Transcript High Value Fruits And Vegetables: A perspective from Asia

High Value Fruits And
Vegetables:
A perspective from Asia
By
Leslie Cheong
Director, Food Supply & Technology Department
Agri-Food & Veterinary Authority of Singapore
Challenge Program: High Value Crops – Fruits and Vegetables
Workshop, Nairobi, Kenya, 7 – 8 June 2007
Coverage
•
•
•
•
•
•
Background
High Value Crops
Strategic Focus: Asian Perspectives
Information and Knowledge
Access to Capital
Conclusion
Background
Global Fruit and Vegetable
Trade: Patterns1 (1/3)
• Share of world agricultural trade:
– 1961: 10.6% or US$3.4 bil
– 2001: 16.9% or US$70 bil
• Variety
– 1961: bananas, apples, oranges, tomatoes (30% of
total fruit and vegetable trade)
– End 1990s: above less than 20%, with increasing
share by fresh grapes, fresh vegetables, frozen
potatoes, tree nuts, and other fruit and vegetable
products
1
Sophia Wu Huang, 2004. Global Trade Patterns in Fruits and Vegetables. (In) Global Trade Patterns
in Fruits and Vegetables, Economic Research Service/USDA. Chapter 1.
http://www.ers.usda.gov/publications/wrs0406/wrs0406b.pdf
Background
Global Fruit and Vegetable
Trade: Patterns1 (2/3)
• Most trade in following regions:
– European Union (EU)
– North American Free Trade Agreement (NAFTA)
– Asia
• Typical of these trade regions:
– Has high-income consumer countries
– With nearby supplier countries
• Within EU, Britain, France and Germany are main importers,
Spain largest exporter and Netherlands through whose
seaports many exports are shipped
• Within NAFTA, USA main importer, Mexico is main exporter
• Within Asia, Japan is largest importer, China largest exporter
Background
Global Fruit and Vegetable
1
Trade: Patterns (3/3)
• Globalisation of markets
• Developed countries will continue to dominate global
trade
• New varieties will find their way into the diets of the
relatively affluent everywhere with increasing per capita
income growth and freer trade
• Asia
– China is fast becoming a larger importer and exporter as it
improves on the quality of its produce
– Japan’s overall consumption unlikely to increase and may
decrease with population decline beginning before 2010; trade in
fresh fruits, especially temperate fruits, most likely to grow
Further reference: M V Stichele, S van der Wal & J Oldenziel, 2006. Who reaps the fruit?
Critical Issues in the Fresh Fruit and Vegetable Chain (update). SOMO, Amsterdam. 192 pp.
http://www.somo.nl/html/paginas/pdf/Who_reaps_the_fruit_june_2006_NL.pdf
High Value Crops
High Value Crop: Characteristics2 (1/3)
• High value products usually meet the
needs of motivated buyers who are willing
to pay a premium if their expectations
about specifications and quality are met.
• The number of such buyers is limited, and
the danger of over-supplying such a
market is always a threat.
2
International Institute of Tropical Agriculture, 2005. Our story: from field to fork. IITA
Annual Report 2005; http://www.iita.org/cms/articlefiles/279-our_story.pdf]
High Value Crops
High Value Crop: Attributes (2/3)
ICTA3
Taste
Appearance
Safety
Japan4
Remarks
(4) Taste
(3) Visual perfection
(1) Freshness
(2) Quality
Stringent safety standards
Nutrition
Ease of preparation
Packaging & Shelf-life
Consistency in supply
(7) Stability of supply
(5) Lower prices
(6) Tariffs
Tariffs: vary by country of
origin
3
International Center for Tropical Agriculture, 2005. Getting a Handle on High-value Agriculture. CIAT
In Focus, 2004 – 2005 Annual Report of International Center for Tropical Agriculture (CIAT);
http://www.ciat.cgiar.org/newsroom/pdf/ciat_in_focus_2004_2005_text_only.pdf
John H Dyck and Kenzo Ito, 2005. Japan’s Fruit and Vegetable Market. (In) Global Trade Patterns in
Fruits and Vegetables, Economic Research Service/USDA. Chapter 7.
http://www.ers.usda.gov/publications/wrs0406/wrs0406h.pdf
4
High Value Crops
High Value Crop: Strategic Focus5
• Commercial production and sales by small
farmers and retailers will depend on their
ability to:
– focus on high value, specialty crops targeted
at specific niche markets
– differentiate their products
– optimise product mix
– establish early brand loyalty
5
Ramu Govindasamy and Suzanne Thornsbury, 2006. Theme Overview: Fresh Produce
Marketing: Critical Trends and Issues. Choices, 4th Qtr 2006 21(4),
http://www.choicesmagazine.org/2006-4/produce/2006-4-05.htm
Asian Perspective
An Asian Perspective (1/5)
Amaranth
• Specialty Crops & Specific Niche Markets
– Proposed 3-year project on Indigenous Vegetables (IV)
• Title: Enhancing utilization and conservation of indigenous
vegetables by rural farmers in ASEAN countries
–
–
–
–
–
Training of farmer facilitators and farmers in growing IV efficiently
Conservation programme by farmers on IV
Illustrated guide to IV in ASEAN
Facilitating farmers in marketing the vegetables
Promoting private sector involvement to develop new varieties of
indigenous vegetables
• Lead country: Brunei Darussalam under AARNET [ASEANAsian Vegetable Research & Development Center (AVRDC)
Regional Network on Vegetable Research]
• Status: seeking funding support (US$454,000)
– Other IV news: http://203.64.245.173/world_iv/News/news.asp
Asian Perspective
An Asian Perspective (2/5)
Branded Packed
• Differentiate their products
– Product:
• Good Agricultural Practice
• Join the organic movement
“People have
become more
concerned about
what they eat –
perhaps because of
the recent food
scares.”
– Chris Conway, Executive
Assistant Manager, Grnd Hyatt
Hotel’s mezza9 restaurant.
Asian Perspective
An Asian Perspective (3/5)
Reefer truck
• Differentiate their products
– Service: matching quality requirements of
major retailers, e.g., cold-chain integrity
• Title: Study Meeting on Cold-Chain Management of
Vegetables for members of Asian Productivity
Organisation (APO)
– Country papers from participants
– Key-note addresses by experts
• Organisers: Singapore (AVA and SPRING) and
Asian Productivity Organisation
• Status: scheduled on 21 – 24 August 2007
Asian Perspective
An Asian Perspective (4/5)
• Optimise product mix
– Transportation
Chiller hold in vessel
• High cost of logistics: defraying return
journey
• Lack of logistics network: dedicated
freighting
– Information and Knowledge
• Empowerment
– Of the Individual
– Of the Village or Community
– Of the Economy
Info & Knowledge
Empowering the Poor
• Village Phone (VP) concept6 & 7(Grameen Telecom,
GTC, of Bangladesh):
VP in action
– Concept: A person may not own a telephone but he/she should
have access to a telephone within a ten minute walk
– Operation: GTC provides Global System Mobile (GSM) 900
cellular mobile phones to villagers
– Grameen Bank member (woman) obtains ownership of phone
under lease-financing programme of Bank; serves as a VP
operator responsible for extending services to the villagers for both
incoming and outgoing calls; may also have phone numbers of
local MPs, police stations, even the PMO, to communicate with
– Average use of village phones: 1,600 minutes/month, with 600
minutes outgoing calls
– Outcome: One VP covers 2,500 people of that village; by 2004,
40,000 VP operators provide telephone access to 100 mil rural
people; target: 100,000 VP operators (covering 85% of
Bangladesh’s villagers)
6
Durga P. Paudyal, 2006. From the Peasant Charter to the ICARRD: An Overview of the Current Trends and
Emerging Issues in Rural Development in the Asia-Pacific Region. Asia-Pacific Journal of Rural
Development, Vol XVI No.1, 42pp
7
http://www.telecommons.com/villagephone/section1.html
Info & Knowledge
Empowering the Village
E-choupal in action
• Village meeting place8&9 [Indian Tobacco Company (ITC)] or
e-choupal
– Concept: confers power of expert knowledge on even the smallest
individual farmer, thereby enhancing competitiveness in the global
market
– Operation: ITC establishes Internet Kiosk in cluster of villages
– Selling centre for seeds, fertiliser, crop insurance, etc.,
– Managed by a trained farmer
– E-choupal is a web-supported initiative offering farmers’ information,
customised knowledge, products and services to enhance farm
productivity
– Outcome: Already benefiting over 3.5 million farmers; target: 10
million farmers in 100,000 villages to be empowered over next
decade
8
B Sudhakar Rao, 2006. Rural Infrastructure: A Critical Issue for Farm Productivity in Asia.
Asia-Pacific Journal of Rural Development, Vol XVI No.1, 61-77
http://www.itcportal.com/ruraldevp_philosophy/echoupal.htm
9
Info & Knowledge
Awarding elite
businessmen
Empowering the Economy
• Township and Village Enterprises (TVE)10&11 in China:
– Concept: Integrated rural development by combining agricultural production
with development of rural and small industries in public-private partnership
– Operation: Both husband and wife who worked on their farm also worked in the
factory in the township or village enterprise in their area; people who worked in
the factory came home in the evening to till their plots
– During harvest time, the factories would be closed down and the workers would
be permitted to spend all their time in harvesting their land; Earlier they would
be given time for preparation of land for sowing
– Outcome: TVEs contributed to the success of transitioning China from a
controlled economy to a market-based economy. It encouraged modern day
entrepreneurs in China. Line of public and private business blurred. However
TVEs are breaking down because of high rate of out-migration from rural areas
into urban sector.
Rehman Sobhan, 2006. Comments on “From the Peasant Charter to the ICARRD: An Overview of the
Current Trends and Emerging Issues in Rural Development in the Asia-Pacific Region”. Asia-Pacific Journal of
Rural Development, Vol XVI No.1:43-54]
11http://www.umich.edu/~ipolicy/china/5)%20Chinese%20Township%20and%20Village%20Enterprises,%20A%2
0Model%20for%20Oth.pdf
10
An Asian Perspective (5/5)
Asian Perspective
•Establish early brand loyalty: Maple Leaf case study
Problem: Shrinking population, getting older,
town left behind by country’s post-war economic
Adversity:
Town’s orange trees, once main
boom
source of income, were damaged by storms and
Human
spirit:
matterinhow
oldFarmers
you are,forced
you
unusually
cold“No
weather
1981.
need
jobother
to feelwork.
a reason for living.”
to looka for
New Opportunity: Gathering leaves to high-end
restaurants to garnish traditional Japanese
Business: Some 200 residents (mostly women in
dishes began with shipments of simple wild
their 80s or older) have contracts with Irodori Co.
leaves.
Information
Empowerment:
They (the
Inc., a joint public-private
venture
that residents)
brokers
receive
faxed
orders and get daily information on
sale of the
leaves.
Improvements:
Nowadays
the line-up has
the business through
the Internet.
expanded to value-added oriducts such as small
Earnings:
Thefigures,
residents
have managed
to turn
origami-style
including
cranes, fans,
the
business
into an
enterprise
earning more
boats
and arrows
made
of iris leaves.
Viability:
“If you
watchaTV
all day long, you get old. I
than S$3.13
million
year.
can get over the slightest cold easily as I work hard. In
Lesson
Public-Private
partnerships
work, and
fact, I’mlearnt:
too busy
to see a doctor.”
– Hariki, great-grandmother
succeeds well when entrepreneurial spirit is strong.
One more Focus
Another Strategic Focus: Access to Capital
• Raising private capital for starting and expanding a
business is an essential aspect for any business
environment
• Government loan
– often given to individual
– sometimes perceived by the individual as an entitlement
• Comercial loan
– TVEs: Ability to procure production inputs, such as capital, is
another advantage instrumental for TVE’s success in China11
• local Government involvement in TVEs created favourable
environment for banks to lend to the TVEs since TVEs have
community Government back-up
– Kenya’s Equity Bank and Mexico’s Banco Azteca12
• Equity Bank: low-cost bank accounts
• Banco Azteca: Mexicans without formal jobs
12
Eric Onstad, 2007. Big corporations try to tap a market they have ignored (By)
C.K.Prahalad. (In) Khaleej Times, 6 June 2007.
Conclusion
• Tremendous potential in business of high-value fruits
and vegetables
• Characteristics of high-value produce
• Asian perspective on Strategic Focus
• Information and Knowledge Empowerment
• Maple Leaf case study
• Re-engineering of Township & Village Enterprises?
• Getting big corporations to tap market of the 4 billion
poor (USD 5 trillion annual purchasing power), e.g.,
bank loans
• Challenge to developing and implementing a
programme on high value fruits and vegetables is in
keeping a multi-disciplinary approach from farm to plate
Thank You