Conglomerate GraceKennedy has signed a contract valued at J$3.4 million with a small group of farmers to produce an additional 20 acres of hot peppers for supply to its subsidiary GK Foods.

Ten farmers from across the island will be involved. The funds will be used to buy seedlings, fertilisers and chemicals.

"We have a good product but we need to get the cost of producing it down by improving the productivity of the farms,” said Michael Ranglin, chief executive officer of GK Foods Limited, adding that they need to pay attention to the yield per acre.

Ranglin was speaking at the signing of the contracts with the farmers earlier today at GraceKennedy’s head office on Harbour Street, Kingston.

Roger Clarke, Minister of Agriculture and Fisheries endorsed the project and implored the farmers to honour their contracts.

In July 2012 Grace Kennedy commenced producing pepper mash at its Hounslow processing plant with supplies from about 30 farmers in St. Elizabeth, Clarendon, St. Catherine and St. Mary.

During the year the company produced approximately 250,000 pounds of pepper mash, some of which it exported to other countries in the Caribbean.

However, most of the pepper mash produced is used as raw material in GK Foods products, such as sauces.

The new contracts will serve to enhance GK Foods current suppliers of hot pepper.

According to Orville Graham, general manager of Grace Agro Processing Division, between 40 and 60 farmers now each produce on average 35,000 pounds of pepper over an extended period which varies for each farmer.

He said the pepper mash facility was affected following the passage of Hurricane Sandy in October 2012.

The signing of the contracts this afternoon was designed to help increase volumes, said Graham.

Details of the arrangement with the farmers were not disclosed but the amount of peppers to be supplied by each will depend on the capability of each in terms of soil type, irrigation and other factors.

"The quantities have been negotiated with each of the farmer based on their capabilities,” Ranglin said.

He explained that the contracts usually run for a year at a time, but are subject to review for a two year period for those farmers who are dedicated to supplying the company in the long-term.

sabrina.gordon@gleanerjm.com