Assessing small-holder Participation in Vegetable

value chainstomato, bell pepper, cucumber, broccoli,

lettuce, carrot and potato

Cases from El Salvador & Honduras, in collaboration withFAO, CIAT, CRS, AgropymePresented by Madelon Meijer, Agricultural and Development Economics Division (ESA), at the ‘Governance, Coordination and Distribution among Commodity Value Chains’ workshop, FAO, Rome, April 2006.

Structure of the presentation

• Purpose of the study

• Brief note on the methodology used

• Results of the analysis

• Points of reflection/discussion

Purpose of the study:Confront the barriers of linking small farmers

with the supermarket supply chain

1. Identify bottlenecks

2. Facilitate strategic alliances

General scheme for value chain analysis and intervention plan (from SNV-Peru)

GLOBAL STRATEGIES

(2)

Strengthening of

Producers Organizations

Mechanisms for stakeholder dialogue

Semi-participative

Participative

Participative

CHAIN ANALYSIS

CONSTRUCTION OF AN ACTION PLAN TO IMPROVE

CHAIN GOVERNANCE

IMPLEMENTATION OF THE ACTION PLAN

Analysis

INFLUENCE OFEXTERNAL

FACTOR

ProductionWholesale Retail Consumption

Services

USE OF NATURAL RESOURCES

MARKET AND CONSUMER

DEMAND

HISTORY

SINTHESIS OF ANALYSIS

•Competitiveness

•Comparative advantages

•Bottlenecks

•Sustainability

Define the space of analysis

Territory Product Product flow

ACTORS AND INTERRELATIONS

Evolution of the relation supermarket – producer

Traditional wholesalers supply indivdual stores

Specialized wholesalers

Time

Preferred suppliers

Distribution centers

Private grades & standards

Chang

es in

tech

nolog

y, m

anag

emen

t,

orga

nizat

ion, f

inanc

es a

t the

farm

and

orga

nizat

ional

level

Outsourced and descentralized

Mixed descentralized

Centralized passive

Centralized proactive

Vegetable chain in Honduras

CAFTA

70s: Veg.production

on scale

MINAG: agricultural

policyCompetitive framework

for the horticultural sector

THE ENABLING ENVIRONMENT

Large producers 0.12 %

Small producers 72 %

Medium producers 24.6% %

Ag. hhs: 317.000;

Veg. producers: 15.000

Supermarket n=51; 43% FM

Unorganised farmer Traditional informal trader

Traditional retailer

Traditional wholesaler

Producer organization n=395

Lead farmer n=13

Specialized wholesaler

Imports

Restaurant

Hotel

Hospital

HARVESTER COORDINATION

QUALITY CONTROLPACKAGING

STORAGE & BULKING UP

ROAD TRANSPORT

CEL PHONES

ORGANIZATION

MARKET INFORMATIO

N

BUSINESS SERVICES TECHNOLOGICA

L EXTENSION

LABELS AND STANDARDS

ACOPO 23 members Annual sales US$ 140.000

PHOC 143 members Annual sales US$ 96.000

AGROLEMPA 70 members Annual sales US$ 177.000

COHORSIL 185 members Annual sales US$ 89.000

APRHOFI 110 members Annual sales US$ 184.000

Growth of the ‘lead farmer model’

Year 

Sales per producer (in US$)

Regino Ramirez

Percentage increase from 2002

Olvin Salgado

Percentage increase from 2002

2002 1,510 - 150 -

2003 2,230 48% 699 366%

2004 2,764 83% 1,214 709%

2005 3,280 117% 1,267 745%

Analysis

1. Margins, costs and benefits

2. Gap analysis: requirements vs. what small farmers can currently offer

3. NRM Impact

1. Distribution of final consumer price among supply chain actors in Honduras

Products

VariablesToma

te

Bell pepper

Potato

Broccoli

Lettuce

Carrots

Average

Production costs. 15% 22% 24% 15% 17% 17% 18%

Farm to packing shed transportation costs

4% 12% 1% 4% 6% 1% 5%

Net farmer income for sale to producers organization

20% 0% 24% 14% 18% 12% 14%

Transportation costs to Tegucigalpa or San Pedro Sula

2% 2% 1% 4% 5% 1% 2%

Net producer organization income for sale to specialized wholesaler in Tegucigalpa or San Pedro Sula

4% 3% 3% 1% 2% 5% 3%

Gross profit for specialized wholesaler for sale to supermarket

25% 32% 16% 32% 22% 33% 27%

Gross profit for supermarket 30% 30% 30% 30% 30% 30% 30%

Retail price paid by final consumer

100% 100% 100% 100% 100% 100% 100%

Tomato, wholesale price in TGU y SPS

(Lps/Lb)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Aug 0

6

Aug 1

6

Aug 2

4

Sep-0

3

Sep-1

3

Sep-2

1

Oct-0

1

Oct-1

1

Oct-2

2

Nov-0

2

Nov-1

2

Nov-2

2

Nov-3

0

Dec 1

0

Jan

04

Jan

14

Jan

25

Feb-0

4

Feb-1

4

Feb-2

2

Mar

-04

Mar

-14

Apr 0

1

Apr 1

1

Apr 2

0

Apr 2

9

May

-10

May

-20

May

-30

Jun-

07

Jun-

17

Jun-

27

Jul-0

5

Jul-1

5

Jul-2

5

Date

ZONAL BÉLEN

MEDINA CONCEPCIÓN/DANDY

2004 2005

Período de análisis de precios

en la cadenaFuente: www.agroemprendedor.org, basado en precios SIMPAH

2.48

4.55

7.48

-

2.00

4.00

6.00

8.00

10.00

12.00

Tomato(03 april 2005- 04 june 2005)

1.60Production costs

4.06Producer org. 4.66

Specialized wholesaler

3.89Trader farm gate 3.45

Wholesaler BUY

5.10Wholesaler SELL

7.25Sp. wholesaler-superm.

10.36Supermarket-Consumer

Wholesaler SELL max. average

Wholesaler SELL average

Wholesaler SELL min. average

Lps/Libra

Los precios Mayorista VENTA máximo promedio, promedio y mínimo promedio corresponden a un período de dos añosLos demás valores corresponden a valores promedio de diferentes actores en cada eslabón en diferentes ciudades para el período del 03 de abril al 04 de junio del 2005.

TécnicosComerciales

•La plántula para el transplante es producida principalmente en invernaderos comerciales. Dado el alto costo de la semilla híbrida, esta práctica es cada vez más común.

•Los suelos deben estar bien nivelados para obtener un buen drenaje y reducir la incidencia de enfermedades. Se prefieren los suelos sueltos en época lluviosa.

•Los tomates para el mercado fresco son cultivados en forma arbustiva, con soporte y cosechados en estado verde-maduro (aproximadamente de 80 a 110 días después del transplante).

•En la zona de siguatepeque, se utiliza mayormente el riego por goteo, con rendimiento promedio de 42 toneladas por hectárea (60% de primera calidad y el 40% de segunda o tercera).

•Las principales enfermedades son mancha bacteriana, tizón temprano y tizón tardío (Xanthomonas campestres, Alternaria solani y Phytophthora infestans respectivamente).

•Se debe transportar al mercado de destino clasificados en canastas.

•Los supermercados en Hondura demandan 28.5 Toneladas por semana.

•La presentación de mayor venta es a granel. También se encuentra empacado en bandejas de foam #2 (cinco a seis tomates) y en mallas plásticas (pesos variables). El peso promedio por unidad es de 130 gramos en bandeja y de 232 gramos a granel.

•La única marca Hondureña es “Zamorano”, las demás marcas son importadas de Guatemala (“La Carreta”, “San Lucas Fresh” y “BELUGA’S”).

•LA CARRETA y BELUGA’S (San Lucas Fresh) están certificados por la PIPAA de Guatemala en cuanto a inocuidad de alimentos que garantiza el cumplimiento con buenas prácticas agrícolas (BPA’S) y buenas prácticas de manufactura (BPM).

•Las normas de calidad para comercializar tomate manzano exigen forma y tamaño uniforme, turgente, libre de enfermedades, libre de daño mecánico, con un mínimo de 50% de coloración roja, sin deformaciones, sin sucio.

•El precio por caja de 25 libras es de USD 4.62 para el tomate de primera y de USD 2.56 para el tomate de segunda. La variación de precios se puede apreciar en la gráfica adjunta.

Resumen de aspectos relevantes en la cadena de Tomate de mesa

Required investment - tomatoInvestment Estimated cost

US$ / Mz.

Production Quality seedling 800.00

Micro irrigation 1,815.91

Micro tunnels 437.86

GAP / T.A. 968.04

Post-harvest Assembly point (refrigerated)

5,000.00

Packing 1,010.00

Commercialization Refrigerated transport 28,000.00

Working capital 24,000.00

Organization Management team (costs per year)

37,512.00

3. NRM impact

To meet requirements: Investment needed in

• Management techniques– waterharvesting and drip irrigation– contour planting– soil conservation / IPM / GAP

• Organizational issues– scaled planting– post-harvest management– marketing

Vegetable chain in Honduras

CAFTA

70s: Veg.production

on scale

MINAG: agricultural

policyCompetitive framework

for the horticultural sector

HARVESTER COORDINATION

QUALITY CONTROLPACKAGING

STORAGE & BULKING UP

ROAD TRANSPORT

CEL PHONES

ORGANIZATION

MARKET INFORMATIO

N

BUSINESS SERVICES

THE ENABLING ENVIRONMENT

Large producers 0.12 %

Small producers 72 %

Medium producers 24.6% %

Ag. hhs: 317.000;

Veg. producers: 15.000

Unorganised farmer

Producer organization n=395

Lead farmer n=13

Traditional informal trader

Specialized wholesaler

Traditional retailer

Traditional wholesaler

Supermarket n=51; 43% FM

Restaurant

Hotel

Hospital

Imports

TECHNOLOGICAL EXTENSION

LABELS AND STANDARDS

Conclusions

• Regarding horizontal coordination: Low levels of organization among small holder producers

• Regarding vertical coordination: Lack of coordination among supply

chain actors

• Regarding the enabling environment: Public policies of of step with chain reality

Main recommendations• strengthen the ‘espacios de concertación’.

• develop alternative organizational models

• improve the linkage between supply and demand of service provision, esp. financial services (credit, leasing, compra de facturas and ag. insurance)

• improve public policies, aimed at both making the chain more competitive and with a fair distribution of benefits

Discussion points

• Replicability of PO support

• Experience in alternative organizational / business models

• Implications for policy

• Further empirical work required