Muhammad Iqbal, Saman Bakhtawar, Grant Vinning, Rob Erskine-Smith - - PowerPoint PPT Presentation

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

Wholesale 1st Receiver Production Contractor/ Middlemen Exporter Retailer Inputs

Labour Rs1000 Irrigation Rs1000 Crop Protection Rs3000 Fertilizer Rs14000 Agri Practices Rs7000 Opportunity Cost? Grower Remuneration Contract? R30- R70K/Acre Labour Rs1500/8tonnes Rs187/ton Rs841 - Rs2244/ Acre (Directly Variable) Transport Rs1200 - Rs2933/Ton Rs5400 to R35000 Retail Guide Rs5.60 to R11.20/Kg Rs448/40kg Metro Rs18/kg Rs720/40kg Makro Rs20 – Rs22/Kg Rs800-Rs880/40kg Contract Exporter Rs250/40Kg Selected Fruit Contract Juice Processing Rs80/40Kg Packaging Variable Cost Rs8.4/Kg Rs84/ctn Rs336/40Kg Fixed Ops cost Rs4m@7000Ton s Rs0.57/Kg Rs5,7/Ctn Rs22.80/40kg Equipment Financing @ 11% M U Rs1,523K/7000T R0.22/Kg Rs2.20/Ctn R8.80/40kg Depreciation? Rs0.39/kg Rs3,9/Ctn Rs15.60/40kg Transport to Port Rs3,91/Kg R39.10/Ctn Rs156.52 Port Handling Charge Rs2.40/Kg Rs24/Ctn Rs96/40kg Shipping US$3500/23000kg Rs9.13/kg Rs91.30/kg Rs365.22 Port Discharge US$1,50/Ctn RS90/ctn Rs360/40kg Rs9/kg Inland Distribution US$1,50/Ctn RS90/ctn Rs360/40kg Rs9/kg Cost Rs26000/Acre Value Rs4000 to Rs44000 /acre National 4,5T/Acre FFS Sarghoda 8T/Acre Contractor 12T/Acre Ave Rs45k/Acre @ 4,5T Rs10/kg Ave Rs45k/Acre @ 8T/Acre Rs5.63/kg Offer @ US1 to US1,5/kg Rs60-Rs90 Rs900/Ctn Rs3600/40kg FOB US4.2/Ctn Rs252/Ctn Rs25.20/kg CIF Cost Rs125.50/kg Instore Cost Rs143Rs/Kg Rs1430/ctn Rs5720/40kg Repacking US1,50/ctn Rs90/Ctn Rs9/kg High R75k/Acre @12T Rs6.25/kg 30% Margin=Rs61/kg Consumer Pays Rs204/kg Undefined Cost Rs17.64/Kg Rs176/Ctn US$2.93 Kinnow Adjusted R180/ 40kg to Rs250 Rs1.75/kg

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
• Pre wash, grading

Rs40 / kg

• 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