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Jamaica, a leading per capita exportcountry known for its commitment to
creativity, innovation and exceptional quality.
The National Export Strategy of Jamaica was developed on the basis of the process, methodology and technical assistance of the International Trade Centre (ITC).
w w w . j a m a i c a t r a d e a n d i n v e s t . o r g / n e s | 1 - 8 8 8 - 4 2 9 - 5 N E S ( 1 - 8 8 8 - 4 2 9 - 5 6 3 7 )
i n d u s t r y s e c t o r s t r a t e g y
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Coffee
IntroductionRationale
The Jamaican brand of coffee, Blue Mountain, remains an iconic brand globally and stands as a symbol of a high-quality product from Jamaica. It is also an example of a protected mark, serving as inspiration and a viable model to several other products and product groups from Jamaica.
In addition to this qualitative rationale for the industry, coffee contributes to the Jamaican economy, grown in a region with full employment, something very few geographical areas are able to boast. In addition to its social contribution there is significant export potential that may be realised from both increased production and export volume, increased value of export by expanding the percentage of value added production locally, as well as development of value-added products.
It is argued that the sector has negatively impacted the natural environment and is likely to continue doing so, however, farm practices have improved with increased utilisation of natural fertilisers and pesticides. Further damage to the environment is not likely to occur with planned increase in output, which will be based on improving yield (and not expansion of planted lands), while inter-cropping and other environmental practices are also to be pursued.
Product Groups and Related Programmes
The strategy covers the complete sector, as defined by its value chain. It is important to note that the strategy is partially derived from a broader strategic plan for the sector’s development that was prepared by the Coffee Industry Board (CIB), and therefore aligned to it. The resulting action plan covers initiatives that complement those of the CIB, and especially those not in its core mandate.
Where Do We Want to Be?The Vision
“To be the global standard for quality coffee, as well as the global benchmark industry.”
The Jamaican Blue Mountain© Coffee is already known as the premium coffee in the world, leaving little aspirational goals for the industry, and a focus on maintaining the current levels of quality. However, the industry has agreed to transition itself as the global benchmark for the coffee-growing and processing industry; particularly based on anecdotal evidence of Jamaica having originated “fair trade” practices in the industry.
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Strategic Objectives
1. To access new market niches in at least three countries.
2. To increase the volume of exports by 20% by
a. Improving ‘clean bean’ yield to 980
kilograms per hectare (from 590)
b. Increasing premium exports to 45% of total (green bean) export (from 23% baseline).
3. Increase in sales to the tourism sector by 15%.
Value Chain
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Where Are We Now? An AssessmentExport Performance and Assessment of Overall Competitiveness
Coffee is one of Jamaica’s top ten export products. Although not a major producer globally, the Jamaican product attracts the highest market value in export markets. Jamaica’s ranking in 2006 was 39.
The value of exports increased during the 2001- 2002 period from 30 million to 33 million USD. Exports fell slightly during the 2002-2003 period to 29 million but then shot up 10 million to 39 million USD in total value. Coffee production, along with other industries, took a devastating blow as a result of the destruction caused by Hurricane Ivan in September of 2004 as well as Hurricanes Dennis and Emily in 2005. This was reflected in the export value of coffee dropping 17 million USD to 22 million USD between 2004 and 2005. Annual growth in value and quantity also reflected the blow to the industry caused by the hurricanes as they both sharply declined to -6% and -7% respectively. The share of total exports as well as world exports declined similarly from 2.49% to 1.24% and from 4% to 1% respectively. The 2005-2006 period, however, saw
the sector recover with an annual growth in value of 44%. The number of exported products which valued more than USD100,000 fluctuated between 2 and 3 between 2001 and 2005 while the number of export markets valued at more than USD100,000 moved from 6 to 9 between 2001 and 2002 and then remained at 9 through 2005.
In 2006, Jamaica exported coffee to the top 9 world importers of coffee. While the USA is the number 1 world importer of coffee, Jamaica’s principal market for coffee was Japan. In 2006, Japan had 80% share in Jamaica’s exports and imported 25 million USD of Jamaican coffee while the USA had 9% share and imported only 2 million USD.
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1 http://www.trademap.net/jamaica/product_clus_4d.htm?typetrade=E&selctry=388&product=09%20 &reporter=%20.
Performance against Critical Success Factors
The industry is benchmarked on the product quality determined by taste and appearance of the bean. Jamaica has the number 1 ranked brand with the highest price internationally, however, the brand is not considered exciting, but old. The quality achieved is based on the combination of (i) soil (ii) growing and reaping practices (iii) elevation. Some of these are unique to Jamaica and contribute to the product quality, however with respect to farming and management practices the ability to maintain standards means that the
industry has performed well against this factor.
A critical success factor for the coffee industry is to maintain its position as the #1 ranked global brand, which allows the industry to attract the highest price. The strategy therefore looks at how to maintain this from a market-driven perspective; identifying threats to the brand rank and how to mitigate these.
The table below reflects the industry’s assessment of its performance against the critical success factors that were identified.
Year Exports in Value(USD mil)
Share of total exports
Share ofWorld Exports
2001 30 2.4917% .4657%
2002 33 2.9478% .5050%
2003 29 2.3921% .3865%
2004 39 2.7864% .4264%
2005 22 1.2466% .1780%
20061
Exports in value
Annual growth (value)‘02-‘06
Annual growth (quantity)
’02-‘06
Annual growth (value)’05-‘06
Annual growth in value of
imports’02-‘06
32 mil USD -6% -7% 44% 21%
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Government Policy and Strategy in Support of the Sector
The coffee industry has no direct policy, but would be included in an agricultural policy. The Coffee Industry Board is
resourced by its own revenues without direct assistance from the GoJ.
The Sector’s Trade Support Network: Capacity, Competency and Coordination
Factor Rating Comment
Freshness High This is achieved in production, but is impacted by the period and conditions between shipper and consumer. The industry maintains freshness in the areas of the value chain in which it is involved and is engaged in monitoring the life of product on shelves, and for its part performs well in this area.
Brand
• Origin High With the Blue Mountain seal, the local industry is the best performer in this area globally.
• Ethical practices (for example fair trade)
Medium Farmer welfare is among the best, however the story is not told, and practices are not documented, and so the performance is medium, with the potential to be high.
• Environ-mental
Low-medium Performance is currently low-medium because not enough options for environmentally sustainable production are being pursued, like shade grown, or organic.
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The main entity with responsibility for the industry is the CIB. The industry is concerned about the capacity of the Board to effectively carry out the roles and functions assigned.
As is the case with other product groups, there is support from the JEA and JTI for export development and promotion. There are no sector-specific functions or programmes.
SWOT Analysis of the Sector
Strengths• Established product brands and very
strong destination reputation.
Weaknesses• Very little collaboration among
members of the sector.
• Few processors and roasters have international certifications.
• The industry has not successfully told their story to drive sales, enhance social equity of the brand.
• The industry standards and requirements do not include social and environmental standards, and so it may be perceived as weak in these areas.
Opportunities• Opportunities exists for increasing
use of current lands (fill gaps) to increase the production volume using currently dedicated lands
Threats• Low domestic consumption limits
sales for business and industry growth.
• Heavy concentration in the Japan market
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The Way Forward
(over 3-5 years)The desired future state of the industry in each strategic perspective is reflected below.
The Development Perspective:Developmental Considerations and Priorities
• The industry contributes to environmental sustainability by expanding environmentally friendly practices and re-introducing new ones, such as intercropping, and organic production.
• By increasing the yield and therefore earnings, improve the welfare of farmers in the growing regions.
• Promote enhanced labour productivity to improve the current low yield/acre.
• Social responsibility is fostered at the industry level with increased number of community programmes.
• Investment is directed to the industry (for privatisation of the government owned entities) that enhances the industry.
The Competitiveness Perspective
Border-In Issues and Priorities
• Yield increased through the provision of technical information and support to growers.
• There is increased investment in product research to facilitate product development and higher value alternatives for waste.
• More aware and sophisticated enterprises with: - roasters no longer lacking certification and technical competence; failure to stay ahead of the curve on customer food safety; lack of funds; lack of management and system depth.
• There is an increase in adaptive research conducted on density and planting systems, nutrition management and Coffee Berry Borer management (through the support of parasitoid programmes) to transform the efficiency of the sector.
Border Issues and Priorities
• Farm and parochial roads are improved to significantly improve access to farms and national production and sales.
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• Alternative pesticides & fertilisers are sourced to reduce the current high costs.
• There is increased availability of credit / micro-lending for growers to finance their production.
• Processors are able to secure more favourable cost and access to working capital,
• There is increased stock of seedling of larger size to facilitate plantation renewal that will substantially increase yields in the medium term.
• High cost of crop insurance (usually needed for hurricane recovery) is reduced.
• Initiatives to reduce praedial larceny are more effective, reducing loss from theft.
Border-Out Issues and Priorities
• The industry is able to access new markets for the premium product.
• The industry collaborates to design and implement a sector programme for increased brand promotion and market penetration that includes (brand building exercises, developing and telling the story of the product
and industry, creative market promotions based on opportunities that exists, such as country promotion of other sectors).
The Client Perspective
Export Client Prioritisation: Support Requirements and Response
As noted earlier, the industry is essentially an export industry, with most of the production sold in export markets. Most of the local sales are also felt to be sales from visitors and locals who purchase for gifts (and therefore also classified as exports). The export clients within the industry therefore comprise:
o The Coffee Industry Board which (for quality control and efficiency purposes) is the sole exporter of green beans,
o Roasters, most of whom export.
Those who do not export, produce an export quality product (which is the industry standard), and are therefore potential exporters. It is therefore proposed that export support requirements be considered for the entire industry. With a focus on the quality and production for exports, the response should be focussed on
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brand development and promotion, market development and penetration, export skills and other trade promotion support.
Implications for Sector Support Services
Business Development & Export Readiness
• Most enterprises in the sector, which operate as small businesses and lack depth in management, are provided competency training and counselling.
• Processors and roasters are typically focussed on the technical aspect of production with weaknesses in marketing, and require support from relevant agencies.
Trade Information
• Data for decision making is required, such as product perception.
Financing
• A working capital programme is needed that will assist with the cost of fertiliser, coffee berry borer prevention programmes, soil tests,
extension support services and pesticides in order to improve productivity.
Quality Management
• Technical and financial support are required to address the lack of QMS (quality management systems) and EMS (environmental management systems) certification which are critical to the future of the industry.
Other Support Services
• Packaging and labelling expertise are required as a support service for the industry.
• In order to maintain the desired standards, the effectiveness of the current intervention to enhance processors’ technical competence will need to assessed.
The Institutional Perspective
Strengthening the Sector’s Strategy Support Network
The CIB is the lead strategy organisation for the industry. Its influence with other national strategy support entities needs to be stronger in order to garner support for strategy.
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For example, based on the experience built in a model for use of a mark, it may be a benchmark for other industries and be supported accordingly, as well as be integrated into national brand-building programmes.
Strategy Coordination and Management:
STRUCTURE
The CIB currently executes the industry’s development programme. The Coffee Exporters’ Association will need to be involved in the coordination, advocacy and monitoring of the strategy however, and engaged in those areas in particular that are outside the mandate of the CIB.
PROCESS (STRATEGY MONITORING)
Since the Board now monitors the industry’s performance, monitoring may reside with the Board, by using similar measures and monitoring mechanisms, at least initially. Support should be provided by the private sector who will have to collaborate with the board for reporting.
The Sector’s Services Delivery
NETWORK
The mandate of the CIB is fairly wide, but understandably so, and as such the Board needs the capacity and resources to be able to deliver all its services effectively. An aspect needing to be strengthened is the Board’s service network and strength of alliances and relationships in order to ensure that the requisite services that are within the scope of other entities are provided to the sector, such as export-related services provided by JTI.
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Vision
The Jamaican Coffee Sector is the global benchmark and standard of quality for the growing and processing of coffee for export.
Development Perspective
The Jamaican Coffee Sector is promoting environmental sustainability by utilising environmentally friendly practices and fostering farmer welfare and increased community development
programmes.
Competitiveness PerspectiveSUPPLY SIDE (BORDER-IN)
Coffee yields increased.
Adaptive research in primary production increased.
Research in product development and higher value waste alternatives
increased.
TRANSACTION COST OF BUSINESS (BORDER)
Farm and parochial roads improved.
Alternative pesticides & fertilisers sourced.
Credit / micro-lending for growers made available.
Stock of seedling increased.
Praedial larceny eliminated.
Crop insurance costs reduced.
DEMAND SIDE (BORDER-OUT)
New markets Accessed.
Sector programme for increased brand promotion
and market penetration developed.
Client PerspectiveTRADE INFORMATION
Data for decision making made
available.
STANDARDS AND QUALITY MANAGEMENT
Quality Management Systems and
Environmental Management
Systems certification applied.
BUSINESS DEVELOPMENT AND EXPORT READINESS
Competency training and counselling
provided.
Marketing competency of processors and
roasters improved.
FINANCE
Affordable and accessible finance
made available.
PACKAGING
Affordable quality export packaging
made available locally.
Institutional Perspective
The Coffee Industry Board of Jamaica (CIB) and the Coffee Exporters Association are the primary vehicles for coordinating policy initiatives and implementing the sector development plan.
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a c t i o n p l a n owner/support
objectives measures targets initiatives entities timeline
THE DEVELOPMENT PERSPECTIVE
The coffee industry to mimises the negatives inpact of growing practices on the environment
Environmental standards developed
Completed in Y1
• Produce and disseminate technical manuals for the promotion of agro Forestry and intercropping, and provide technical services for their implementation.
• Promote organic coffee farming.
• Develop National Industry Standards manual ( for growers, dealers, processors and roasters) expanded to cover:
o technical manual related to production: from farm to cup.
o environmental standards.
o Health and safety standards.
o Social standards, such as employment, wage minimums/ farm gate prices, etc..
• CIB
• Ministry of Agriculture
• JOAM
• NEPA
Y1
Investment is attracted into the sector to enhance competitive-ness and capacity
Percentage of investment opportunities attracting investment
50% • Prepare investment opportunity profiles for NBM & BM coffee that include:
o Cost of production models (mono/intercropped/agro forestry).
o Current partnership opportunities.
• Survey coffee regions and develop an inventory of idle land & abandoned farms that may be put in production and promoted for investment.
• Match prospective growers and land owners to facilitate increased production.
• CIB
• Ministry of Agriculture
• JTI
Y1 – Y3
Sector’s economic contribution
Production outputYield
980 kgper
hectare
• Promote best practices among growers in order to foster improvement in labour productivity through the best farmer award.
• Increase the provision of technical information and support to growers that is required to increase production yield.
• Ministry of Agriculture
• CIB
Y1 – Y3
THE COMPETITIVENESS PERSPECTIVE
BORDER –IN
Sector Diversification
The coffee sector increases domestic value addition
Improved feed conversion (from 2 to 1.5)
1.5 • Obtain better quality feed.
• Develop business plan for Jamaica AquaFoods Limited.
• Cluster
• Ministry of Agri-culture
Y1
To increase recovery from 30%
Number of value added product developed for commercialisa-tion
2 • Conduct product research to identify:o value added products that are feasible for
introduction into operations.
o higher value alternatives for waste (such as briquettes).
• Promote and facilitate commercialising feasible products.
• SRC
• CEA
• CIB
• Ministry of Energy
Y2
16
a c t i o n p l a n owner/support
objectives measures targets initiatives entities timeline
Capacity development
There is increased yield (output) resulting from improved practices and efficiencies
Production outputYield
980 kgper
hectare
• Increase adaptive research conducted on the density and planting systems, nutrition management and Coffee Berry Borer management, to transform the efficiency of the sector.
• Increase the stock and size of seedlings.
• Ministry of
Agriculture
• CIB
Y1-3
The Jamaican Coffee Industry is recognised as the global industry standard
TBD TBD • See initiative to Develop Industry Standards Manual for Objective 1
• CIB
• Ministry of Agriculture
• JOAM
• NEPA
• Ministry of Labour
Y1-2
BORDER
Cost of Doing Business
There is improved infrastructure and business environment for growers and processors to enhance revenue
Percentage of farm roads targeted that are improved
50% • Advocate GoJ to improve farm and parochial roads.
• Facilitate and promote alliance to source and purchase alternative pesticides & fertilisers to reduce the current high costs.
• CIB
• CEA
• Advocate for increased availability of credit / micro-lending for growers to finance their production.
• CIB
• CEA
Programme redesigned
• Engage stakeholders in review and design of crop insurance programme.
• CIB
• CEA
Y2
Crime
Percentage reduction in loss due to theft
50% CROSS-CUTTING INDUSTRY INITIATIVES ARE RELEVANT
• Ministry of
Agriculture
• Ministry of National
Security
• JCF
Y1-3
BORDER-OUT
The sector benefits from an improved branding and marketing programme
Percentage increase in export sales
20% • Design and implement a programme for increased brand promotion and market penetration that includes (brand building exercises, developing and telling the story of the product and industry, creative market promotions based on opportunities that exists, such as country promotion of other sectors).
• CIB (R)
• JEA (R)
• JTI (R)
• CEA (A)
Y1
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owner/support
objectives measures targets initiatives entities timeline
a c t i o n p l a n
4 p r i o r i t y i n d u s t r y s t r a t e g i e s
Sector Promotion
International As above • Generate and communicate positive messages about the brand.
• Identify and recruit branding and marketing expertise for the sector’s programme.
• Determine/validate market positioning & promotion strategy.
• Maintain and improve our relationship with Japanese Importers.
• CIB
• JEA
• JTI
• CEA
Y1-2
Domestic – Tourism
Percentage increase in tourism sales
15% • Design and execute a promotional campaign targeting buyers at all ports (air & sea) that includes partnering with retailers on supporting promotional activities.
• Develop a promotional campaign to be integrated into Restaurant Week.
• Create linkage with HEART Runaway Bay to train hospitality staff in coffee preparation & terminology.
• Initiate training programme in hotel sector.
• CIB• JEA• JTI• CEA
Y1
THE CLIENT PERSPECTIVE
Business Development and Export Competency
CROSS-CUTTING INDUSTRY INITIATIVES ARE RELEVANT
Increased participation in exports in the sector, and improved export performance of enterprises
Percentage of roasters and processors participating
80% • Design and deliver and export awareness and readiness programme for the sector.
• Inform the enterprises of export agencies and their services.
• JTI
• JEA
Quality Management
The Jamaican Coffee Industry is recognised as the global industry standard
Standards and support programmes developed
Completed in Y1
• Execute a certified seed program for private coffee nurseries.
• Collaborate with relevant entity(s) and lobby for funds for the certification of Coffee Extension Agent.
• Provide technical and financial support to firms to address the lack of QMS and EMS certification which are critical to the future of the industry.
• CIB• Ministry
of Agriculture• JOAM• NEPA• Ministryof Labour
Y1
Trade Information
• Develop and disseminate market reports for the sector to provide firms with data for decision-making.
• JTI
• JEA
Other Trade Support Services
• Identify packaging and labelling expertise as a support service for the industry.
• JTI
• JEA
THE INSTITUTIONAL PERSPECTIVE
• Provide support for cluster development to facilitate collaboration among enterprises within the sector.
CIB diversi-fies and expands its revenue streams
• Strengthen agency network and relationships.• Lobby to modify the Cess order to include
Imports of coffee.
CIB
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