Bourquin PFID Mango Market Development Project Copy

8/14/2019 Bourquin PFID Mango Market Development Project Copy

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PFID:F&V India MangoPFID:F&V India MangoMarket Development ProjectMarket Development Project

Leslie D. Bourquin and Deepa ThiagarajanLeslie D. Bourquin and Deepa Thiagarajan

Partnerships for Food Industry Development: Fruits and VegetablePartnerships for Food Industry Development: Fruits and Vegetabless

Institute of International AgricultureInstitute of International AgricultureMichigan State UniversityMichigan State University

East Lansing, Michigan USAEast Lansing, Michigan USA


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The ProjectThe ProjectFocus on fresh and processedFocus on fresh and processed AlphonsoAlphonso andand KesarKesar mangoes inmangoes inMaharashtra state.Maharashtra state.

PFIDPFID--F&V located in Institute of International Agriculture at MichigaF&V located in Institute of International Agriculture at MichigannState University awarded a 3State University awarded a 3--year Associate Award by USAID, Indiayear Associate Award by USAID, IndiaMission (2004Mission (2004--2007)2007)

USAIDUSAID--India Program contactsIndia Program contacts Dr. Larry PaulsonDr. Larry Paulson

Dr. AleenDr. Aleen MukherjeeMukherjee (2004(2004--2006)2006)

India PFID Core Team and PartnersIndia PFID Core Team and Partners

MSU PFIDMSU PFID--India Core Team (Thiagarajan, Bourquin, Korstanje [through 6India Core Team (Thiagarajan, Bourquin, Korstanje [through 6--2006], Hanemann [92006], Hanemann [9--2006 to Present])2006 to Present])

MSAMB (Mohite, Borade)MSAMB (Mohite, Borade)

MSU PFIDMSU PFID--F&V Director (Freed/Allen)F&V Director (Freed/Allen)


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Project GoalsProject Goals

Increase net returns to farmers, by:Increase net returns to farmers, by:

Building capability among mango growers andBuilding capability among mango growers and

processors to meet international grades andprocessors to meet international grades andstandards for food safety and qualitystandards for food safety and quality

Strengthening linkages of mango growers andStrengthening linkages of mango growers andprocessors with higher value marketsprocessors with higher value markets

(domestic and export)(domestic and export)


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Program ElementsProgram ElementsInitial Assessment, SWOCA, Value ChainInitial Assessment, SWOCA, Value Chain

Analysis (preAnalysis (pre--awardaward2005)2005)

Capacity Building / Training / Certification ofCapacity Building / Training / Certification ofMango Growers on PreMango Growers on Pre--Harvest Food SafetyHarvest Food Safety

(Good Agricultural Practices) and Processors on(Good Agricultural Practices) and Processors onFood Hygiene (HACCP)Food Hygiene (HACCP)

Building Market Linkages for both fresh andBuilding Market Linkages for both fresh andprocessed mango products in the domestic andprocessed mango products in the domestic andexport markets.export markets.


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Visioning / Project PlanningVisioning / Project Planning -- SWOCASWOCA

Analyses and Value Chain AnalysisAnalyses and Value Chain Analysis

StrengthsStrengths

WeaknessesWeaknessesOpportunitiesOpportunities

ChallengesChallenges

ActionsActions

Developed in collaboration with Dr. Richard Bawden and Indian paDeveloped in collaboration with Dr. Richard Bawden and Indian participantsrticipantsduring the 2004 Delhi forum onduring the 2004 Delhi forum on Horticulture Market DevelopmentHorticulture Market Development

FollowFollow--up to original SWOCA conducted during workshop atup to original SWOCA conducted during workshop at TalegaonTalegaon--

DabhadeDabhade in February 2005.in February 2005.

AlphonsoAlphonso Mango Value Chain Analysis conducted in theMango Value Chain Analysis conducted in the KonkanKonkanregion in February 2005region in February 2005included visits to farms, packing facilitiesincluded visits to farms, packing facilitiesand processing units.and processing units.


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Primary Production ConditionsPrimary Production ConditionsKonkanKonkan Region (Region (AlphonsoAlphonso))volcanic basalt, widelyvolcanic basalt, widelyspaced trees, several years to establish production,spaced trees, several years to establish production,LOTS of new trees planted in last five yearsLOTS of new trees planted in last five years

Aurangabad Region (Aurangabad Region (KesarKesar))typical fruit orchards,typical fruit orchards,

close tree spacing, pruning, intercropping, rapid onset ofclose tree spacing, pruning, intercropping, rapid onset ofproduction, management and harvest much easierproduction, management and harvest much easier


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PostPost--Harvest HandlingHarvest HandlingMany pre-existing facilities and techniques are rather inadequateAdoption of modern grading / packing technology is limited, but growingthanks to investments by MSAMB, APEDA and private industryMajor exporters understand the requirements and have good capabilitiesto grade, pack and transport mangoes according to internationalstandards.


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PostPost--Harvest HandlingHarvest Handling


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IndiaIndiaEmerging Markets Demand ProduceEmerging Markets Demand Produce

Meeting High Standards for Safety and QualityMeeting High Standards for Safety and Quality

Traditional MarketsTraditional Markets

APMCs,APMCs, MandisMandisWet MarketsWet Markets

Exports toExports to lessless

discriminatingdiscriminating marketsmarkets(e.g. Middle East)(e.g. Middle East)

Business as UsualBusiness as Usual isis

acceptable for now, butacceptable for now, but

this is a lowthis is a low--value marketvalue marketsegment that will declinesegment that will decline

over the next decadeover the next decade

Emerging MarketsEmerging Markets

Organized RetailOrganized Retail

Hotels, FoodserviceHotels, Foodservice

Exports to DevelopedExports to Developed

CountriesCountriesTremendous pressure toTremendous pressure to

improve quality andimprove quality and

safety standards in ordersafety standards in order

to participate in this moreto participate in this morelucrative and growinglucrative and growing

market segmentmarket segment


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Traditional Mango Value ChainTraditional Mango Value Chain

MangoGrower

Localmiddleman

CommissionAgent /Trader

Wholesaler

Consumer Retailer

Traditional Market = High Transaction Costs

(only ~35% of value returned to farmer)


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Fewer Steps in the Process =Fewer Steps in the Process =

More Margin to the FarmerMore Margin to the Farmer

Improved supply chain under projectImproved supply chain under project

Direct linkages with supermarketsDirect linkages with supermarkets

MangoGrower Supermarket Consumer

Key AdvantagesKey Advantages

Lower Transaction CostsLower Transaction Costs Improved Quality ControlImproved Quality Control

Improved Food Safety and TraceabilityImproved Food Safety and Traceability


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Marketing Opportunities/Strategies Depend on theMarketing Opportunities/Strategies Depend on the

Willingness and Capability of Mango Farmers to MeetWillingness and Capability of Mango Farmers to MeetQuality and Safety Standards (e.g.Quality and Safety Standards (e.g. EurepGAPEurepGAP))

Farmers who are able toFarmers who are able to

implement/meet theimplement/meet the

standardstandard

Target organized retailTarget organized retail

and export marketand export market

Farmers who are unableFarmers who are unable

to or choose not toto or choose not to

implement the standardimplement the standard

Target improved accessTarget improved access

to traditional marketto traditional market

linkages with marginallinkages with marginal

financial returns.financial returns.


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GAPsGAPs Training ProgramsTraining Programs


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Field VisitsField Visits


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Capacity Building / Policy EffortsCapacity Building / Policy Efforts

In addition to farmers and processors,In addition to farmers and processors,

training was provided to State Departmenttraining was provided to State Departmentof Agriculture personnel fromof Agriculture personnel from five statesfive states..

Additional cadre of trained farmers andAdditional cadre of trained farmers andacademicians in Tamil Naduacademicians in Tamil Nadu

The project was very active in facilitatingThe project was very active in facilitating

development ofdevelopment of nationalnational GAPsGAPs standardstandard((IndiaGAPIndiaGAP), which is currently in review by), which is currently in review by

the relevant GOI ministries.the relevant GOI ministries.


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Summary of 2006 Market ActivitiesSummary of 2006 Market Activities

Domestic linkages with organized retailDomestic linkages with organized retail

Food BazaarFood Bazaar

ShopRiteShopRite

Direct linkages of producer groups andDirect linkages of producer groups andprocessors with exportersprocessors with exporters

Pune Mango FestivalPune Mango Festival

Direct Marketing at MSAMBDirect Marketing at MSAMB


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Growers and Acreage Involved inGrowers and Acreage Involved in

PFIDPFID--MSAMB LinkagesMSAMB Linkages -- 20062006

Fresh: Domestic and ExportFresh: Domestic and Exportestimatedestimated

Direct involvement of 68 AlphonsoDirect involvement of 68 Alphonso

growers, of which nearly half (48%) withgrowers, of which nearly half (48%) withholdings less than 2 Haholdings less than 2 Ha

200 Ha total under Alphonso mango200 Ha total under Alphonso mango

cultivationcultivation


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May 3May 3--7, 20067, 2006

55 small & medium growers participated55 small & medium growers participated

Direct marketing to customer resulted inDirect marketing to customer resulted in

estimatedestimated 2020--30%30% higher returns to farmerhigher returns to farmerthan market price through traditionalthan market price through traditional

linkageslinkages


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Increased Returns to FarmersIncreased Returns to Farmers

Estimated value of reduced intermediaries inEstimated value of reduced intermediaries in

value chain:value chain:

Domestic Fresh Market:Domestic Fresh Market:

Growers receivedGrowers received 20 to 30%20 to 30% higher returns thanhigher returns thantraditional channeltraditional channel

Fresh Export Market:Fresh Export Market:Growers receivedGrowers received 50%50% higher returns for GAPhigher returns for GAP--certified mangoes when compared to traditionalcertified mangoes when compared to traditionaldomestic marketdomestic market


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Lessons Learned from DomesticLessons Learned from Domestic

Fresh ProgramFresh Program -- 20062006

Retailers keen to partner with growersRetailers keen to partner with growers

Organized domestic retail is a rapidly growingOrganized domestic retail is a rapidly growing

highhigh--value market = expanded opportunities invalue market = expanded opportunities in

2007 and beyond2007 and beyond

Priority issues:Priority issues:

Price transparency / market intelligencePrice transparency / market intelligence

Safety, Traceability, QualitySafety, Traceability, QualityCondition andCondition and

consistency of productconsistency of product

Ensuring farmers recover implementation costsEnsuring farmers recover implementation costs


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Inadequate Market IntelligenceInadequate Market Intelligence


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Domestic MarketDomestic MarketFresh MangoFresh MangoSeasonal Price FluctuationSeasonal Price Fluctuation

2006 Alphonso Mango Prices2006 Alphonso Mango PricesStratified byStratified byGrade (size) and time of arrival at marketGrade (size) and time of arrival at market

354569175-200D4

NANANA200-225C3

NANANA225-250B2

70118173250-300A1

EndMidStartTime of the Season

Market Price (Rs /dozen)Size (g)GradeNo


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Food Safety /Food Safety /EurepGAPEurepGAP ImplementationImplementation

Certification costs ~Certification costs ~ RsRs

30,000 per farm.30,000 per farm.

Infrastructure improveInfrastructure improve--mentsments cost up tocost up to RsRs 11

LakhLakh in the first year.in the first year.


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Return on Investment by FarmersReturn on Investment by Farmers

Although farmers typically saw 20Although farmers typically saw 20--50% greater gross50% greater grossreturns on GAPreturns on GAP--certified mangoes in 2006, this wascertified mangoes in 2006, this wasusually insufficient to offset their firstusually insufficient to offset their first--year costs ofyear costs of GAPsGAPsimplementation.implementation.

This is test cricket, not oneThis is test cricket, not one--day cricketday cricket


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Marketing ObjectiveMarketing Objective -- 2007 Season2007 Season

Ten-fold increase in volumes transacted

under PFID/MSAMB Memoranda ofUnderstanding

2006 -- Actual: 30,000 3-kg cartons to FoodBazaar and Shoprite

2007 Forecast: 300,000 3-kg cartons totargeted retailers, exporters and processors


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Bourquin PFID Mango Market Development Project Copy

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