meeting the challenge linking small vegetable farmers to the mainstream markets presented by: joan...
TRANSCRIPT
Meeting the Challenge
Linking Small Vegetable Farmers to the Mainstream Markets
Presented by: Joan C. UyChair, Resource Mobilization Committee, NorminVeggiesandPresident/Gen. Manager, NORMINCORP
(service)• 114 producers
• Small growers (independent)
• Small farmers groups
• Corporate farms
• Input/service providers
• Academe
(Northern Mindanao Vegetable Corp.)
“NORMINCORP”
(Marketing)
cabbage carrots
lettuce
tomato
strawberry
CLUSTERS
broccoli
LEGONG ProjectVegetable Growers (Municipality of Impasug-ong, Bukidnon Province, Philippines)
Core Group of vegetable farmers in 4 barangays (villages)
Marketing Services (Northern Mindanao Vegetable Corp.)
“NORMINCORP”
Infrastructure
KAANIB Foundation
Lutheran World Relief (LWR)
Kauyagan Savers CoopLeverage Fund/
Financing
•Mgt. Assistance•Input Source/Credit•Techno devt.•Prodn & Post Harvest
Mainstream market access of small farmers to increase income and reduce poverty with NorminCorp
NorminCorp Key Products Independent Growers
Small Farmers
Iloilo
Zamboanga
Gen. Santos
Product Flow thru NorminCorp‘s marketing facilitation
“A good market is the key to increase farm income”
Unsorted, unwashed, packed in sacks
Washed, air dried, sorted, packed in boxes, sweet tasting varieties, deep orange color and small inner core
Last week’s prices; May 2005 (Php/kg.) 10.00 – big08.00 – med06.00 – standard04.00 – small02.00 – super small
Wet market Supermarket Distributor (e.g. Iloilo)
18.00 – big/med13.00 – small
Vegetable Markets
Wet/Mass Market•Agora (Cag. de Oro City)
wholesale traders •Retail wet market stall
operators
Numerous, dispersed traders
Arbitrary quality standards
Highly fluctuating prices
Spot trading (fluctuating volumes)
Vegetable Markets
Institutional Market(Differentiated Market)
• Fast food/Quick service establishments
• Hotels and restaurants
• Food distributors (supermarkets, hotels & restaurants)
• CaterersBig name customersWell defined, clear quality
specsWith Quality Control
procedures for acceptance/rejection
Needing vegetables with regular frequency and long-term arrangements
The concept of best value
Institutional Market
Growers
Buyers: who among the growers/suppliers would give the best value?
• Quality – Recovery
• Delivery & Reliability – Timeliness
• Prices – Value for money
Implication: “Quality management and operational efficiency needs to be established at the farm & post harvest concerns”
Growers: Does quality Management and operational efficiency give best value? Is it worth doing the work?
“$?”
The Value Chain Analysis
Farmgate Price
Labor
Packaging
Transport
Freight
Facilitation Fee
Buying Price
The Institutional Market is the driving factor in developing a value chain system
Wet Market price
Added Value
NorminCorp is just a facilitator. Since grower is given the buyer’s price, he/she is accountable for the product up to the buyer’s end.
Transport/Cold Storage
transport Packing Shed Post harvest tools,
packing & labeling materials
Harvest containers, tools
Fertilizer, insecticide/ fungicide, bio-con, irrigation
Seeds/seedling medium
Tools/Equipment
“Quality Assurance
Plan (QAP)”
Transport for Consolidation
Hauling/Sorting/Grading Packing
Harvesting
Cultural Management
Planting/Transplanting
Land Preparation
Market
Roads Irrigation Communications System
Financing
Getting growers’ acts together through the Clustering approach
A grouping of producers who undertake a common marketing plan for a particular products for identified market
It is product based
It is a strategy to respond to the challenge to transform fragmented, smallholder farm production to market-focused and highly competitive business operations
Buyer’s visit
In the cluster, growers share best practices to attain a relatively homogenous quality of products
Land prep
Thorough land prepPlastic Mulch
BedsMulch
Nursery
Plastic Seed Tray
Indigenous seed trays
Irrigation
Flooding
Sprinkler
Drip irrigation
Watering
Tropical Rain shelters
Trellis Open field
Planting
Compost
Harvest
Post Harvest
Packing House
Sorting, cleaning, treatment
Packing
Packing
Transport from the farm
Regular Truck
Reefer Truck
Animal Hauling
Transport for outshipment(Manila, Cebu, Etc.)
Break BulkClosed Container Van
Reefer Van Perforated Container Van
When we assist small farmers, we confront these production and postharvest situations
Lack of Integrated Pest Management (IPM)
Production
Lack of irrigation
Choice of plant varieties not always preferred by buyers
Post Harvest
Transport
The Challenge to transform small farmer’s practices …
From this To this
Steps in Assisting Small Farmers 1/3
1. Organization of a core group in a barangay (village)
2. Data gathering at the production site:- products - production practices- cost - yields- prices - buyers & market players- the growers (area) - Resources & limitations
3. Shortlist five (5) main products
Steps in Assisting Small Farmers 2/3
4. Data gathering beyond the production site (Market)
5. Show quality management to reach the market
opportunities (product match with potential buyers) Analyses of the four(4) areas of enterprise to screen
the most promising products Selection of two(2) to three(3) promising products
Objective: raise awareness for the needed work to be done (responsibility for quality)
Objective: raise awareness for the need to work together (core group Cluster participation)
Steps in Assisting Small Farmers 3/3
6. Decision point: Core Group joins the Cluster vis-à-vis NorminVeggies
7. Development interventions
• Budget per economic module• Production protocol and QAP “what to do in the farm”• Production scheduling for the group (harvest calendars)• Cost and returns (packing lists, farmers’ ledgers)
a. Tools
b. Creditc. Extension
• Farm visits (visit cluster areas)• Technical assistance (production guide)• Trainings
d. Marketing assistance
Conclusions
A good market is the key to increased farm income, a viable farm enterprise, and for small farmers, poverty alleviation
Institutional markets provide the good market because they give growers the opportunity to develop a value chain system that brings additional earnings
Conclusions The value chain system
empowers growers for they own the product up to the buyer’s end. But with it is the corresponding accountability for the output in terms of quality and delivery reliability
The key to success is constant innovation that increase quality, build operational efficiency and lower cost, and also the management of the relationship among supply chain participants
• Growers• Service providers• Buyers• Development partners
(government and private)
Conclusions Meeting the challenge to
link small farmers with the institutional markets require development interventions that build their capacities for new or expanded production with value addition:• Technology
• Management assistance in production and post harvest
• Input sources (credit)
• Market linkage and services)
ConclusionsThe clustering approach of NorminVeggies where small farmers can exist side by side with the independent, better-resourced growers provide the “short-cuts” for farmers to build competencies.
They can enjoy the advantage of collective know how, resources, and market contacts, otherwise, inaccessible to small individual growers.
CONCLUSIONSTo be a significant market player,
Size is not everything!
• We can be small but act large through the cluster (volume growth)
• We can be small but act sophisticated relative to institutional market demand (value growth)
Thank you