Maafahi — navigating the challenges
In our second half of the story on Maafahi, the focus shifts to sectoral challenges and how agriculture can benefit through genuine engagement on both policy and private sector efforts.
Maafahi
In the concluding half of our first two part 'Business & People' feature segment, we continue our discussion with Salah Shihab; Director, Seagull Group on the key challenges within the sector — focusing on potential pitfalls, opportunities and policy initiatives.
If you haven't already done so we recommend reading the first part; "Maafahi — a passion project come to life" before you continue.
Having been in service for close to three decades now, Maafahi, since the first few steps taken at its inception in the early 1990s, has been at the forefront in maintaining the viability of local agricultural products within the market while promoting, and innovating, within the sector.
The Maldives Financial Review: What would be your advise, perhaps in terms of key insights through your own experience, to government and potential new comers?
Salah Shihab: There is no real economic assurance policy that is viable for this type of thing that we can take. And the financing is always difficult.
People listen very enthusiastically, but at the end of the day, it’s our own funds, that have been continuously ploughed, since the beginning. There’s not one loan from an outside party, rather its funds from our directors’ earned dividends. The Maafahi project is entirely run from the profits made, basically from the resort sector of the Seagull group.
There are many challenges. There are some good government policies, and there are some things that can, from a growers’ point of view, be done better. The good thing; the government over time, has recognised that this sector definitely needs a lot of support. And in that support, we have had many import duty concessions. So all the fertilisers, seeds, and farm machinery we bring are duty exempted.
And it is quite easy, and protocols are simple — and it has been like that for last 10 years.
I personally believe that these islands are extremely valuable state assets. Land is the most scare asset that the country has.
I think the policy makers need to think beyond having an island just given to someone. We need a little bit more encouragement, in order to successfully do what genuine agriculture and fisheries side investors want to do. And in that, a 20 year lease is definitely far too short, especially considering the life of a plant like coconut.
I believe there should be a way in which, the genuine ventures within the sector to be identified and encouraged with longer leases, where we can then invest on major cost items like building a good harbour, where fishing boats can come and they can be serviced. At the moment it is beyond our budget.
I recently learned that the island in front of Maafahi has been given a budget of MVR77 million for a harbour, a very generous offer for an island with around 1,000 people.
I don’t see why that kind of money cannot be made available as [sector concessional] loans to industrial projects like ours, where we also can develop the infrastructure, and find ways to even repaying that, through that investment. That way we can develop the fisheries sector. But development of a harbour, as everyone realises, is a hugely expensive investment. It's difficult to invest MVR40 million, when you are unsure how long your lease will be.
So this type of lease guarantee periods, and assurance that you’re getting the islands for long term is needed — provided that you’re doing the right thing on those islands which I agree should be very closely monitored.
Various ways of encouraging the genuine people to get on with what they are doing, is something we would like to see more support on.
I'm very happy to say, I was able to meet with the new fisheries minister, shortly after he took office.
[The Minister of Fisheries, Marine Resources and Agriculture] visited Maafahi [recently] — the first time an agriculture minister has been to Maafahi in a long time — with a very high level delegation of IFAD [The International Fund for Agricultural Development]. I’m looking forward to seeing him again, and getting his comments as to how best we might be able to refocus on what we are trying to accomplish.
The next big challenge that we never anticipated is the environment today. Everybody is having to allocate their budget to address the environmental challenges, and Maafahi, a fairly large island, has its own serious environmental challenges. Not only to the crops, but also to the shoreline. I would say our challenges are some uncertainties about the lease, the newly evolving climate impact on the island, and the uncertainty of growing field items, unless we put in a lot of investment for field protection.
Even now we have lots of netting, lots of wind protection, but not enough to stand up to winds of 95km — even in places like New York will be regarded as a serious storms. Then on the top of that, we have the issue of bats, and rats.
Where these days we can't use certain types of very effective rat killing poison.I wouldn’t be wrong if I say that 30% of our crops are lost to rats, bats and coconut ruku madi. Very challenging, but we continue, because it is a very exciting project.
You mentioned food security.
It is very effective being on stand by. During COVID, our travel business had zero income for three to four months. While we have a staff of over a 100.
Maafahi, didn’t miss a week [during the COVID pandemic]; every week we were bringing the produce, and all the items we were growing — fortunately the weather was a lot better last year than this year and we managed to keep the production at a very steady level.
In fact, we were able to send the [Seagull] café staff — of course on a volunteer basis — to Maafahi to do agriculture work. This helped us remain open, and provide very valuable local produce to the consumers, when hardly anything was coming from air, especially at the beginning.
I think more islands, and more focus, can be a major contributor to food security. If there is anything anyone can learn from Maafahi, I think the lesson is, yes we can do agriculture in the Maldives.
It is a lot more expensive than most countries. Our soil is very poor, our water table is very limited, and all those things have to be factored in — but, it can be done. It means the produce will be more expensive, and of course uncertainties are greater. But I wouldn’t give up on Maafahi as long as we have the island.
MFR: Are you able to cover the operational costs?
Salah Shihab: We are not.
But as I always keep saying, if we can do fishing on a larger scale, then we can. And to do fish on a larger scale, we need to develop a harbour that can bring in larger fishing boats. Hanimaadhoo Airport needs to become an international airport as the government is hoping in the near future.
If a few things happen, we as investors will be encouraged even to tap commercial loans to [invest in a harbour and go into fisheries]. But at the moment, it doesn’t [make business sense]. We don’t know when exactly Hanimaadhoo will be able to send fish overseas directly. We are not sure what will happen if we invest on a harbour.
Multiple infrastructure investment need to be tied in for some economic activities to take place.
Depending on where your agriculture island is, you can become very useful to the resorts that are not far from you. I think there is enough resorts in the country, to be able to consume at least ten times of what we are producing.
The challenge is, we can’t transport if we produce more. There is physical space to produce more, we have the know how to produce more. But the transportation is the challenge.
MFR: Can explain your approach to fertilisers and pesticides?
Salah Shihab: It is very important for the grower, to produce safe products. Seagull group is committed to safe food. I will not hesitate to, every day, give seagull produce to my children and grandchildren. To do that, we have to be very strict with the fertilisers and the pesticides we use. Of course the government has the regulations.
An uncontrolled field leader, can abuse the quantity of fertiliser to get a bonus on the production. We allocate the fertiliser based on the expert advise of our consultant from Sri Lanka for coconut, and for all other products from the consultant in Australia. It is strictly supplied to the field leaders according to the number of plants they have. We have a supervisor, who is supervising the distribution of fertiliser, on top of the store keeper.
Recently I was in Maafahi for two months during the lockdown period, and I personally trained all our team leaders, on how to measure the correct weight of fertilisers.
I think the Maldivian consumer has a lot of trust in the Seagull products. We value that and we would not want to lose that. Regardless of how low our productivity becomes.
I mentioned the damage caused to the bananas from the storm. We don’t want to double dose the banana plantation to get higher levels of output quickly. That discipline is one we have to maintain. We give 100 percent assurance, from the management side we do everything to control that.
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This concludes out two-part feature on Maafahi, we hope the extended story was both insightful and engaging.
