Nuffield Blog #3 Singapore: Leaving Nuffin’ to chance

Our first day in Singapore involved an early rise at 5am for a walk – I was keen to see the city awaken and come to life. The only problem with this noble intention was to fail to realise sunrise wasn’t until 6.30am, so I navigated the deserted streets with my trusty iPhone torch! Intrigued to watch the street sweepers spray recycled sewerage water on main roads (completely clean, innovative way to recycle water..)

Humid and a warm 36 degrees at 6am, it was like a walking in a sauna. Beautifully manicured gardens, clean swept streets, soulless high street labels blinking ‘success’ from their windows. A quick stop at a corner shop revealed sweet corn, shrink wrapped into bite size chunks. Sweaty corn, wrapped in plastic oozing a yellow colour too perfect to be natural. It seemed to me a perfect metaphor for Singapore – beautiful and well packaged, but sweaty, imported and devoid of nature.

 

IMG_1169Well known for strict regulation through tightly controlled government (ie, we read about commonplace practices of rehousing the homeless or disability, being quietly shipped off to an institution for ‘rehabilitation’), from first impressions.. Singapore appears to marks its success through visual measurements – cutting edge architecture, immaculate personal grooming and the skill of polite queuing or walking whilst watching video games on a smart phone.

IMG_1828Singapore is a tiny island – totally reliant on imported product to feed, cloth and house its people –  has made a fortune in the margin business. A shipping port where large ships from the West would arrive, be unloaded and their cargo repacked onto smaller ships to enable their safe passage into the small or shallow ports of Asia.

The future of Singapore’s shipping container trade is bearish, with China deepening its ports to allow direct trade from port to port and skip the Singapore ‘decanting’.

IMG_1079Our days in Singapore were filled with briefings from Nuffield Australia and informative presentations with NCI Brokers Asia PTE LTD, ANZ bank and Syngenta.

Stuart Anderson, CEO of NCI Brokers Asia PTE LTD (NCIB), addressed the 30 Nuffield farmers and agribusiness professionals from 9 countries about the practical issues for producers looking to access export markets directly.

Whilst most Australian banks offer a trade credit facility to Australian farmers looking to directly export product overseas, Stuart has more than 20 years of experience in the insurance/trade credit game, mostly in Asian markets.

IMG_1041The cultural differences in how a “western/European” vendor supplies product and their expectations about payment terms compared to an “eastern/Asian” paradigm appear to be an implied trade barrier. For example, if our small family farm were to negotiate a supply contract for Adzuki beans into China or India, whilst a contract might specify the quality specifications, and terms of payment – there could be markedly different interpretations from the buyers perspective. Agreed payment terms of 90 days upon receipt of product on the dock in Singapore or Shanghai, could stretch out to 18 months… This is where Stuart steps in.

Of particular interest to our Ag business was Stuart’s service of undertaking due diligence on behalf of a proposed supply contract. Eg. Where the Australian farmer wishes to supply chilled beef to a province in China, Stuart can access a significant database for a small price of $30/search, and ascertain if there have been historical issues from other vendors having product returned/ payment being late or if prosecutions were required to enforce contract performance.

IMG_1043ANZ Bank‘s presentation was largely commercial in confidence so I can’t say too much. It was fascinating to observe the difficult dance of an Australian bank – a business seeking to make profits – navigating their corporate social responsibility in the space of emerging markets. With 5 floors of prime office space in Singapore, if you were an Australian farmer banking with ANZ, the resources available to you to gain insight into the Asian market are impressive.

IMG_1049Syngenta was also a presentation exploring commercial in confidence topics, but the array of ‘corporate speak’ was a great stand alone lesson for any Australian farmer looking to sharpen and update their dictionary of management terms!

On a serious note, and already a hot topic in Australia, is the intellectual property of farm data, such as yield mapping, input rates, spray and harvest records. As big data increases its role in the farming sector, the value of the knowledge and data of an individual farmer or their business (I believe) becomes a tangible asset. Should this knowledge be passed to a corporate giant for product development for free? Would Syngenta give away the recipe to Gramoxone? The process of “equal value exchange” is a difficult conversation, and certainly one for our industry bodies to address before the value of the farmer’s IP is gone.

IMG_1046For me, our visit to Singapore was a tall of two cities: ex-pats and highly skilled professionals expertly navigating trade and finance, and the story of Hannah, a Filipino nanny who I sat next to on our flight from Singapore to The Phillipines. Hannah had been a nanny for an ex-pat couple for nearly 4 years, having looked after their baby from 6 months of age. Hannah has a husband and 12 year old son in The Phillipines and had returned home once in 4 years to see her family. She was paid $USD1,000/year (in addition to her board etc). She was devastated to leave the boy she had raised as his nanny. She was worried she would not recognise her own 12 year old son at home. We spent the 4 hour flight talking about how lucky the ex-pat couple was to have her assistance for 4 years whilst she sobbed and mourned the loss of the little boy she would never see again.

In my next blog we get muddy and plant rice in The Phillipines: Blog 4: The Phillipines – Will we have Nuff’ food?

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