UNNExT Workshop on Promoting Cross-border Agricultural Trade for Sustainable Development

28-30 November 2016 Bangkok, Thailand

Value Chain Development and Sustainable Practices for Exporting Fresh Fruit

- What are the Lessons from Myanmar ??

UN-ESCAP Promoting Cross Border Agricultural Trade for Sustainable Development

Bangkok November 28-30, 2016

Dr. Astrid Faust Senior Advisor, Myanmar Fruit, Flower &Vegetables

Producer and Exporter Association (MFVP) www.mfvp.org

Table of Content

1. Key Terms: Value Chains, Sustainability and Fruit Exports

2. Myanmar at a glance 3. Strategies and challenges to facilitate market

access and for engaging smallholders for sustainable supply chains

4. Experiences (innovations/approaches) and Lessons Learnt

1

1. Value Chains, Fruit Exports and Sustainability Reflection on Key Terms

2

1. What is a Value Chain (VC)?

“…. a vertically integrated set of enterprises that deals with the same product group.”

e.g. Teak Products Teak growers

Teak traders (logging, transportation)

Furniture Factories (manufacturing, showrooms)

Domestic Traders (showrooms, shops)

Exporters (supplying importers from abroad, logistics, customs etc. )

3

1. Value Chains Value Chains – what is it?

Buzz Word for rural development project ?

What is special about VCs ?

Value Addition WIN-WIN – Share of Value Participation, Collective Action Governance, Creating Common Assets

Who is Involved in VC Upgrading?

Input Suppliers, Farmers, Processors, Traders, Consumers ++

Who is directing the process?

Individual Firms Private Sector Representatives/BMOs International Organizations NGOs Government (Union and State levels) Civil Society?

6

Farmers Proces-sors Traders

SP

SP

SP

Input Suppliers

WINROCK & US AID

MFVP Branch/Cluster Dry

Zone

MFVP Head Office

Players in Melon Value Chain – Myanmar Dry Zone

5

6

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Tons MT

Value ('ooo $)

2. Fruit Exports - Evolution of World Exports of Mango

“Exports" refers to selling goods and services

produced in the home country to markets in other

countries. Export of commercial quantities of goods normally requires

involvement of the customs authorities in both the

country of export and the country of import.

AFRICA

Middle East

EUROPE

NORTH AMERICA, Canada

ASIA North

ASIA South

Source: own analysis based on data from FAOSTAT 2010

Trade Flows of Mango

SOUTH AMERICA

SOUTH AMERICA

Central AMERICA

28-Nov-16

7

Japan

2. Global Mango Trade Flows

3 Sustainable Practices based on Sustainability Development Goals 2015 1

1. No Poverty 2. 0 Hunger 3. Good Health and Well Being 4. Quality Education 5. Gender Equality 6. Clean Water and Sanitation 7. Affordable and Clean Energy 8. Decent Work and Economic

Growth 9. Industry, Innovation &

Infrastructure

10. Reduced Inequalities 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 13. Climate Change 14. Life below Water 15. Life on Land 16. Peace, Justice and Strong Institutions 17. Partnership for the Goals

1 On September 25th 2015, countries adopted a set of goals to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda. Each goal has specific targets to be achieved over the next 15 years.

8

Triple Bottom Line +

3

SDGs

9

SDGs in 5 Categories

1. No Poverty 2. 0 Hunger

3. Good Health and Well Being 4. Quality Education 5. Gender Equality

6. Reduced Inequalities 10. Reduced Inequalities

8. Decent Work and Economic Growth 9. Industry, Innovation & Infrastructure

13. Climate Change 14. Life below Water

15. Life on Land

16. Peace, Justice and Strong Institutions

17. Partnership for Goals

10

Mixed/Result based SGDs

6. Clean Water and Sanitation

7. Affordable and Clean Energy

11. Sustainable Cities and Communities 12. Responsible

Consumption and Production

11

2. Myanmar at a Glance - Geography and Key Features of Agri-based Production

12

The country’s total area is 676,577 km2 , of which approx. 17.9 % is cultivated (2009). Approx. 17% of the cultivated area is used for horticultural crops. The countries cover a wide range of agro-climatic zones, which are feasible for both, the cultivation of tropical and temperate fruits and vegetable.

2. Myanmar at a Glance – Potential for Agricultural Production

13

Agriculture is a key driver of Myanmar’s economy.

The government’s economic development strategies focus on improving productivity and marketing in the agriculture sector not only to stimulate GDP growth, but also to help reduce poverty and boost food security.

The agriculture sector contributed around 36% of Myanmar’s GDP (2010) and still accounts for around 70% of total employment as well as 30% of the country’s exports.

There are an estimated 6.5 million rural households in Myanmar. Horticulture products - fresh fruits, vegetables and flowers - provide earnings for about 15% of the rural households (approx. 1 Mio households).

2. Myanmar at a Glance – Key Features

116

Export of Myanmar Fruits, 2007-2015 (value-million USD)

Source: Department of Trade Promotion, May 2015

0

10

20

30

40

50

60

70

80

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

Value(millionUSD)

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015( as on

31.4.2015)

1 Mango2 Watermelon3 muskmelon4 Banana

15

2. Myanmar at a Glance – Fruit trade profile

90% of trade volumes/values are effected by border trade to China

this fact is due to past trade sanctions and its effect on

Physical infrastructure

Supply chain logistics

Development of trading hubs

Quality infrastructure

Two other factors

(1) high transportation cost inside the country,

(2) Limited consistency and transparency regarding rules and regulations for exports (Myanmar side)

Limit trade, they constitute trade barriers.

16

Shaping Future Opportunities for Fresh Fruit & Food Production

from Myanmar

Market Diversification & Development

Enabling Environment

& Cross Commodity

Services

VC Development

& Governance

3. Strategies and challenges to facilitate market access for Myanmar Farmers 17

3.1 Value Chain Upgrading Projects

Melon, Mango, Avocado, Tea, Others (Coffee, turmeric, vegetables etc.)

Identify cooperation partners (local and international organizations GIZ, WINROCK, LIFT, FAO, etc.)

Assess relevant markets inside and outside the country

Assess competitiveness of products on respective markets

Participatory planning of VC upgrading with all actors or their representatives

Identify/build a body (association, branch, product cluster) who is able to implement VC upgrading strategies and build respective capacity–on-the-ground

18

3. 2 Development of Cross-Commodity Facilities

Capacity building/training of farmers, packing house operators, processors, traders

Policy Advice Quality Infrastructure

Capacity building of public services providers (MOALI)

Integrated public-private partnerships for GlobalGAP, PGS+

Facilitating joint learning among Product Cluster e.g. by defining quality standards and protocols

19

3.3 Development of New Markets/ Facilitation of Cross-Border Trade

Organization of Product Festivals (Mango, Pomelo, Avocado) and Local FFV Trade Fairs (e.g. Shan State)

Participation in ASEAN Trade Fairs (ThaiFEX, SIMA, Horticultural Trade Fairs Naning, Khunming etc.), Promotion Campaigns (Mango Coffee, Avocado)

Business Matches, Pilot Shipments Annual Supply Plans for Champion

Commodities Facilitation of Joint Learning among Product

Cluster

20

Contributions to SDGs by Developing the

Myanmar Food Sector

Decent Work and Economic Growth

Reduced Inequalities

Peace, Justice and Strong Institutions

Partnership for the Goals

Good Health and Wellbeing of Farmers

and Consumers

Minimizing Environmental Impact

(life on land)

21

1. No Poverty 2. 0 Hunger

3. Good Health and Well Being

4. Quality Education 5. Gender Equality

6. Reduced Inequalities 10. Reduced Inequalities

8. Decent Work and Economic Growth

9. Industry, Innovation & Infrastructure

13. Climate Change 14. Life below Water

15. Life on Land

16. Peace, Justice and Strong Institutions

17. Partnership for Goals

4. Experiences and Lessons Learnt Exporting Perishables is a High Risk Business, you need good physical and quality

structure for it and whole range of functional services. Japan and EU are demanding overseas markets with competitive supplies from

allover the world. Don’t start with the most difficult thing and try to small scale farmers in remote

supply clusters with EU markets on perishables, use it as a long term vision. Develop options for diversifying markets inside the country and ASEAN, develop

supplies, quality or unique selling points while minimizing risks. The rule in perishables is “What can go wrong, will always go wrong”.

Network, different partners have different core competencies. Build ownership and develop business cases/models for lacking services. Work with larger companies for pilots to demonstrate “first moves” (e.g. via

iPPPs) and generate outreach by adding a capacity building step for related grower clusters

22

Thank you for your interest and attention!

Dr. Astrid Faust

Senior Management Advisor UMFCCI & MFVP Yangon, MYANMAR

astrid.faust@cimonline.de