Assessing small-holder Participation in Vegetable value chains tomato, bell pepper, cucumber, broccoli, lettuce, carrot

1. Assessing small-holder Participation in Vegetable value chainstomato, bell pepper, cucumber, broccoli, lettuce, carrot and potato Cases from El Salvador & Honduras, in collaboration with FAO, CIAT, CRS, Agropyme Presented by Madelon Meijer, Agricultural and Development Economics Division (ESA), at the ‘Governance, Coordination and Distribution among Commodity Value Chains’ workshop, FAO, Rome, April 2006.

2. Structure of the presentation • Purpose of the study • Brief note on the methodology used • Results of the analysis • Points of reflection/discussion

3. Purpose of the study: Confront the barriers of linking small farmers with the supermarket supply chain  • Identify bottlenecks • Facilitate strategic alliances

4. Semi-participative CHAIN ANALYSIS CONSTRUCTION OF AN ACTION PLAN TO IMPROVE CHAIN GOVERNANCE Participative Strengthening of Producers Organizations Participative IMPLEMENTATION OF THE ACTION PLAN GLOBAL STRATEGIES (2) Mechanisms for stakeholder dialogue General scheme for value chain analysis and intervention plan (from SNV-Peru)

5. Analysis Define the space of analysis Territory Product Product flow USE OF NATURAL RESOURCES INFLUENCE OF EXTERNAL FACTOR • SINTHESIS OF ANALYSIS • Competitiveness • Comparative advantages • Bottlenecks • Sustainability ACTORS AND INTERRELATIONS Production Wholesale Retail Consumption Services HISTORY MARKET AND CONSUMER DEMAND

6. Evolution of the relation supermarket – producer

7. THE ENABLING ENVIRONMENT 70s: Veg.production on scale MINAG: agricultural policy Competitive framework for the horticultural sector CAFTA Imports Ag. hhs: 317.000; Veg. producers: 15.000 Specialized wholesaler Large producers 0.12 % Restaurant Lead farmer n=13 Hotel Medium producers 24.6% % Producer organization n=395 Hospital Small producers 72 % Traditional wholesaler Traditional retailer Unorganised farmer Traditional informal trader ORGANIZATION HARVESTER COORDINATION ROAD TRANSPORT STORAGE & BULKING UP LABELS AND STANDARDS BUSINESS SERVICES TECHNOLOGICAL EXTENSION MARKET INFORMATION QUALITY CONTROL CEL PHONES PACKAGING Vegetable chain in Honduras Supermarket n=51; 43% FM

8. COHORSIL 185 members Annual sales US$ 89.000 APRHOFI 110 members Annual sales US$ 184.000 ACOPO 23 members Annual sales US$ 140.000 AGROLEMPA 70 members Annual sales US$ 177.000 PHOC 143 members Annual sales US$ 96.000

9. Growth of the ‘lead farmer model’

10. Analysis • Margins, costs and benefits • Gap analysis: requirements vs. what small farmers can currently offer • NRM Impact

11. 1. Distribution of final consumer price among supply chain actors in Honduras

12. Tomato, wholesale price in TGU y SPS (Lps/Lb) 9.00 Período de análisis de precios en la cadena ZONAL BÉLEN 8.00 MEDINA CONCEPCIÓN/DANDY 7.00 6.00 5.00 4.00 3.00 2.00 1.00 2004 2005 0.00 Jan 04 Jan 14 Jan 25 Jul-05 Jul-15 Jul-25 Jun-07 Jun-17 Jun-27 Sep-03 Sep-13 Sep-21 Aug 06 Aug 16 Aug 24 Oct-01 Oct-11 Oct-22 Nov-02 Nov-12 Nov-22 Nov-30 Feb-04 Feb-14 Feb-22 Apr 01 Apr 11 Apr 20 Apr 29 Dec 10 Mar-04 Mar-14 May-10 May-20 May-30 Date Fuente: www.agroemprendedor.org, basado en precios SIMPAH

13. 10.36 Supermarket-Consumer 7.25 Sp. wholesaler-superm. Wholesaler SELL Specialized wholesaler 5.10 4.66 Producer org. 4.06 Trader farm gate 3.89 3.45 Wholesaler BUY 1.60 Production costs Tomato (03 april 2005- 04 june 2005) Lps/Libra 12.00 10.00 8.00 Wholesaler SELL max. average 7.48 6.00 Wholesaler SELL average 4.55 4.00 Wholesaler SELL min. average 2.48 2.00 - Los precios Mayorista VENTA máximo promedio, promedio y mínimo promedio corresponden a un período de dos años Los demás valores corresponden a valores promedio de diferentes actores en cada eslabón en diferentes ciudades para el período del 03 de abril al 04 de junio del 2005.

14. Tomate Manzano LA CARRETA Tomate Manzano LA CARRETA Tomate Manzano SAN LUCAS Resumen de aspectos relevantes en la cadena de Tomate de mesa Comerciales Técnicos • Los supermercados en Hondura demandan 28.5 Toneladas por semana. • La presentación de mayor venta es a granel. También se encuentra empacado en bandejas de foam #2 (cinco a seis tomates) y en mallas plásticas (pesos variables). El peso promedio por unidad es de 130 gramos en bandeja y de 232 gramos a granel. • La única marca Hondureña es “Zamorano”, las demás marcas son importadas de Guatemala (“La Carreta”, “San Lucas Fresh” y “BELUGA’S”). • LA CARRETA y BELUGA’S (San Lucas Fresh) están certificados por la PIPAA de Guatemala en cuanto a inocuidad de alimentos que garantiza el cumplimiento con buenas prácticas agrícolas (BPA’S) y buenas prácticas de manufactura (BPM). • Las normas de calidad para comercializar tomate manzano exigen forma y tamaño uniforme, turgente, libre de enfermedades, libre de daño mecánico, con un mínimo de 50% de coloración roja, sin deformaciones, sin sucio. • El precio por caja de 25 libras es de USD 4.62 para el tomate de primera y de USD 2.56 para el tomate de segunda. La variación de precios se puede apreciar en la gráfica adjunta. • La plántula para el transplante es producida principalmente en invernaderos comerciales. Dado el alto costo de la semilla híbrida, esta práctica es cada vez más común. • Los suelos deben estar bien nivelados para obtener un buen drenaje y reducir la incidencia de enfermedades. Se prefieren los suelos sueltos en época lluviosa. • Los tomates para el mercado fresco son cultivados en forma arbustiva, con soporte y cosechados en estado verde-maduro (aproximadamente de 80 a 110 días después del transplante). • En la zona de siguatepeque, se utiliza mayormente el riego por goteo, con rendimiento promedio de 42 toneladas por hectárea (60% de primera calidad y el 40% de segunda o tercera). • Las principales enfermedades son mancha bacteriana, tizón temprano y tizón tardío (Xanthomonas campestres, Alternaria solani y Phytophthora infestans respectivamente). • Se debe transportar al mercado de destino clasificados en canastas.

15. Required investment - tomato

16. 3. NRM impact To meet requirements: Investment needed in • Management techniques • waterharvesting and drip irrigation • contour planting • soil conservation / IPM / GAP • Organizational issues • scaled planting • post-harvest management • marketing

17. Vegetable chain in Honduras THE ENABLING ENVIRONMENT 70s: Veg.production on scale MINAG: agricultural policy Competitive framework for the horticultural sector CAFTA Imports Ag. hhs: 317.000; Veg. producers: 15.000 Supermarket n=51; 43% FM Specialized wholesaler Large producers 0.12 % Restaurant Lead farmer n=13 Hotel Medium producers 24.6% % Producer organization n=395 Hospital Small producers 72 % Traditional wholesaler Traditional retailer Unorganised farmer Traditional informal trader ORGANIZATION HARVESTER COORDINATION ROAD TRANSPORT STORAGE & BULKING UP LABELS AND STANDARDS BUSINESS SERVICES TECHNOLOGICAL EXTENSION MARKET INFORMATION QUALITY CONTROL CEL PHONES PACKAGING

18. Conclusions • Regarding horizontal coordination: Low levels of organization among small holder producers • Regarding vertical coordination: Lack of coordination among supply chain actors • Regarding the enabling environment: Public policies of of step with chain reality

19. Main recommendations • strengthen the ‘espacios de concertación’. • develop alternative organizational models • improve the linkage between supply and demand of service provision, esp. financial services (credit, leasing, compra de facturas and ag. insurance) • improve public policies, aimed at both making the chain more competitive and with a fair distribution of benefits

20. Discussion points • Replicability of PO support • Experience in alternative organizational / business models • Implications for policy • Further empirical work required