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A Joint Venture Agriculture Partnership To Use Idle Land

Fijian born Jason Raj now residing in Sydney, is here to help. He has combined corporate social responsibility with commercial business and has started up joint ventures with our local
22 Oct 2016 11:11
A Joint Venture Agriculture Partnership To Use Idle Land

Fijian born Jason Raj now residing in Sydney, is here to help. He has combined corporate social responsibility with commercial business and has started up joint ventures with our local resources owners.

Through Enrich Projects (Fiji) Limited, Mr Raj, has formed joint ventures with land owners to utilise idle land in various parts of the country tapping into the agriculture potential.

His first pilot project is ready to bear fruits in Tausala, Tavua.

Come Monday, for the first time in Tavua, a commercial scale dalo on seven acres of land will be harvested. This is expected to be around 25 tonnes for export.

Dalo plantation in Tavua area on commercial scale is not generally heard of but Mr Raj has made it possible of course with the partnership with the resource owners.

So how does the joint venture work? Enrich Projects has formed a pilot programme where they enter into a joint land lease agreement with the resource owners.

The land is used for plantation or whatever it is determined to be best for.

What is unique then about the programme is that it is Enrich Projects which provides the seeds for planting and pays the resource owners to plant.

Then it pays them to look after the plantation, provides all the necessary equipment needed for plantation and maintaining the farm and then pays them for harvesting.

Mr Raj said this is done to ensure the resource owners have an income stream during this phase before harvest income comes in.

The resource owners then get a substantial share of the gross receipts with shares ranging from a minimum of 20 per cent to 25 per cent depending on the income from gross receipts.

Mr Raj said the joint lease was to protect their own interest as all the initial money being put into the plantation and tests was by the company.

The pilot project in Tavua is the first of many to come. Planting has also already started in Lomaivuna, Naitasiri on 100 acres of land.

And following these two projects, just by word of mouth many other resource owners have started approaching the company for potential joint ventures.

 

How does it work?

The joint venture business model however, is not as simple as it sounds and has in fact been created to empower the resource owners to utilise idle land but to also have a secure future.

What the company aims to achieve is give economic benefits to their joint venture partners and ensure they have an income stream until harvest.

“I say to them if they can go eight months without this harvest income, then they can go another eight months without it as well,” Mr Raj said.

How they do this? Mr Raj said they supplement their harvest income on a weekly basis with other activities – whether it be through fishing through allowing them to acquire a fishing boat or mini van business.

All this is done so that when the harvest income comes in, the money can be put aside for Fiji National Provident Fund and a portion can be put in annuity for their children’s education.

“Commercial and social mentoring is a strong part of our joint venture and we want to empower these people,” Mr Raj emphasised.

“We don’t want to have these people living below the poverty line five years from now which is why we are coaching them on what to do with the money.

“We have taken their state of living now and every year we will be reviewing how their status has improved.

“For instance, the Tavua harvest will easily get them $30,000 to $40,000 in their share of income from the gross receipts.

“All the money we had injected, we are not taking that share. The $30,000 to $40,000 is our responsibility that it gets spent wisely and not just finished in one day.

“So we will get them to invest in education, infrastructure and supplementary income generation.”

 

How the idea developed

Mr Raj, through Enrich Projects, has been for the past 16 years donating educational materials to schools and people in our rural and maritime areas.

However, he believes: “Charity is a good thing but it makes people too dependent. They keep waiting on when is the next charity coming.”

Mr Raj said he came to realise of the need to do just more than charity when his son who is a psychology student, asked him: “What happens to these people next year when you don’t turn up with the charity packs?”

He found this to be a valid question.

And at the same time, his current project manager, Keshwa Nand, had a friend who was struggling to pay his land lease fees and his land was about to go into repossession by the iTaukei Lands Trust Board.

So Mr Raj helped secure the land by paying up the $10,000 owed for the 192 acres of land.

But a question which bothered him was why did the banks not give a loan since it was such a big land in question which could be used as security.

He asked the banks who then said it was not just the security but it was the ability to repay and they didn’t have the capacity to repay as the land was not being used for anything.

Mr Raj paid off the arrears and took a portion of the land but talked about doing something jointly on the land with the land owner.

They had another parcel of land which they had not worked on for 50 years.

 

The current projects

Therefore, on 15 acres of land, they used at least seven acres to plant 22,800 suckers in the ground.

They have then taken their learnings from Tavua to Naitasiri where they have another joint venture on a 100 acre farm in Lomaivuna.

Mr Raj said they have planted 30,000 suckers and another 20,000 will be planted on November 1.

“Our aim is to have the entire area planted within 12 to 18 months,” he said.

The Lomaivuna farm had been completely bought out by the company initially. However, after the success of the Tavua joint venture, they decided to use the same concept there as well.

Mr Raj said they are just about to buy a three-tonne truck for the resource owners in the Lomaivuna joint venture to supplement their income.

 

Government contribution

What has helped in their efforts is Government has been encouraging the resource owners to utilise their land.

Mr Raj said they have the Agriculture Ministry working with them now as well.

“If there is any landowner who is willing to work with us on their land, we send them a MOU with our conditions,” he said.

“After that we ask the agriculture experts to go and advise us what the land is good for in terms of cultivation.”

 

Return on investment

There are no costs to the resource owners except the joint venture for the land and all costs are born by Enrich Projects. So we asked Mr Raj on what is his return on investment.

Mr Raj said they are not doing this at a loss and they do get a reasonable return.

“If we were doing it as a pure commercial venture, it would be three or four times what the return is now,” he said.

But, he said doing it as a commercial venture would have meant the lease was entirely taken away from the resource owners and besides the lease money, they would not get anything much.

“Ours is a business model but it is one which has a strong focus on corporate social responsibility and engages the resource owners at all levels,” Mr Raj said.

 

Future aim

Not being over ambitious, Mr Raj aims to have 2000 to 3000 acres of land in future and have various joint ventures to work with.

At the moment the company doesn’t export directly and goes through exporters.

But Mr Raj hopes in future, they can set up their own export processing facility to be able to do their own processing for exports.

“We don’t want our scale to damage the smaller farmers because that would then defeat our whole purpose,” he emphasised.

 

 

Other upcoming JVs

The Lomaivuna 100 acres targeted is grossly saturated with African Tulip trees and with the help of their joint venture partners, they have cleared five acres.

Following these two, Mr Raj said they have started receiving interest themselves now.

They are now negotiating another 80 acres of land across from the current site in Lomaivuna.

There is another 800 acres of land in Lomainvuna they have started discussions on.

Mr Raj said they have discussions on other areas ongoing – one in Wainibokasi, one in Dravo (Tailevu) and another in Noco (Rewa).



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