordination of agencies would be needed, besides the Retail sales (to tourists) investment on the ferry itself[9]. Drop shipments (or indent trade) Air cargo is managed at the Aeropuerto Internacional E-commerce Reina Beatrix, home to a variety of companies specialized Showcasing in forwarding air cargo. Most companies have daily During 2019, the Free trade Zone imported 3% of total cargo flights to the Americas and the United States. imports in value, and exported 42% of total exports in There are at least five companies working with air cargo; value[1]. MAP Figure 8. Aruban Shipping Routes The following map show the ship- ping lines arriving to Aruba, Source: Author’s Map based on Mar- itime Routes[10]. [9] Op. cit. 54 Data from interview. Specific tariffs are at the Airport Website. https://www.airportaruba.com/charges. 55 Central Bureau of Statistics, Aruba. [1] Op. cit. Preliminary Analysis of Agro-Logistics in Aruba | 43 Agro-logistics in Aruba Within Aruba, logistics services include a number of importer and distributers that have their own transport fleet or provide with transport solutions to their clients, either local population or tourism sector. There are at least 10 main wholesalers of food, and 5 big importer/distributors,[1] with a total of 32 importers register in the chamber of commerce.[2] There is availability of specialized transport that assure cold chains, proper storage facilities and warehouses at the wholesalers, two major distribution centers and well served communication by road. Even the farmers have proper vehicles to move their production. Normally the hotels that buy locally will get the food delivered to their own pantry. Food waste considerations are taken into account by hotels, with initiatives to buy smart, reduce serving sizes to avoid left food on the plate, and provision of left overs to pig growers in Aruba. Inland logistics for current providers to hotels could be improved in terms of hotel delivery times according to the field interviews. Currently hotels will receive their purchases from 8am to 3pm, which in general creates a waiting line of different providers. If a single distributor arrives 8am and results to be the first one, downloading meat, poultry or produce will take half an hour on average, versus up to two hours when more than one provider arrives. In this sense more coordination could be achieved for hotels delivery. A simple solution could be expanding delivery time at the hotels. A more advance solution would be working with schedule delivery time based on an appointment system. Even though providers have tried scheduling a delivery time in practice it does not work. When a truck arrives to the delivery pantry of the hotel, other provider could be already there. Customs operating times and procedures are also mentioned as an area of improvement by importers: there could be some time saving on the customs clearance time, based on opening hours and clearance procedures. Thinking on export potential for Aruba, current example of skin care products exports shows longer inventory times to respond to the production cycle. Even though this is not food, it’s an agro based skin care industry. In this case, the base of the products is locally cultivated aloe vera. However, the rest of the inputs are imported from the United States. Inventory times are longer, and working capital higher due to the shipping connectivity schedule with the United States. It takes six weeks for a production cycle to be completed, while exports average a container per week. Since exports are very few, shipping tariff for exports are accessible since it’s on the shipper’s interest to sail with cargo. Air freight tariffs are 4 to 6 times higher than shipping. An average tariff for import of food by ship would be 1 U$/kg while by plane would range between 4 to 6 U$/kg. 44 | Preliminary Analysis of Agro-Logistics in Aruba The case of Goshen Farms: an example of i) agro-tourism experience ii) linking local products to tourism and local consumers and iii) taking the most of agricultural technical advice. Goshen Farms was born as a social enterprise. Initially it was a space for people with addiction problems to recover, combined with a farm that produced fruits and vegetables while providing vocational training. The project later morphed to offer an agro- tourism experience. Goshen partnered with a tour agency to create the “Farm to Table” experience, in which visitors take a tour of their field, then cook and enjoy an Aruban dinner while taking in the sunset view from the farm. They also offer the “Goshen Smoothie”, which is made with local ingredients, including the Aruban cucumber and moringa harvested from the farm. Furthermore, Goshen house is an antique property dating from 1923, so also a local landmark to visit. They have four apartments for rent where tourists can stay. Before COVID 19, they had a 4-month advance reservation queue. They produce their own solid and liquid compost in partnership with a catering company and an airline. A turning point in Goshen farm productivity was the possibility to access technical advice. After hiring an agronomist from Colombia, their product selection and yields improved. A constraint that Goshen has is lack of people with agriculture knowledge and the lack of motivation to work in the field. Having the agronomist has been key for their production, which includes Aruban cucumber, string beans, moringa, mint, basil, lemon grass, peppers (for the producer of pica papaya sauce). Their products arrive at the local grocery stores at a price point of 0.25$ to 0.50$ florin cents over the imported cucumber for instance, with a difference on the quality and taste, which makes these locally produced cucumbers preferred. Mint and lemon grass are sold for tea and beverages in restaurants and hotels. Goshen is evaluating starting hydroponic production of spinach and leafy greens. Harvested products arrive to the market on the same day, with Goshen’s own transport fleet. | 45 Locally produced lettuce from other hydroponics New technologies in agro-logistics producers are sold in the restaurants and grocery stores Communication technologies have been facilitating the at the same price of an imported lettuce of similar quality, connection between farmers and markets, and farmers and direct sales to consumers. Furthermore, better but with higher nutritional value, since they came with coordination on the logistics chain can be achieved based the roots, and with longer shelf life. However, for local on communication technologies. In particular mobile consumers the choice is different, a romain lettuce cost phone applications enable market agents to better half the price of the locally produce butterhead lettuce, coordinate product supply and demand, strengthen the first at 3.25$Afl and the second at 7.50$Afl[3]. On existing trade networks, facilitate products to reach a average, logistics costs in imported food may range critical mass, and enable products to be delivered cost- effectively to new markets. between 20% and 22% of final price[4]. Supply chain efficiency can be impacted by access to infrastructure, transportation services, access to credit As for any island state, the logistics risk that remains is and access to inputs. The literature review shows that a that a natural disaster may impact the sailing and flight logistics system that uses communication technologies schedule of current connectivity. If any of the shipping could provide support to facilitate i) collection by lines would be interrupt for some period of time that will organizing the gathering routes; ii) aggregation by permitting markets with sufficient critical mass to serve create depletion of stocks in the warehouses. During retail, wholesalers and tourism sector, and to provide hurricane Maria the Island already experience delays with timely information about the products available; due to airport closure in Puerto Rico and port closure in iii) delivery by coordinating with other producers and Miami. This means that buffer stocks are needed to avoid transport services providers to organize times, dates problems of scarcity of basic food. However, during the and volumes to be provided[5]. In Guatemala, a platform pandemic, they were not major supply chain disruptions called Digitagro was created to link women farmers with their clients: daily school menus. The platform has and stores were supplied. three components, an e-commerce site for schools to buy the menus, a section of extension videos for farmers New technologies in agro-logistics to improve production skills, and section for impact Communication technologies have been facilitating the evaluation. connection between farmers and markets, and farmers and direct sales to consumers. Furthermore, better Greener transportation technologies coordination on the logistics chain can be achieved based Green technologies are under evaluation and already into on communication technologies. In particular mobile practice for short haul transportation. The Netherlands is phone applications enable market agents to better investigating possibilities to use electric planes for flights between the ABC islands. There had been pilots already coordinate product supply and demand, strengthen of planes flying up to 160km. The technology is new, and existing trade networks, facilitate products to reach a commercial electric routes are not jet into operation. critical mass, and enable products to be delivered cost- However, there is an interest to conduct a feasibility study effectively to new markets. to connect Aruba, Curacao and Bonaire[6]. There are already hybrid and electric planes studies for short haul trips. Furthermore, new batteries technologies that could The case of Bucuti & Tara Beach Resort: sustainable store solar energy could provide with environmentally friendly flights for short distances. approach on tourism. In India, the Aditya Kerala’s ferry is run with solar panels, An award-winning resort in Aruba is leading the way making it sustainable, and 30 times less expensive to by adopting a sustainable approach to tourism. It’s operate than regular ones. This is a passenger boat, commended for innovations in, among others, water crossing the Lake Vembanad[7]. Different considerations consumption, waste disposal, sewage treatment and correspond to open sea ferries, where navigation is complex energy use. They also pursue a policy of purchasing though. There are also cargo sailing vessels in operations. Their locally when possible. For example, shampoo bottles routes are mainly in Europe, traveling to the Iberian are sourced from Aruba Aloe. Beyond this, they Peninsula, Scandinavia, Brittany, and Cornwall in the reduce food waste by delivering leftovers, amounting United Kingdom, but also to the Caribbean. They transport to 300 kilos per day, to local farmers for pig feed tea, coffee, spirits, wine, beers, chocolate and olive oil[8]. and compost. For more details on the sustainability Finally, the next map shows the limited arable land in program visit http://www.sustainablesids.org/wp- Aruba in yellow, while the green areas represent primarily nature areas. The spatial constraints become immediately content/uploads/2017/01/COE-Sustainable-Tourism- apparent when considering that the remaining areas are case-Bucuti-Resort.pdf heavily urbanized. Sea connectivity to both the capital Oranjestad and the adjacent tourism hotspot of Noord, as well as to Barcadera and San Nicolas to the south combined with good road infrastructure make for adequate inland logistics. 46 | Preliminary Analysis of Agro-Logistics in Aruba Figure 9. Aruba Spa- tial Development plan card. Source: Spatial Development Plan Aruba 2019 (link). [1] Based on interview data and google directory. [2] Interview data. [3] Prices at the local supermarket in August 2020. [4] According to local producers and importers interviews. [5] World Bank 2017. ICT in Agriculture: Connecting Smallholders to Knowledge, Networks and Institutions. Updated edition. Washington DC, World Bank. [6] According to the local newspaper. [7] https://www.eco-business.com/news/indian-solar-ferry-flies-flag-for-cleaner-cheaper-water-transport/ [8] Fairtransport and TOWT. [9] Caribbean ferry services can be seen at http://ferris.guegue.info/ferry/. [10] http://www.cocatram.org.ni/rutas/ Preliminary Analysis of Agro-Logistics in Aruba | 47 Assessment of agriculture related risks • Risks inherent to agriculture production (e.g. variability of Risk is the possibility that things don’t turn out as expected. climatic factors; animal and vegetable health; management of Often it is distinguished from uncertainty by defining production and resources including wrong decisions regarding risk as quantifiable uncertainty. For example, historical technology or equipment malfunction) meteorological statistics may allow to estimate future • Market related risks (notably changes in demand and precipitation. The absence of data, on the other hand, makes variability of the prices for inputs and outputs, sometimes quantitative assessment of risk very difficult. driven by volatile exchange rates) • Risks related to the economic and business environment Related to risk is the concept of constraints, that is: factors (e.g. disruptions to logistics chains; changes in regulations whose limited availability can hinder the expected outcomes. regarding quality standards) Constraints typical for agriculture activities include access Climate change increases the uncertainty and variability of to good seeds, fertilizers and other chemical inputs at the factors like temperature, precipitation and wind speed, which right time; availability of labor; access to information and in turn increase the risk that technology does not work as markets; and access to finance. Risk is often perceived as intended or that logistics for farm inputs and outputs are one constraint, as it discourages the pursuit of activities that disrupted. Crop cycles can become erratic and more difficult to would be worthwhile if everything goes as planned. But risk manage, bushfires and changed cattle migration patterns can also explains some constraints; for example, the uncertainty of threaten farm land, and vulnerability to disease and pests will agriculture profitability due to climatic variability and market differ. Increased volatility of agriculture production has already price fluctuations often hinders access to finance and the led to increased volatility of market prices, and extreme adoption of technologies that offer better yields with upfront weather events have disrupted supply chains and damaged investment but at higher volatility. In such a scenario, reducing storage facilities. Increasing numbers of riots caused by food risk reduces constraints. price spikes have disrupted business in different parts of the Some constraints specific to Aruba have been identified in the world. Lastly, climate change also reduces the confidence of Task Force: Food Security and Safety’s Result Book, including quantifying future risks based on past experience. a local lack of expertise and food safety / quality control In Aruba, rainfall was lower than the 1981-2010 average in regulations. every year between 2015 and 2019, average and monthly maximum temperatures were consistently higher, as was Risks related to agriculture can be classified in three maximum monthly windspeed according to the Departamento categories by their nature: Meteorologico Aruba. 1981 2015 2016 2017 2018 2019 2010 471.1 134.24 27.9 3913 39.5 217.6 28.1 28.6 28.8 28.6 28.2 28.7 31.5 32.23 2.23 2.1 31.5 31.9 14.51 6.61 5.1 14.51 5.11 4.6 Each risk needs to be (i) identified, (ii) assessed, and (iii) insurance for remote locations in countries with great spatial managed. variation of risks, or when the existing risk information do Agriculture production varies from one place to the other: not reflect all crops or production methods. Agriculture risk rainfed farming is exposed to other risks than irrigated repositories, often maintained by Ministries of Agriculture, farming for example. Therefore, the risks of relevance need also aim to assess risks. Correlating historic weather (and to be identified in each place, usually from past experience. other) data with historic crop yield statistics provides a basis Collections of historic agriculture risk data, for example by for early estimates of seasonal production but also highlights national or subnational governments, tend to include the vulnerabilities, thus allowing to prioritize which risks are most risks that have been identified as most relevant. At times impactful (and if desired relate them to other objectives like consultations with local farming / herding communities social protection and gender equality). The primary objective of are also necessary, for example when designing agriculture risk assessment is to inform risk management. 48 | Preliminary Analysis of Agro-Logistics in Aruba Risk management can take the form of most Caribbean countries, but its developed economy and Mitigation (i.e. reduce the likelihood or severity of adverse built assets increase the country’s exposure and can make the events, e.g. via irrigation or vaccines) financial impact from natural disasters more devastating; the Transfer (typically via insurance and insurance-like mechanisms Global Assessment Report on Disaster Risk Reduction 2015 such as hedges) estimates Aruba’s average annual loss from earthquakes at Coping (i.e. ex-ante measures to increase the resilience to USD 16 million and that of storm surges at USD 26 million adverse events, e.g. via social safety nets) In these general lines, the situation of Aruba is no different • Rainfall patterns in Aruba have been unreliable in the past, than that of other countries. But as agriculture in Aruba differs annual precipitation has shown a downwards trend, and long considerably from other countries, risk assessment will be dry spells have been observed different. • The existing farming sector is unorganized, cooperatives or Some of the differences impacting agriculture risk assessment associations are absent in Aruba, as compared to other countries, include: • Aruba has good ties to the Netherlands, a world champion in • Minimal agriculture so far, as food needs for local and tourist intensive agriculture under restricted conditions population has been met almost entirely with imports • Aruba is not a member of some key international organizations • Aruba being a sea locked country, cross-border supply chains such as the Inter-American Institute for Cooperation on are vulnerable to disruption Agriculture • ood needs depend substantially on tourist arrivals (which in • Unlike other countries where most agriculture production turn provide the US$ for food imports) which are vulnerable to goes back centuries, Aruba is in the position to shape the future disruptions of agriculture in the country and has far greater influence on who will grow what where and how – within the limited options • Tourism faces a reputational risk related to food poisoning; allowed by the circumstances likelihood may be low but the severity can be high • Fiscal space for government engagement in the development • Less vulnerability to world market food price volatility as of agriculture is limited at present - once the coronavirus GDP per capita in US$ terms is high, hence low motivation for pandemic is under control and tourist flows return at scale, nutritional self-sustainability fiscal space may be more favorable but the motivation for increased local food production might be felt less acutely • In normal times, tourism provides income to most of the labor force, resting motivation to work in agriculture The two pillars (commercial, widespread residential) discussed in this report have very different risk profiles. • Rather unfavorable conditions for crop growth due to the lack of ground water and the poor soil quality, along with the limited Micro-scale home and availability of land[1], agriculture expertise, local providers of Community Production inputs, and labor force Back yard vegetable production is exposed to climate volatility • Limited economies of scale and insufficient space for the and pests. It may currently be constrained by limited expertise production of high calory staple foods in major quantities and financial resources which, if available for example in the form of technology kits and the corresponding financing, could • Limited local infrastructure to ensure food quality and safety diversify and expand production. This investment in time and (both for imported and for locally produced food) money however is risky in several ways: growers may not achieve the expected outcomes due to the lack of suitable • A local financial market of limited scale practices antecedents, insufficient technical support, and inputs (seeds, fertilizers, pesticides, soil improvements) not • A high – but largely unknown – share of local food production working as expected. Management of small scale production at household levels for own consumption that has worked well so far may encounter unexpected difficulties when scaling up. After all, there are no publicly • Compared to other countries a less resourced Ministry of available antecedents or case studies of diversification beyond Agriculture which does not provide much extension services, the crops grown today and of scaling much beyond household risk monitoring & assessment, or crop yield and meteorological needs. Both diversification and scaling would be needed if databases backyard farming is to contribute to Aruban food security beyond the household or narrow community level, and both • Predominance of greenhouses at commercial food crop hence carry uncertainty. production, which requires higher upfront investment but reduces the vulnerability to climatic factors within moderate Backyard producers (as well as schoolyard, rooftop and other ranges of variability micro producers) that invest to serve markets beyond their own consumption face the market risk of uncertain demand • Aruba is less likely to experience a hurricane event than Preliminary Analysis of Agro-Logistics in Aruba | 49 and uncertain prices for their goods. So far commercial the insurance industry and the Government to assess and farmers found this risk to be negligible in Aruba, but this sustainably share these risks. Aggregating farmers in could change when market dynamics shift in response to the associations or cooperatives tends to increase their outlook Government’s activities to grow local food production. Food for suitable insurance products and conditions, and should producers in Aruba also face the risk of changing food safety be considered for both backyard and commercial Aruban and quality regulations which could require changes to their producers. production or make it unsustainable. Beyond production risks, commercial farmers are exposed to similar market and environmental risks as backyard Given their lack of organization and formalization, and the producers, but their vulnerability is greater because their small size of each, backyard producers will struggle to find livelihoods depend on the venture and loan defaults can much commercial insurance to transfer their risks. The preclude them from credit markets. Government of Aruba may thus consider some scheme to limit their risks, possibly in exchange for some degree of A qualitative evaluation of agriculture risks in Aruba formalization and / or regular reporting that would facilitate suggests that the market risk can be controlled by the centralized planning and risk monitoring / management. Government if some food imports are limited while there is supply of locally produced food of acceptable quality and Aruban society and tourists are vulnerable to food quality price, so as to match demand to supply. Likewise, controlling risks that can range from disappointment and rejection the amount of imported food will help control the price of to major scale food poisoning. The island of Aruba is locally produced food. Such a measure could react very furthermore vulnerable to public health and environmental flexibly to varying (and at present uncertain) future tourist risks from backyard (and other) crop production, for arrivals without threatening food security. The market risk example insects multiplying in water tanks or fertilizers and for imported agriculture inputs, however, will persist while pesticides contaminating soils and the sea (which threatens Aruban agriculture production depends on them. tourism as well). To the extent that backyard farmers take credit from the financial sector to expand their production, As long as Aruba does not aim to export agriculture produce, credit default risk is created. local agriculture is not very vulnerable to environmental risks At present, the risks to society seem higher than those to the that are beyond the control of the Government. For example, backyard gardeners themselves, considering also that little changes in pertinent regulations can be discussed with all is known about their production. As they respond positively stakeholders and allow time for them to adapt as necessary. to incentives to scale up market-oriented production, regulatory adjustment may be needed to find a sustainable Production risks are more difficult to estimate at this new balance of production, market and environment risks. point, as it is unclear what production methods (with their particular inherent risks) will prevail. Given that the country’s Commercial farming conditions favor intensive production under controlled expansions and start ups environments, and that exposure to natural hazards is not as threatening as elsewhere in the Caribbean, production Expanding existing commercial farming enterprises seems risks can also be expected to be manageable. to carry less uncertainty. They have a track record of several years, and some have expressed interest in expanding their Whenever there is suitable historic data, it is customary operations. Some have also shared their worries, which to assess the risks that different crops are exposed to concern constraints (access to finance, land, labor, water) in a matrix that distinguishes likelihood and severity of rather than risk. These constraints, however, suggest that adversities, based on historic geospatial records that may simply scaling up existing production methods has its limits, also help identify and incorporate trends indicative e.g. of and that more innovative ways to use the scarce resources climate change. In Aruba, the lack of historic data on crop and are advisable, such as vertical hydro- and aeroponics with livestock production and the lack of suitable data on hazards a higher degree of automation. This transition – possibly present a considerable obstacle to quantify uncertainty. embraced by startups - carries new risks that will depend The most recent estimation of the potential damage from on the path chosen. Innovative growing systems will likely natural catastrophes, found in the 2015 Global Assessment be imported to Aruba from outside, so the reliability of the Report on Disaster Risk Reduction, suggests that the highest machinery and other inputs in general and in the Aruban average annual losses from earthquakes and cyclonic environment will be uncertain. Depending on the model, the winds occur to residential property, while commercial and providers of such technology may share some risk, e.g. in industrial services incur USD 3.9 and 1.6 million only. It is not the form of warranties. But more or less production risk will possible to reliably quantify future damages to agricultural remain with Aruban entrepreneurs and those who fund the production from these hazards, let alone others such as necessary investments. Future discussions will be needed floods, extreme variations in precipitation, temperature and between entrepreneurs, funders, providers of technology, windspeed, or plant and animal health. [1] 2003 data from https://www.nationmaster.com/country-info/profiles/Aruba/Agriculture quantify Aruba’s arable land at 2,000 hectares, ranking it 187th out of the 198 countries surveyed 50 | Preliminary Analysis of Agro-Logistics in Aruba FIGURE 15 EXAMPLE FROM SUB-SAHARAN AFRICA Flood Locusts Where data permits such analysis, it can be consolidated instead. This analysis also allows to prioritize risks and guide across crops and hazards and allows to classify risks as (i) the cost-benefit analysis of mitigating measures: which haz- frequent but not severe (“business as normal”), (ii) typical- ards to address with which mix of mitigation, transfer and cop- ly insurable risks whose severity and frequency threaten the ing within the boundaries of the possible (e.g. the availability farmer’s existence, and (iii) catastrophic risk that threaten the of the corresponding insurance, the widespread provision of existence of many farmers, can lead to market failures, and drought-tolerant seeds, or the loan guarantee mechanisms to can be difficult to insure, possibly requiring government action facilitate financing for irrigation systems to farmers). Helpful questions to evaluate every available risk management option are: Does it reduce the hazard? Does it reduce the exposure? Does it reduce the losses? Does it compensate ex-post for losses suffered? Does it improve yield or productivity? Can it address multiple risks? Is it scalable? How easy and fast is it to implement? Could it adversely impact the environment (tourism, …)? Does it advance the desired transition to a different form of (more sustainable) agriculture / tourism / …? Expected time for return on investment? Relative cost? Assessing risk systematically following these guidelines requires to a country, and pooling risks internationally. International risk appropriate data, and unless it is already available, consolidating pooling is the only way to tame the so-called covariate risks, i.e. available databases /-sources (including historic weather records those that affect a large section of an economy at the same time, and crop yield statistics) and implementing future data collection like droughts in agriculture or hurricanes on small island nations. mechanisms is an important first step. Even where good data The Caribbean Catastrophe Risk Insurance Facility has proven the exists, it is good to complement it with insights from stakeholder benefits of this international diversification in the Caribbean, and consultations (which are valuable even when data is available). has been considered to provide funds for member governments to Agriculture producers are the obvious stakeholder to consult, but cover their explicit and implicit liabilities towards the agriculture the insurance industry should also be included as an important sector, allowing the government to safely share some of the risk with and knowledgeable partner. Even when they have not provided producers and the value chain. This is an option the Government of agriculture insurance so far, insurance companies are experts in Aruba might want to explore. quantifying risk, bringing relevant research (e.g. from reinsurers) Preliminary Analysis of Agro-Logistics in Aruba | 51 52 | FUNDING LEVEL SCENARIOS The Rapid Assessment lays out a series of recommendations gauging the optimal scale of cost-effective interventions to achieve significant results. The report does not purport to have undertaken an economic or benefit-cost analysis that would provide greater precision, based instead at this stage on experience and the internal coherence between the various elements of the strategy. If, however, fiscal and financial constraints oblige the Government of Aruba to proceed with a less than optimal scale of public investment, we have summarized two additional funding scenarios. The three major blocks of activities correspond to Pillar 1 commercial enterprises, Pillar 2 household and community micro-producers, and Institutional and Policy Support to Pillars 1 and 2. For each of these three sections, the three funding scenarios presented are: (1) zero increase in budgetary resources; (2) an austere increase above the existing level to fund the initiative; and (3) an optimal level of investment having incorporated cost-sharing and cost-saving measures whenever possible. The rationale for proceeding, even if optimal funding levels are not feasible, is driven by the imperative not to squander the opportunity created by the current economic crisis. Aruba is at a critical juncture, reconsidering its near total dependence on food imports and considering strategies to leverage its significant advantages in tourism in a way that diversifies the economic base, creates more service industries and skilled labor openings, while reducing its depletion of foreign exchange reserves. The Rapid Assessment cautions against underfunding the effort so as not to risk achieving outcomes that fail to inspire the participants to continue. Underfunding will defer generating the projected benefits. Fully funding the initiative will accelerate the rate of adoption of agricultural innovation, foment input-supply development, multiply the amount of experimentation, and generate economies of scale to many small-scale producers and a few commercial-scale enterprises. Nonetheless, proceeding even without additional budgetary resources will put in motion the first steps, always with the expectation that additional funding will be forthcoming. The key topics encapsulated in the tables are consistent with the Strategic Guidelines (SG) section. The cross-references to the respective SG number are listed below. SG-1 - Engage the Public Broadly on the Win-Win Opportunities to Increase Local Production. SG-2 - Focus on Enhanced Demand for High-Quality Local Produce. SG-3 - Focus on Enhanced Quality Standards for Local Production. SG-4 - Stimulate Experimentation by Local Producers of All Scales. SG-5 - Involve Children, Youth and Schoolyard Gardening. SG-6 - Identify World-Class Technology and Best Agricultural and Processing Practices. SG-7 - Leverage Available Worldwide Resources for Applied Agronomic Research. SG-8 - Analyze the Results of Both Commercial-Scale and Household- Scale Production. SG-9 – Reduce the Impact off High Logistics Costs in Fruits and Vegetables Sourced Locally. SG-10 – Provide preferential access to local food producers in public food procurement. | 53 Pillar 1: Commercial Food or Agricultural-Based Enterprises (Note: Recommendations Cumulative Left to Right) Launching Launch campaign promoting Identify, contact, and Launch and sustain a campaign Initiative (SG1)[1] local food, agriculture and ascertain level of interest of with recorded demonstration aquaculture production limited prospective local investors to modules, Experimental Farm to disseminating information gauge interest and estimate demonstration and hands-on with existing media outreach demand including food and training, with follow-up by a few budget. beverage processing, vertical TA to galvanize and assist them farming, aquaculture, and non- to establish Business Plans food ag-based investments. (BPs). Promote HORECA Collaborate with ATA[2] Launch social marketing Establish a local certification Local Sourcing to identify HORECA campaign promoting economic and marketplace or (SG2, SG3 & SG9) establishments interested in and cultural advantages of clearinghouse process participating in gradual local increased local production & with emerging producer sourcing collaboration sourcing. Encourage ATA to associations and HORECA. highlight celebrity chefs. Defray some costs of visits, videos, or literature from distinguished chefs. Technology Utilize existing staff resources, Enter into agreements, Build national public-private Generation & including in Santa Rosa, possible MOUs, with centers capabilities to monitor Transfer Exprodesk and IDEA to of excellence to identify and evaluate agricultural (SG4, SG6, SG8) identify examples of promising agricultural innovations and production and processing technologies and share with the corresponding risks. technologies, ex-ante business community. Also Contract university or other (including the assessment of encourage collaboration qualified TA to prioritize those the corresponding risks and between local private sector most applicable to Aruba. risk management options) and participants to organize and during implementation. pool resources. Financing See Rely on self-financing Supplement self-financing Identify prospective below: “Institutional enhanced by existing credit or with pro-active searches for commercial clients, illustrative and Policy Support” equity resources and risk- additional resources. Request production and processing management mechanisms. and evaluate proposals from technologies and sources. Establish systematic dialogue the domestic insurance Assist in development between the domestic industry to develop risk of Business Plans (BPs) insurance industry and transfer mechanisms for from funding mechanism producers to match risk government and the private established. Avail the expertise transfer needs to existing sector. to engage more proactively or readily implementable with the domestic insurance insurance products. industry to develop innovative risk transfer mechanisms for the Government and the private sector, and provide the data that may be required for that. Pillar 1 Innovation Collect information regarding Provide TA or support from Provide adequate TA to design Observatory innovative technologies external service to support an Innovation Observatory (SG4, SG8) suitable for commercial-scale staff, providing continuous that continuously collects enterprises utilizing existing identification of relevant information from leading staff. Coordinate with staff technologies. Assist in the centers of agricultural and working on National Food design and collection of food technology. Coordinate Security Knowledge Database. results. with the team managing Strengthen relationship with the National Food Security the STEM program of the Knowledge Database. Oversee University of Aruba (SISSTEM) the collection and analysis of agricultural and food 54 | processing innovations. Pillar 2: “Backyard”, Rooftop and Community Micro-Producers Launching Campaign promoting Campaign supported with Campaign with recorded Initiative (SG1) local food, agriculture and recorded demonstration demonstration modules, aquaculture production limited modules. Experimental Farm to disseminating information demonstration and hands-on with existing media outreach training, with follow-up by a budget. few extensionists. “Victory Launch a campaign for Provide information or limited Identify technologies (water- Gardens” (SG-1) households, schools, or extension services within efficient, climate-smart, community centers to start the within the envelope high yielding) and Best “Victory Gardens” with their of additional funds made Practice guidelines including own resources plus any available. risk management on-line, available in existing budget. in-print and/or in person. Organize collaboration with input suppliers to procure most suitable materials, and discuss quality standards and warranties. Experimental Continue with existing Santa Expand Experimental Farm Establish Collaborative Farm (SG4 & SG7) Rosa Farm. to cover broader gamut of Agreement with agricultural farming, animal & aquaculture research organization to activities. match design of Experimental Farm program with demands for technology. School & Youth Urge schools and youth Provide key equipment Develop a structured ESY Participation (SG5) programs to encourage and recommendations for program. Provide guidance acquiring know-how and programs to demonstrate and and resources to enrich school recognizing value of local train young people. programs focused on nutrition, production. technology, and results analysis. Financing Rely on self-financing. Existing Collaborate with input Establish basic replicable staff disseminate information suppliers to provide affordable funding modules or mini- of any existing grant, loan or technology modules with BPs based on technology kits. Concentrate funding equity resources and risk- limited grant program for on technology acquisition in management mechanisms. most needy. collaboration with vendors. Assess risks to production (i.e. funding repayment) and identify options to manage it, such as Government Disaster Guarantee Funds, vendor warranties, and insurance. Pillar 2 Innovation Collect information regarding (Same as Pillar 1) Provide TA or (Same as Pillar 1) Provide Observatory ( innovative technologies support from external service adequate TA to design an Innovation Observatory SG4, SG8) suitable for household and to support staff, providing that continuously collects community micro-scale continuous identification of information from leading production utilizing existing relevant technologies. Assist centers of agricultural and staff. Coordinate with staff in the design and collection of food technology. Coordinate working on National Food results. with the team managing Security Knowledge Database. the National Food Security Knowledge Database. Oversee the collection and analysis of agricultural and food processing innovations. | 55 Institutional and Policy Support to Pillar 1 & 2 Launching Continue with existing Increase on-site inspections Establish food safety protocols Initiative (SG1)[1] structures and oversight. within available budget of and inspection scaled to meet limited additional funding, projected demand. Public or including selective sampling contracted private laboratory and laboratory testing. capacity to match needs. Plans (BPs). Plant & Animal Health Disseminate existing available Contract short-term and establish a Cooperative Protection guidelines and on-line technical assistance to assist Agreement with one or resources utilizing existing existing Santa Rosa staff. more partner institutions to Santa Rosa staff. Establish M.O.U. with partner establish Aruba national plant institutions (ABC, Netherlands, & animal health protection CARDI, CGIAR etc) to access system. their guidelines. Contract Technical Assistance Sector Policy Issue Cistern water collection: Work Contract basic TA to identify Contract TA to identify the Resolution[3] with public health officials. options in support of work cistern proto-types and Zoning: (Animal husbandry, with the relevant officials. guidelines and facilitate policy aquaculture, processing, etc.) dialog. Similarly identify Work with relevant Santa critical areas, zoning norms Rosa and housing sector and estimated acceptable officials. capacity for policy dialog. Financing NOTE: At the time of the Supplement self-financing Establish a financing Mechanism Rapid Assessment, there is with pro-active searches mechanism, either new or no certainty of a financing for additional resources by within existing institutions. mechanism being established. TA or qualified additional The specific measures in The zero-budget option is staff. Collaborate with input support of Pillar 1 and Pillar 2 simply to identify existing suppliers to provide affordable are delineated in the respective sources of grants, credit, technology modules with boxes above. Overseeing the equity, and risk-management limited grant program for management implies oversight resources. most needy. from expert TA. National Food Request collection of Contract limited TA to assist Establish a National Food Security Knowledge production data following in the process or defining Security Knowledge Database format developed by existing the data to be collected and with the assistance of Database Santa Rosa and other staff. request that participants specialists. Organize local management implies oversight complete it. data collection team in from expert TA. collaboration with schools, University, and research partners. Perform on-going analysis and disseminate. National Agriculture Collate all readily available Set up a database to house generate historic data not Risk Database information on past crop, relevant future production readily available in order to livestock and fisheries and hazard data, establish allow better predictions of production and on the factors mechanisms to collect such future risks to agriculture that can be expected to have data going forward as the production. De-trend past contributed to their variability, budget allows. Clean available data and assess likely impact such as weather and pests. past data and populate of climate change. database with past data. Establish mechanisms to share pertinent data with interested stakeholders on a timely and relevant basis (e.g. to take mitigation action). Assess possibilities to National Strategy Review existing instruments Lead and coordinate efforts Establish a National Strategy in place for Disaster Risk with all relevant stakeholders for Disaster Risk Financing to for Disaster Risk Financing to determine to assess risks to (present and explicitly address sovereign Financing how suitable they are is for expected future) agriculture risks to natural hazards and expanded future agriculture / livestock / fisheries and health emergencies, including production. pisciculture production. risks to agriculture / livestock / fisheries and pisciculture production. [1] The Strategic Guidelines (SG) presented in the Rapid Assessment are cross-referenced here. [2] We have not conferred with the Aruba Tourism Association (ATA) but are aware of their activities and assume this aligns with them. 56 | [3] These issues highlighted in the Rapid Assessment are illustrative since others may arise. 60 |