ISSN: 1391 - 0531
Sunday December 16, 2007
Vol. 42 - No 29
Financial Times  

Cargills aims to create new entrepreneurs

Agriculture degrees and ‘protein’ baskets for low income consumers

The Cargills Group, constantly striving to create opportunities and innovative ways of helping both small producers and consumers, wants to create a group of young entrepreneurs with agriculture degrees who would take farming seriously. At the same time the group is considering a ‘protein’ basket of goods catering to low income groups and sell through shops in the rural countryside where supermarkets may not be viable.

“How do we reach out – in a retail sense -- to communities where it won’t be viable to open supermarkets? Well, we can create food baskets and sell them through young entrepreneurs,” Cargills Managing Director and CEO Ranjit Page told The Sunday Times FT in an interview. He said these baskets (package of essential foods) would contain the protein needs of a family and is reasonably priced to suit their income levels.

Discussing the future of the country’s youth, Page, who is passionate about helping communities while encouraging that discipline in the organization, believes the way forward is to create ways of recognizing and respecting youth who join the farming profession, often seen as a dirty, muddy and not a dignified sector.

“We may not be able to employ 1000s of agriculture graduates but we can show the way. In most cases they are left behind because other graduates are marketable while the agriculture ones are not,” he said adding that they are working on reversing this trend. “We want to create a Masters Degree in agriculture and/or social entrepreneurship and teach them business and planning,” he said.

Page, whose company has in three years created a revolution in the retail business in a model seen nowhere else in the world and attracted the attention of the World Bank, ADB and the Bill & Melinda Gates Foundation, said one of the biggest concerns is rising food prices and Cargills is gearing to play a role in price stabilization.

He said globally food prices are rising because food is being converted to ethanol (biofuel) in the US, production is falling owing to climate change and more demand from some countries. “As a result prices are rising and coupled with rising fuel prices, this would have a tremendous impact locally,” he said, adding that the global food supply has a new consumer – ethanol producers.
Cargills has business units that understand the markets and plan for the future. “We’re building storage for the future. We know the weather patterns and harvesting period. We’ll ensure it’s the cheapest price that we’ll sell.”

Page concedes that Cargills can make or break markets. “We have the strength and power to control prices and we are very mindful of that. We can earn another million bucks a day (because of large volumes) if we just raise prices by 25 cents. While that is great for shareholders it is more important for us to add long term value to shareholders and ensure our stake holders are also benefited.”

About two months back, Cargills agreed to buy farmer produce from border areas in Weli Oya. Even before any deals were done, the farmers were able to negotiate better prices (when required) from other buyers on the strength of the Cargills promise. “We are change agents – sustainable change agents. We ensure a minimum guaranteed income comes to the farmer,” he said.


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