Transcript Document
Creating a reliable supply chain Mykola Hrytsenko 17 March 2011, Kyiv The formation of civilized transparent channels of promotion of agricultural products from producer to final consumer on advantageous conditions for all participants remains one of the most urgent problems in Ukraine. Today, non-transparent schemes of sale of agricultural products and lack of wholesale structures create preconditions for large price fluctuations in the agricultural market and predetermine additional costs for producers, processors and customers. Problem Small-scale production; Lack of primary marketing organisations; Lack of logistics facilities Problems of agricultural markets RETAIL BUYERS RETAIL MARKETS SHOPS NATURAL TRADE PROCESSING ENTERPRISES PUBLIC CATERING FREE LANCE MEDIATOR SMALL PEASANT FARMS 18.07.2015 CLOSED INSTITUTIONS PRIVATE (FAMILY) FARMS AGRICULTURAL ENTERPRISES Segmentation of marketing channels for individual sale; vegetable export; and 3,2 %melon produce 2% from field; 61,5 % remain on fields; 29,5 % Wholesale markets; 3,8% from field remain on fields export wholesale markets individual sale Corporate relationships with agricultural cooperation partners Marketing cooperatives Agricultural enterprises Rayon cooperative market Private (family) farms and PPH Ag produce purchasing centres, marketing groups Agricultural Wholesale Market Producers Consumers Retail trading Special establishments and institutions Catering establishments Other consumer groups Private commercial business Processing enterprises Loss of produce in supply chain Ukraine the Netherlands Producers Sale 30 - 35 % 10 % 15 – 20 % 5% Consumers Total loss 25 – 30 % ~ 65 % 10 – 15 % ~ 35 % Agro-logistics: Current status in Ukraine Positive: •Quality and quantity of productive land •Proximity to the European, CIS and Central Asian markets •Relatively cheap and available labour force •Growth of chain leaders (Danone, Chumak, Sandora et al.) •Potential for significant yield increase •Various possibilities to increase off-season prices Negative: •Inadequate attention to markets and value-added •Lack of post-harvest processing technology •Farm structure •Research and advisory service •Lack of funds •Communications / networks and information •Basic infrastructure •Permissions •Public-private partnership •Bureaucracy /corruption / law •International image of Ukraine Agro-logistics: Opportunities and perspectives in Ukraine Building supply chains: attention focusing; improving capabilities; knowledge about changes and trends in supply chains and markets; use of chain leaders. Improving chain competitiveness: continuous improvement of chains at every level; cooperation; goal setting; use of appropriate technology The development of international chains: finding contacts (networking); building trust; development of commitment; use of international standards and best practices; long-run work Improving supply chain management: focus on standards and enforcement; planning and control (costs and logistics / tracking); use of supply chain management Agro-logistics: Opportunities and perspectives in Ukraine Role of Government: A clear and favourable policy (stable and longterm;) attention to "value-added chains“; development of communications, transport infrastructure; attracting investment; law enforcement; ensuring fair competition among participants; adoption of the Commercial Code (title / transparent and streamlined proceedings of dispute resolution) Public-Private Partnership: Developing PPP and promoting international best practices; focus on clear results and strategic interests (mutual commitment); open platform for public-private information sharing; promotion of Ukrainian food Institutionalization and awareness: Seminars / workshops on certain chains; special studies and advisory service Experts estimate the amount of investment required to replace old storage facilities at USD2 billion modern cold vegetable stores at private farm level (and prerefrigeration storage facilities); rooms equipped with climate control systems for the storage of fruits on large specialized farms; modern warehouses near major cities that function as centres of distribution and provide services to wholesale dealers, importers and retailers.