Marketing Organizations in Pakistan: What Value Chain Analyses Do Not Tell US About Marketing Muhammad Iqbal, Saman Bakhtawar, Grant Vinning, Rob Erskine-Smith Balochistan Agriculture Project (FAO/USAID)
Food Security / Poverty Alleviation in Arid Agriculture Balochistan • Killa Saifullah • Loralai • Mastung • Food security
USAID Assistance to Agriculture in Arid Balochistan • Killa Saifullah • Loralai • Mastung • Zhob, Quetta • Food security • Make a small surplus
USAID Balochistan Agricultural Project • Killa Saifullah, Loralai, Mastung • Zhob, Quetta • Pishin, Musakhel • Sheerani • Food security, make a small surplus • Make a large surplus
AUS Assistance to Agriculture in Balochistan Border Areas • Killa Saifullah, Loralai, Mastung • Zhob, Quetta • Pishin, Musa Khel, Sheerani • Noshki, Chagai, Kharan, Panjgur, Kech, Washuk • Food security, make a small surplus, make a large surplus • Go commercial
Communities
> Loose grouping -> community organisations on community issues -> general marketing -> specific marketing
Value Chain (Expressed in Rupees per Acre Labour Irrigation Crop Protection Fertilizer Inputs Rs1000 Rs1000 Rs3000 Rs14000 Grower Ave Rs45k/Acre Ave Rs45k/Acre High R75k/Acre Remuneration Production @ 4,5T @ 8T/Acre @12T Value Rs4000 to Contract? Cost Agri Practices R30- R70K/Acre Rs26000/Acre Rs44000 /acre Undefined Rs7000 Rs10/kg Rs5.63/kg Rs6.25/kg Opportunity Cost? FFS National Contractor Contractor/ Middlemen Labour Sarghoda Rs1500/8tonnes 4,5T/Acre 12T/Acre Retail Guide Transport 8T/Acre Metro Makro Rs187/ton Rs5.60 to Rs20 – Rs22/Kg Rs1200 - Rs2933/Ton Rs18/kg Rs841 - Rs2244/ R11.20/Kg Contract Exporter Contract Juice Rs5400 to R35000 Rs720/40kg Rs800-Rs880/40kg Acre Rs448/40kg Rs250/40Kg Processing (Directly Variable) Selected Fruit Rs80/40Kg Kinnow Cost Fixed Ops cost Equipment Financing @ Packaging Port Handling Exporter Adjusted R180/ Rs17.64/Kg Rs4m@7000Ton 11% M U Depreciation? Transport to Port Variable Cost Charge 40kg to Rs250 Rs176/Ctn s Rs1,523K/7000T Rs0.39/kg Rs3,91/Kg Rs8.4/Kg Rs2.40/Kg Rs1.75/kg US$2.93 Rs0.57/Kg R0.22/Kg Rs3,9/Ctn R39.10/Ctn Rs84/ctn Rs24/Ctn Rs5,7/Ctn Rs2.20/Ctn Rs15.60/40kg Rs156.52 Rs336/40Kg Rs96/40kg Rs22.80/40kg R8.80/40kg FOB US4.2/Ctn Rs252/Ctn Rs25.20/kg Wholesale 1 st Receiver Offer @ US1 to Inland Distribution Port Discharge Shipping US1,5/kg US$1,50/Ctn US$1,50/Ctn US$3500/23000kg Rs60-Rs90 CIF Cost RS90/ctn RS90/ctn Rs9.13/kg Rs900/Ctn Rs125.50/kg Rs360/40kg Rs360/40kg Rs91.30/kg Rs3600/40kg Rs9/kg Rs9/kg Rs365.22 Repacking Retailer Instore Cost US1,50/ctn Rs143Rs/Kg 30% Consumer Rs90/Ctn Rs1430/ctn Margin=Rs61/kg Pays Rs204/kg Rs9/kg Rs5720/40kg
Value chains Production Marketing Bit in the middle
Production Wool Problem
Production Wool Solution
Bit in the Middle Apples Problem
Bit in the Middle Apples Solution
Marketing eeeekkkkkkkkk
Cooperatives
Farmer Marketing Collective • No credit • Business is not for free • Business Support Service Providers • Community audit
BSSP • Preferably from same area • Well versed in book keeping & accounting • Conversant with business operations • Good entrepreneurial, communication skills
Results Before feed the shearer, give him fleece Estimated farm gate price Rs 20 / kg Rs40 / kg Pre wash, grading Machine shearing premium Rs70 / kg Machine shearing increases clip by 20%
2013 FMCs 32 Rp 248 866 685
FMCs Financial Results – Quetta Net Sales per Unit Comparison (%) Apples FMC 360 34.3 Non-FMC 268 Apricots FMC 425 11.8 Non-FMC 380 Grape FMC 540 35.0 Non-FMC 400 Tomato FMC 486 47.3 Non-FMC 330
Lessons Group marketing of small holder farmers Capacity building of members Reliance on own capital Pay for professional advice - BSSP NO CREDIT
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