Report No. 5007-PO Portugal AgriculturalSector Survey A Near-termAction Programfor Agriculture Volume Ill Public Disclosure Authorized July 20,1984 Regional Projects Department Europe,Middle Eastand North Africa RegionalOffice Agriculture 11Division FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized
Public Disclosure Authorized Documentof the World Bank
This document has a restricted distribution and may be usedby recipients only in the performanceof their officialI duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS
March, 1983 - USS 1 Escudos (Eac) 94.00 Esc. 1.00 = USt.0106 December, 1983 UStl - Escudos 130.00
WEIGHTS AND MEASURES
(Metric System)
ABBREVIATIONS
BFN Banco de Fomento Nacional (National Development Bank)
BOP Bank of Portugal
CAP Common Agricultural Policy
CCAM Caixa de Credito Agricola Mutuo (Agricultural Credit Cooperative)
CGD Caixa Geral de Depositos (General Deposit Bank)
DGHEA Direccao Geral de Hidraulica e Engenharia Agricola (General Directorate for Agricultural Water Resources and Engineering)
DGRAH Direccao Geral de Recursos e AproveitamentosHidraulicos (General Directorate for Hydraulic Resources and Development)
DRA Direccao Regional da Agricultura (Regional Agriculture Directorate)
EEC (EC) European Economic Community
EPAC Empresa Publica de Abastecimento de Cerais (State Enterprise for Grain Marketing)
EUROSTAT Statistical Office of the European Communities
FA Fundo de Abastecimento (Supply Fund)
FAO Food and Agricultural Organization of the United Nations
FFF Fundo de Fomento Forestal (Forestry Development Fund) FOR OFFICAL USE ONLY
- ii -
IAPO Instituto do Azeite e Produtos Oleaginosos (Oil and Oilseeas Institute)
IACA Associagao dos Industriais de Alimentos Compostos para Animais (Association of Animal Feed Manufacturers)
IFADAP Instituto Financeiro de Apoio ao Desenvolvimento da Agricultura e Pescas (Agriculture and Fisheries Development Fund)
IGEF Instituto de Gestao e Estructuragao Fundiarias (Institute for Land Management and Reform)
INE Instituto Nacional de Estatistica (National Statistical Institute)
INIAER Instituto Nacional das Investiga;ao Agraria e Extensao Rural (National Institute of Agricultural Research and Extension)
JNF Junta Nacional das Frutas (National Fruit Board)
JNPP Junta Nacional dos Produtos Pecuarios (National Board for Livestock Products)
JNV Junta Nacional do Vinho (National Wine Board)
MACP Ministerio da Agricultura, Comercio e Pescas (1inistry of Agriculture, Commerce antdFisheries) (Has been reorganized to become NAFA)
MAFA Ministdrio da Agricultura, Florestas e Alimentacao (Ministry of Agriculture, Forestry and Food)
P14A Piano de Mudanca da Agricultura (Agricultural Development Plan)
PROCALFER Liming, Fertilization, and Fodder Crop Program
RICA Rede de Informa;ao de Contabilidades Agrfcolas (Farm Accounts Information System)
UCP Unidades Colectivas de Produ;ao (Agricultural Production Collectives)
USAID U.S. Agency for International Development
ZIRA Zona de Interven;ao da Reforma Agr4ria (Agrarian Reform Zone)
Ti documant has a resticted distbution and may be used by recpients only in the peformance of their ofrici duties. Its contents may not otherwise be dislosed without World Bank authoiation PORTUGAL
AGRICULTURALSECTOR SURVEY
A NEAR-TERMACTION PROGRAMFOR AGRICULTURE
Table of Contents
(Volume III)
ANNEX1 : The Natural Resource Base for Agriculture
ANNEX 2 : Field Crops and Cropping Patterns 1/
ANNEX 3 : The Livestock Subsector 1/
ANNEX 4 : Fruits and Vegetables 1/
ANNEX 5 : Agricultural Research and Technological Opportunities 1/
1/ In English and Portuguese
Information in these reports reflect available data from the World Bank Sector Mission of March 1983. - 1 -
PORTUGAL
AGRICULTURAL SECTOR SURVEY
A NEAR-TERM ACTION PROGRAM FOR AGRICULTURE
ANNEX 1: THE NATURAL RESOURCE BASE FOR AGRICULTURE
1. INTRODUCTION ...... *.eeo*** ...... * ...... * 1
II. SOIL .. *...... ****c***************** 1
Soil Acidity ...... 2 Soil Drainage ...... *...... *...... 2
III. CLIMATE ...... 22......
IV LAND USE s ...... e.o ...... o. 3
Land Use Capability ...... 3 Exploitation of Agricultural Resources ...... 4 Agricultural Regions ...... 5 - 2 - ANNEXI Page 1
2190E/mld PORTUGAL
AGRICULTURALSECTOR SURVEY
THE AGRICULTURALRESOURCE BASE
I. INTRODUCTION
1. Mainland Portugal comprises two almost equal size, but distinct topographicaland climatic regions divided by the Tagus river which flows into the Atlantic Ocean at Lisbon, (Map 17193). North of the Tagus, Portugal is mountainous with a rainy, moderately cool climate; the south has rolling plains, less rainfall and a warm climate, particularly in the interior. Although this is broadly true, the reality is that the country is extraordinarily heterogeneous for its size. It is broken up by 11 rivers of total length of approximately 1,860 kms and extensive mountain ranges that affect rainfall patterns, produce contrasting aspects and accentuate the continentality of the climate. This annex describes the main physical features and then discusses the implications of these for agricultural production.
2. The total area of Portugal is estimated to be 8,888,000 ha, which includes approximately 44,000 ha in three large estuaries. The 11 rivers referred to above, of which five arise in Spain and six in Portugal, have total drainage basins in Portugal estimated to be 7,983,000 ha or 90% of the total surface of the country.
3. Almost half of the area north of the Tagus has an elevation above 400 m, with several mountains, including the Serra de Estrela, exceeding 1,200 m. Less than 3% of the southern section is above 400 m and 63% is at less than 200 m in elevation. General relief is shown in Map 17193.
II. SOIL
4. The nature of soils depends largely on the nature of the bedrock from which they develop and in Portugal these are quite diverse. Map 17195 presents the detailed soil classes of the official soil survey map to show the broad soil groups. North of the Tagus, particularly on the western side, skeletal soils and slightly leached soils predominate on the large granitic massif. There are extensive rocky outcrops, but also valleys of fertile alluvial soils. The soils of the north east are derived mainly from schists, with a limited area of heterogeneous soils derived from calcareous and sedimentary rocks. South of the Tagus, soils have developed from schists, sandstones, calcareous and sedimentary rocks and a small area of granite, thus giving rise to a wide range of soil types. Despite the relatively large number of rivers that cut the country, there is a relatively small area of rich flood plains of alluvial soil, which are shown on the soils map (17195) as fluvisols. ANNEX1 Page 2 5. Soil Acidity. The majority of soils in Portugal are acid to extremely acid. Enough soil analyses have been done in Portugal so that by taking these analytical data in conjunction with the detailed soils map, it has been possible to produce a map which depicts the quantity of lime needed to raise soil pH to 6.5. This map resembles the soils map, with the granitic soils having very high lime needs, the calcareous group having no need and the other soils having intermediate requirements. Furthermore, using this criterion, rather than the pH in the top 20 cms, is of questionable validy, since the requirement for lime is influenced by the amount of soil organic matter, the texture of the soil and the type of liming material. The area of granitic soils is extremely acid and the area of soils derived from sandstones, mainly podsols, is only moderately acid. Much more work has been done to establish the quantities of lime needed to raise soil pH to an optimum level of 6.5 than has been done to relate soil acidity to plant growth and to fertilizer use efficiency. Below a certain level of soil pH, the yield of the most sensitive crop in the rotation is reduced. Lucerne, for example, is a crop for which the soil pH should be around 6.5. However, most crops grown in Portugal grow at a pH below 6.5 and hence the emphasis on the need for lime is being exaggerated.
6. Soil Drainage. Soils of the Alentejo region are frequently described as poorly drained and indeed problems of water logged soils occur even in years of average rainfall. The effect of water logging is to reduce yields of winter crops of which wheat is the most important, by interfering with cultural operations and inhibiting proper root development. Excess soil moisture in the Alentejo region is an inherent characteristicbecause the problem of the local combination of factors of climate, geology, geomorphology and topography and the problem is sometimes aggravated by inappropriate farming practices. Although annual average rainfall in the Alentejo is modest (varies around 600 mm), it falls mainly between November and May when evapotranspiration is at its lowest. Soils are either shallow, overlying impermeable lower horizons, or when deeper have high clay contents particularly in the lower horizons. In both instances the soils are readily saturated md hold the water tightly. The topography is of low rolling hills and elevati,.ons,normally less than 400 meters. Steep slopes are short and underlying rocks are hard. All these factors have led to a very restricted natural drainage system. The poorly developed stream system is qui_kly overloaded and surrounding flat areas are easily inundated. Farming practices which obstruct natural drainage lines or which induce erosion that in turn leads to in silting of the inadequate natural drainage system, aggravate the problem. The area affected by poor drainage is officially estimated, from small scale soils maps, as being about 400,000 ha, but it has been suggested as the result of field visits that the total of seriously affected land is closer to 250,000 ha out of approximately 800,000 ha of land classed as suitable for arable agriculture.
III. CLIMATE
7. Although the climate is predominately mediterranean, it is moderated by the Atlantic Ocean and the mountains of the Iberian Meseta. From west to east, the moderacing influence of the Atlantic gives away to the continental influence of the mountains. From north to south, the influence of the mountains gives away to the influence of the mediterranean. Map 17196 shows rainfall isohyets. Summer drought, variability from season to season and from year to year, are thought to be constraints to farm production. This has not - 4 - ANNEX_I Page 3 been analyzed from the 30 year rainfall data, but this should be done, as should drought frequencybe calculated. Frost frequency is shown on Map 17255, hours of sunshine on Map 17254, and solar radiation on Map 17256 because these three climatic factors are of importance to the production of fruit and are relevant to the assessment of possibilitiesfor which Portugal may have comparativeadvantages. Climatologistshave mapped seasonal rainfall,mean air temperaturesand evapotranspirationpotential, but these are not reproduced in this report. In standard bioclimatic terms used in the Bioclimaticmap of the Mediterranean Zone, all of Portugal is covered by one or other of the sub-groups of mediterraneanclimate.
IV. LAND USE
Iand Use Capability
8. In order to ensure optimum land use, it is important that the land resources be assessed in terms of their suitabilityat different levels of input for differenc types of land use, includingagriculture, grazing and forestry. Classificationhas been made in Portugal in terms of soil classes A to E, that is, from the most suited for agriculture through to non-agriculturalland. Map 17194 presents a broad overview of the suitability of land for agriculture in three categories to illustrate (a) the limited amount of land that is well suited to some form of agriculture;and (b) the relatively large area that is generally not suited-to agricultureat all except for 8mall valleys and terraces within it. It is thereforedifficult to assess how much land is available for agriculture. In order to provide a basis for planning a land use capability study should be undertaken using criteria includingan economic evaluation. This is particularlyimportant in Portugal, in view of the extreme heterogeneity of soils and topographyand the scarcity of good land for farming. However, it is not considered to be too difficult, since extensive soil mapping and the classificationhave already been done in some detail.
9. Reliable data on land use are scarce despite the detail available for some areas. The following rounded figures broadly specify land use.
ha Total area of Portugal 8,888,000 Area classifiedagricultural (A + B + C) 2,377,900 Area classified non-agricultural(D + E) 6,344,400 Area social, saline etc. 165,700 Area cultivated 3,438,000 Area in forest - excluding oak 1,777,200 oak (hence sparse or 1,190,800 very sparse) 1/ total forest 2,968,000 Area of fruit and vines - solid olive orchards 2/ 570,000 - wine grapes 355,000 - fresh and dry fruit 273,000 Total fruit and vines 1,198,000 Area of irrigation- traditional 563,000 - public schemes 79,000 Total irrigation 642,000
1/ An estimated 45Z of the oak area is cultivated and hence double counted (535,900ha) 2/ There is an estimated 315,000 ha of scattered olives with the land around them - cropped or grazed. ANNEX 1 Page 4 10. The country is divided into 18 administrative districts and into seven agricultural regions. The region boundaries do not always follow the administrative district boundaries, since some municipalities are added or subtracted to give greater homogeneity to the agricultural regions. Table 1 lists administrative districts and agricultural regions. Nevertheless for land use capability purposes, the soil and physical form is so varied within a zone that agricultural regions have been subdivided further for planning purposes to arrive at homogeneous zones. The criteria for arriving at these homogeneous areas vary from zone to zone. In some cases, such as the Entre Duoro e Minho Region, the division is purely on the basis of elevation and slope, in the Alentejo Region, it is on soil type, Region 5, which is the most complex, it is on the basis of a combination of these features. There are 45 zones as follows:
Regions Zones
1. Entre Duoro et Minho 3 2. Tras-os-Montes 6 3. Beira Litoral 10 4. Beira Interior 5 5. Ribotejo e Oeste 11 6. Alentejo 5 7. Algarve 5 Total 45
Exploitation of Agricultural Resources
11. Further discussion of how land is used and how it could be used is in other annexes. This paragraph provides estimates of land suited for agriculture and farm size. Climate and soil factors have not been alone in determining the agrarian qtructure as the present farming structure has been strongly influenced by historical and social factors. Historically northern Portugal with its mild humid climate and the long period of continual habitation is characterized by small, intensively operated family holdings which include a large proportion of the settled population. On the other hand, for southern Portugal with little or no summer rainfall, few substantial rivers and a history of invasions, settlement was difficult and this led to the development of large extensively operated farms. Reliable data will be available when the recent census analyzes are completed. Just before the agrarian reform program there were approximately 800,000 farms in Portugal, with 630,000 having less than 4 ha, of which 31,400 had less than one ha. By district, at that time the average farm size was as follows (ha):-
Viana do Castelo 1.53 Viseu 2.62 Castela Branco 9.20 Aveiro 1.92 Lisboa 3.62 Braganca 9.96 Porto 1.94 Vila Real 3.78 Setubal 16.71 Coimbra 2.09 Guarda 5.92 Portalegre 28.43 Braga 2.19 Santarem 6.34 Beja 35.77 Leiria 2.42 Faro 7.76 Evora 49.54 -6- ANNEX I Page 5 Table 1
Administrative Districts Agricultural Regions
Brags 1. Entre Duoro e Minho
Viana do Castelo Braga, Viana do Castelo, Porto
Porto parts of Vila Real, Aveiro, Viseu
Vila Real 2. Tras-os-Montes
Braganca Braganca
Aveiro Parts of Vila Real, Viseu, Guarda
Viseu 3. Beira Litoral
Coimbra Coimbra
Leira Parts of Aveiro, Viseu, Guarda, Leira
Guarda 4. Beira Interior
Castelo Branco Castelo Branco
Portalegre Parts of Guarda, Portalegre, Santarem
Santarem 5. Ribatejo e Oeste
Lisboa Lisboa
Setubal Parts of Leira, Santarem, Setubal
Beja 6. Alentejo
Evora Beja, Evora
Faro Parts of Portalegre, Sebutal
7. Algarve
Faro - 7-
PORTUGAL
AGRICULTURAL SECTOR SURVEY
A NEAR-TERMACTION PROGRANFOR AGRICULTURE
ANNEX2: FIELD CROPS AND CROPPING PATTERNS
I. CROPS AND CROPPING PATTERNS ...... 1
II. CROPPING SYSrEKS ...... 11
Production Systems for the Alentejo Region ...... 11 Production Systems in the Northwest ...... 13 Production Systems in the Public Irrigation Schemes *..e.g..eg....e..egegogsuOus. *Ose@SSSU, Il&
TII. RECOMMENDATIONS ...... is
APPENDIX I : Formet for Farm Production Systems Study APPENDIX II: Portugal's Farm Production Systems 8 - ANNEX 2
2170E/mld PORTUGAL
AGRICULTURALSECTOR SURVEY
FIELD CROPS AND CROPPING SYSTEMS
I. CROPS AND CROP OPTIONS
1. Wheat,maize and rye are the traditionalfield crops of Portugal. Each needs to be examinedseparately, but, it is also importantto look at crops that cover less area but are now gaining in importanceor might be importantin prenentor futurecropping systems. This Annex therefore examineseach of Portugal'scrops and then examinessome systemsof crop production. Table 1 shows the annual averagecrop areas planted in the most recentperiod for which data are available,1979-81, and an approximate percentagedistribution to show the regionalrelevance of these areas. All area, yields,production data are in Tables 9, 10, 11 in the statistical appendixto the main volume. The traditionalcropping patterns can be describedas follows:-
Maize is grown in an area extendingfrom the north and centralcoast inlandwhere there is a high densityor small farms of which most have supplementalirrigation.
Rye is planted in the poor soils of the northeasternpart of the country and in the area that extendsdown the eastern side of the country.
Althoughwheat area has reducedby 30-35Z in recentyears it has been grown largelyon the better soils of the Alentejoand Ribatejoregions where it is now largelyfound. The coarse grains barleyand oats taken togethercover a significantarea, predominantlyin the same fertilesoil zone as wheat. Wheat
2. Wheat remains a crop of importancein Portugaland at the same time it presents a dilemma. The downtrend in area planted followed dry years, abandonment of land for cropping in zone 4, and an effort to restrict wheat to soils for which it is more suited. The government in the recent improvement plan (Piano de Mundanca da Agricultura - PMA) proposes that wheat be grown only on 235,000ha of the best soils. The highest averageannual production for tnis area would be approximately650,000 tons, which falls short of the approximatelyone million tons estimatedas the country'sneed by 1990. This level of productionwould also requiremore consistentuse of improved productiontechniques. Considerationtherefore needs to be given to expanding,if possible,-he area of wheat plantedon soils that are not the best and also some under irrigationin order to push productioncloser to the milltionton target. PORTUGAL
CROP AREAS AND DISTRIBUTION (1978-81)
Annual Approximate Percentage Distribution by Zone Aver.agi 1 2 3 4 5 6 7 Crops ArLea Entre Tras-os- Beira Beira Ribatejo Alentejo Algarve (ha) Duoro e Montes Litoral Interior e Oeste M4inho
Winter, Rainfed Cereals Wheat 324,000 7 6 9 73 Rye 204,700 13 32 14 31 7 Oats 164, 700 7 13 71 Barley 75,100 7 12 61 9 1
Grain Legumes Broad beans 32,600 16 30 37 13 Chick peas 35,400 6 8 8 13 61
Oilseeds Sunflower 24,100 96
Summer, Irrigated Crops Rice 31,500 26 32 42 Maize 366,600 30 33 11 13 8 Dry beans /a 258,100 47 33 7 9
/a Treated as a vegetable for discussion in Annex 4.
Source: Mission
Date: July 1983 PORTUGAL
RAINFALLEFFECTS ON SOILS WITH DRAINAGEPROBLEMS (Rainfall in mm)
Beja Evora Elvas Sept.- May Cuwulative Wheat Sept.- May Cumulative Wheat Sept.- May Cumulative Wheat Rainfall Deficitor Yield Rainfall Deficitor Yield Rainfall Deficitor Yield (Mean 531) Surplus (Ton/ha) (Mean 631) Surplus (Ton/ha) (Mean 575) Surplus (Ton/ha) (961 Annual) (97X Annual) (95% Annual)
1970 450 - 81 - 577 - 54 - 461 -114 _ 1971 445 - 167 1.34 457 - 228 1.30 377 - 312 1.48 1972 481 - 217 1.33 545 - 314 1.09 528 - 359 1.18 1973 482 - 266 1.54 466 - 479 1.19 385 - 549 1.20 1974 500 - 297 1.21 459 - 651 1.20 367 - 757 1.40 1975 442 - 386 1.46 376 - 906 1.39 341 - 991 1.51 1976 726 + 195 1.38 717 + 86 1.26 578 + 3 1.51 1977 710 + 374 .89 820 + 275 .90 687 + 115 .96 1978 707 + 550 .75 819 + 463 .59 728 + 268 .73 1979 551 + 570 .83 473 + 305 1.04 495 +188 1.07 1980 1.26 1.31 1.30
Source:Misston
Dete: July 1983
tbw - 11 - ANNEX 2 Page 4
3. The major wheat growing areas (essentially Alentejo and areas of Ribatejo e Oeste) are well supplied with rainfall (550-700 mm) with essentially winter incidence, have reasonable soils (although drainage is a problem) and have gently rolling topography. Annex 1, para. 6, points out the extent of the drainage problem in the Alentejo region. Several components of the production package need to be considered to ensure consistently better yields: namely, seedbed preparation, choice of variety and seed quality, and fertilizer strategy. In addition, the place of wheat in the cropping system is a major issue in these regions and will affect the area cropped. Seedbed preparation is of major importance to allow for a reduction in the depth of cultivation, and the use of moisture conserving strategies, yet at the same time, to facilitate surface drainage. Instead of benefitting from above- average rainfall, wheat yields are generally depressed by it under the present cultural system as a conseq..>nceof this drainage problem (Table 2). While the effects of above-average rainfall may be manifested in several ways the net effect is to lower the yield although agricultural production systems should be capable of using this extra water with benefit. Land use systems can be developed to reverse this tendency and at the same time raise yields substantially.
4. Both durum and bread wheat are grown but a much greater area is devoted to bread wheat despite the fact that the fixed price of durum wheat is 3OZ-352, higher, depending on quality grade. Durum wheat is confined to areas of clay soils near Beja, south of Elvas and north of Lisbon. Plant improvement research for both species is in progress and satisfactory varieties now exist. Inadequate supply of good quality seed of the appropriate varieties is more of a problem than lack of varieties. This issue is addressed in the recommendation to include a seed production component in the wheat and livestock production project. However, because of the tendency for the growing season to conclude quickly, breeders need to match varieties carefully to the spring climatic conditions. Fertilizer strategies appear to be inefficient because standard recommendations 1/ are too broad. These should be refined with more extensive field response experiments and adapted to farm conditions. It appears that those who use fertilizer tend to use too much, especially of nitrogen. The question of crop rotation with wheat as the key course becomes a major one and is taken up separately (p3ra. 27). It is noteworthy that the three components of the wheat production package that have been singled out for special mention are all influenced by crop rotation.
5. Wheat production would become of special concern on Portugal's accession to the EEC since import prices would go up and subsidies would go down. Hence, there is a clear advantage to Portugal in growing as much wheat as it can, commensurate with optimal land use and having due respect for economic considerations at the farm level. In the Alentejo, Ribotejo e Oeste, and parts of the Beira regions, wheat should be planted on all class A and B soils as the key course in rotations which would normally consist of 3 courses. Mean yields of 3 - 3.5 tons/ha would be the goal. In the intermediate (C) soils, wheat should appear as the key course in 4 course rotations (mean yields of 2-2.5 tons). Subject to research, wheat should have a regular place in many of the irrigation schemes where winter temperatures are low and rainfall is moderate. Yields of 5 tons per hectare would then be possible if controlled supplementary irrigation is used. Under these conditions, production of wheat could be: l/ Guio Practico de Fertilizacoa, DGER 1980. - 12 - ANNEX 2 Page 5
ClassesA and B 120,000ha x 3 - 360,000 Class C 130,000ha x 2 - 260,000 Class D 100,000ha x 1.5 - 150,000 Irrigation 10,000 ha x 5 - 50,000 Total 820,000 tons This analysisof productionignores wheat as a secondarycrop in rotation, which is a possibility(para. 27).
Rye - Triticale
6. Cereal rye occupies approximately200,000 ha in the northeasternpart of the country, where it has developeda traditionalrole that has been clearlyjustified. Cereal rye has certain attributesthat farmers in this region exploit. These are its ability to grow in poorer soils and in colder conditionsthan the other winter cereals. It is able to germinateat low temperatures,grows even better than oats in cold conditions,has a low temperaturesummation requirement for moving throughthe physiologicalphases, and hence flowersearlier. Overall rye has better toleranceof unfavorable climatic conditionsand has the ability to use soil moisture supply through its vigorous and extensiveroot system,which also makes better use of residual fertility. It does not use nitrogen efficiently,however. Characteristicallycereal rye has a stable but low yield. For the region defined, the yield is on the order of 0.6-0.7 tons per ha. Cereal rye has potential for early grazing (before it becomes unpalatable). It is sometimes grazed and allowed to recover for grain, a practicewhich reduces grain yield severely. This practice does not appear to be common in Portugal and hence is not expectedto be a factor in the low mean yields. Approximatelyhalf of the rye grain goes into commerce and is used for bread.
7. The PMA expects that the same area will be retained,but it projects improvedyields of 1.7 to 2 tons per ha. These yields are possible under specialconditions but appear optimisticin this region of Portugal. No developmentwork is being undertaken.and it is doubtfulwhether such investmentwould be justified. Sourcesof improvedyield would be (a) improvementof varieties for increasedyield potential,disease tolerance,and nonshatteringcharacteristics; and (b) better cultural techniques. These are not likely to be very profitableareas of research. Generallyimproved field work which ensures better seed beds, cleaningand gradingof seed, and sound fertilizerrecommendations would enable farmers to make better use of the genetic potentialof the existingvarieties. Neither breeding programs for the characteristicsmentioned, nor extensive testingof introducedgenetic material is likely to be very rewarding. As cereal rye is a cross fertilized plant, when a variety has been growing in an area for a few years it will adapt itself to the local environmentby natural selectionof vigorous plants. Local strains are frequentlyas good for a local niche as named cultivars. A more profitableutilization of rye germ-plasmis in further developmentof Triticale,of which rye and wheat are the parents. 8. Triticale,the first man made cereal,has a short history and hence little genetic diversity. Already, testingof cultivarsin Portugal shows its potential. It has inheritedmany of rye's characteristicsof being able to withstandharsh conditionsand to grow well in poor soils. Development programsat the Plant ImprovementStation of the National Instituteof AgriculturalResearch and Extension (INIAER)in Elvas, and at the University of Tras-os-Montesand Alto Duoro in Vila Real are studying triticale. Its yield potentialshould easily be 2 tons or more per hectare in the harsher areas of the northeasternpart of the country,where cereal rye now grows. - 13- ANNEX 2 Page 6
Yields of 4-5 tons (better than wheat yields) have been obtained on the good soils of Elvas. Its bread making characterictics are as good as cereal rye, although it is better used in cakes and unleavened products. As an animal feed, it has an average value better than cereal rye and equal to maize, a better protein-energy ratio than most feedgrains and an equally satisfactory digestibility of carbohydrate and protein. These characteristics make it useful in pig and poultry feeds. Gradually, Triticale should reptace cereal rye in the northeastern region.
Barley and Oats
9. The coarse grain cereals (barley and oats) require little comment except to define their place in crop rotations (para. 27) with the object of increasing the area as much as possible and ensuring that yields increase. The low yields shown in available data (namely, oats 0.5 tons per ha, barley 0.6 tons per ha) are misleading since an indeterminate amount of planted area is cut for forage or is grazed and hence is not harvested for grain. In the barley area, approximately 50,000 ha are planted under contract for malting purposes. This planting is always 2 row type barley and improved varieties are available. This area requirement for malting will remain at between 50,000 ha and 60,000 ha. In order to ensure the best malting quality it will be preferable to grow barley in this area as a secondary cereal, that is, following wheat in the rotation. The remainder of the barley crop is 6-row type and is based on the old Californian variety Arivat. There is pleaty of scope to use improved varieties and there is a great deal of scope for coarse grain production to reduce feedgrain imports. When-grain alone is the objective, barley should be preferred over oats but when forage or dual purpose use is likely, then oats should be considered. Field research only, is justified for these two, in view of their secondary nature, but serious efforts are needed to adapt the extensive research work being done outside of Portugal.
Maize
10. Maize has two important roles in Portuguese agriculture, but these are not necessarily closely linked. One is its role as a raw material in the mixed animal feed industry. The following summary for the period 1980-82 (1982 numbers are estimates) shows the relative use of these raw materials.
(Metric tons) Total cereals 2,240,700 (Maize 2,028,800) Oilseed meals 715,800 By-products 290,900 Other materials 214,800 Total 3,462,200
Maize is 91% of the total cereal component and 59% of the total raw material. The 2 million metric tons of maize used for animal feed should be compared with the 430,000 tons average annual production for the same period, the 250,000 tons required for nonanimal feed purposes and the 2.3 million tons imported. Without doubt, maize is a satisfactory carbohydrate source in concentrated mixed feeds, but it is not the only source. It finds itself in this position because of price and availability and could be partly replaced if this situation changed, just as the total amount of concentrate used could be reduced if other sources of nutrition were found for ruminant anilmals. - 14 - ANNEX 2 Page 7
11. The other important role for maize is as a crop in the northwestern part of the country (pars. 1). Maize has assumed a traditional role as a suimer growing cereal since it is able to exploit the carry over soil moisture in this area of high rainfall and long growing season, and the widespread traditional supplemental irrigation. Maize also has an established use for human food and animal feed, especially for direct animal feeding and conservation. The downtrend in area planted in recent years has been due to abaudonment of certain rainfed areas and those difficult to cultivate because of their topography. This has been accompanied by an increase in mean yields, which are attributed to better fertilizer use and an increasing use of hybrid varieties.
12. There is pressure to confine maize to approximately 233,000 ha (35% reduction in area) to allow it to be grown only on the better soils and only where full season irrigation is available. There is also pressure to produce as much as possible to reduce maize imports. Properly handled this reduced area could produce around one million tons. A third pressure, by the farmers, is to use an increasing proportion of the crop for forage or silage instead of holding it as grain for winter feeding. The rationalization of these pressures will depend on both technical and economic issues.
13. Dairy production is the main outcome of the national maize production, with plant mixtures of cereal and fodder being used in the winter, but curtailed in time to plant maize in the late sprin2. The maize is harvested as silage or grain. From an animal management standpoint, the two processes should be integrated. Reduction of the area to avoid those with topography problems is reasonable, but exclusion of areas that have less water than is required to complete the crop is open to question. These areas often have enough water to grow the crop through the first part of its vegetative cycle but not the 7000-9000 m3 per ha (which includes the soil accumulation from rainfall) to complete it. Under these circumstances, consideration should be given to using the available water to produce good early vegetative growth for feeding to animals.
14. Several aspects of the agronomy of maize production require attention if the regional yields are to be raised from a little over a ton per ha to at least 4 tons per ha. Variety is an extremely important characteristic. Maize is a cross-pollinated plant, and the old open-pollinated varieties produce very variable populations. Yield is a genetically complex character in maize and in in-bred lines deleterious yield genes show their effects. Crossing in various combination masks these deleterous genes so that hybrid varieties have a much greater yield potential. The use of hybrids is increasing but at present hybrid plantings cover only around 40,000 ha. Of these only about 4,000 ha are planted to single hybrids and the rest to doubles. Single hybrids, if all the right inputs are used, yield up to 12 tons per hectare but the seed is very expensive, compared with the double hybrids that are lower yielding. Taking the crop as a single entity, the high price of seed is warranted but other considerations (para. 30) need to be taken into account. Presently, there are a wide range of national and internationalhybrids being marketed, and it is clear that extensive testing and more precise recommendations are required. Plant density is a precise requirement in Maize culture, since the maize plant cannot compensate for loss of plant population as the winter cereals do. Hence, uniform establishment and optimum density are important. Maize does not tolerate weed competition well so, by inference it is important to reconsider the strategy of growing dry beans between the rows and planting the winter rye grass late in the growth cycle to have it - 15- ANNEX 2 Page 8 well advanced before the cold weather arrives. This double cropping vould reduce maize yield but not necessarily the overall productivityof the land. Fertilizationand soil correction strategieshave a tremendous impact on yield. Maize has an optimum soil pH range of 6.2-6.5, while all of these soils are less than 6 and many less than 5.5. Experimentshave shown that lime applicationsaccompanied by other inputs significantlyincrease yield. It is difficult to attribute yield increases to any one element on the basis of the limited data, but adequate nitrogen and particularlyphosphorus, with lime, is necessary to make best use of the soil and water resources, since around 28 kg N and 10 kg P205 are required for each ton of Rrain produced. High yields require high levels of these nutrients. A great deal of emphasis is given to the issue of the small parcel size of the small and fragmented farms because it restricts mechanizationand hence yield improvement. There is little evidence that this factor directly affects maize yields.
15. Maize is grown in an intricate farming system on the small traditional dairy farms (para. 31). It is necessary to look at its culture through the whole farm approach. On the larger farms the crop itself can be considered more in isolation and the higher levels of technology can be applied more easily than on the smaller farms. The most important issue is for government planners to regard maize in the context of the farming systems in which it is grown rather as a means of reducing the present importationof maize grain.
Rice
16. Little need be discuosed about rice. Its culture is confined to certain irrigatedareas that are reasonably well utilized. Yields are moderately good in the southern part of the country where the main areas are located; in 9 of the last 15 years yields have been between 4.5 and 5 tons per ha. Yields of the 8,500 ha in the northern part of the country, where the majority is in the Mondego Valley, have been closer to 3 tons per ha. The government'sintention is to raise production to cover the national need, which is between 225,000 and 250,000 tons annually. This would have to be achieved by both increases in yield and increases in area. The goal is a yield of 5 tons per ha, which is possible with modest efforts in better water management,greater use of good quality seed of recommendedvarieties and some attention to fertilizer strategy. However, the area planted in rice needs to be increased. Taking into account that the northern rice area will reduce to around 6,000 ha, the southern rice area will need to be expanded to approximately37,000-39,000 ha. This is projected to be available downstream in valleys of the Tagus and Sorraia Rivers.
Oilseed Crops
17. At the beginning of the 1970s, Portugal planted more than 25,000 ha of safflower and 2,000 ha of sunflowers. In the decade following, the position of predominancereversed to arrive at a mean annual area (Table V) of 31,500 ha of sunflowers and an insignificantarea of safflower. The latter will disappear, as it has done in many countries because safflower is a winter crop with many agronomic problems and cannot compete with the winter cereals for ease of production and profitability.
18. Sunflower is a summer crop and is grown in two separate locations with quite different methods and expectations. On the alluvial soils of the Tagus valley, sunflower is grown on a few hundred hectares as an irrigated crop - 16- ANNEX 2 Page 9 in the same manner as maize, but using less water. Yields average from 1.5 to 2 tons per ha. The greater area planted in sunflowersis in the Alentejo region on the deeper soils such as those where durus wheat (para. 4) is the key crop. It fits snugly into the rotation in the followingmanner. Cultivation of wheat land begins in January with deep plowing, subsequent leveling,and follow-up shallow cultivations. Sunflower is planted into this fallow between mid March and mid May as a cash crop to compensate for the cost of land preparation. The sunflower crop receives no irrigationand is harvested by September in time for a shallow cultivation to precede planting the wheat crop (para. 27). Yields vary according to the amount of soil moisture and are in the order of 0.7 ton per ha. Several commercial considerationsmake growing sunflowers in this system worthwhile. Crop budget analyses show it to be profitable,and input costs for the sunflower crop reduce those for the followingwheat crop. At the same time available soil moisture that may have been conserved by the fallow is used up but without research there is no way of knowing whether this is important. The crop calendar is probably optimum for the region. Sunfloweroil quality is best when there are cool moist conditions after flowering so extension of the crop season into the autumn is desirable. The rotation itself is a problem that is taken up in paragraph 27, but if it is to be continued some actions can be taken to stabilize the yields of sunflower seeds. A soil preparation strateRy is necessary to reduce the depth of the initial cultivationand to pay careful attention to moisture conservation. Fertilizer that includes a phophorus applicationsplit between the sunflower and the wheat, and a carefully calculated amount of nitrogen is important. Plant density is important as low populationsresult in larger heads with seeds that are slow to ripen and difficult to harvest.
19. Soybeans as a crop for Portugal seems to have no particular relevance, although the fact that it is a legume could give it a place in some cropping systems. However, it is a summer grower. It requires a 110-140 day growing period, according to the cultivar chosen. However, it would be a straight competitor for irrigationwater with maize so that other considerationswould decide whether it should be grown. The EEC is not self-sufficientin oilseeds and they can be imported without duty or levy. Since Portugal has developed a good trade in importing soybean, crushing it, using the meal and selling the oil (including export), there seems little point in adding another crop to the long list, and a lot of advantage in keeping up the import. If the nitrogen-fixingcharacteristic needed to be exploited,growing soybean crops would present no problem since they could be grown using cereal crop equipment and marketed through the well established channels of the Oil and Oilseeds Institute - IAPO. The area planted in soybeans would for the present be confined to the alluvial valley soils.
Sugar Beet
20. Sugar beet has not been grown in Portugal, except experimentally, since raw cane sugar has been imported for refining. PortuRal has limited areas well suited for both irrigatedand rainfed sugar beet: irrigated and rainfed areas in the valleys of the Tagus and the Sorraia, the valleys of Mondego and the Vouga, the central plains of Beira Alto, and certain irrigated zones in the Alentejo region. The Tagus valley is of first priority because of its favorable farm structures. Agronomically,sugar beet is a good crop and almost always profitable. The following technical elements are significant. It is a crop with a long growing season. The normal crop calendar calls for planting in October -November and harvest in the summer and as late as August - 17- ANNEX2 Pase 10 in more northerly latitudes. It thereforedoes not permit double cropping but is a good crop to precede winter cereals in a rotation. It can be planted in the spring and harvested in autumn,but such practice is less common and more difficult. A side benefit is that beet pulp and beet tops are important livestockfodders. The sugar beet issue is such a complicatedone because of the sugar surplus in the EEC that it will finally be decided on nontechnical grounds. If it is prudent to develop the crop in Portugal,it should be understoodthat productionneeds to match refiningcapacity. Building up the crop to this capacity would take time to sensitizefarmers and putting seeds and machinery in place. Lupins
21. Lupins are known in Portugal because at least three species have existed in semi-domesticatedor wild forms for centuries. Except for minor uses, their potentialhas not been developedeven though the crop has been recognized in preparing the PMA. Lupins are frequentlyassociated with the colonizingof poor soils. Characteristicallythey grow on coarse - textured well-drainedacid soils, although there are distinct preference8among species. The yellow lupin, which grows wild in Portugal,adapts well to strongly acid to mildly acid soils and will toleratehigh aluminium levels. The narrow-leavedlupin, also found in Portugal, grows best on moderatelyacid to neutral soils, and the white lupin, which is used to a limitedextent in Portugal,grows on mildly acid to slightly calcareoussoils. Lupins are legumes and hence can fix atmosphericnitrogen to improve soil fertility. Beyond their potential for soil improvement,they have considerablepotential for animal feeding,now that alkaloid-free(nonbitter) varieties are available and now that the animal disease called lupinosisis better understood.
22. The estimate of potentialarea in the PMA of 500,000ha per year is perhaps optimistic. Nonetheless,a considerableportion of the Class C and some Class D soils, particularlythose of course texture, could adapt well to lupin crops in a cereal-lupinrotation. A typicalarea would be the Charnaca subzone in the Ribatejo e Oeste region.
Annual Forage Legumes
23. The main annual forage legume of significancefor Portugal is subterraneanclover. Its potential is well recognized,and research has been going on for a number of years at the plant improvementstation in Elvas. Presently there are estimated to be 20,000 ha of subterraneanclover-based pastures, all in the Alentejo region,while in that same region there are one million hectares available for improvedpastures. Cropping systemsbased on subterraneanclover in close rotationwith winter cereals should be the basis of productionsystems on 600,000 ha, while subterraneanclover should be the foundationfor longer-termpasture on another 500,000 hectares. The significanceof subterraneanclover is its pivotal role in the integrationof livestockproduction with crop production. The pasture phases of the rotation build soil fertility,as vell as providing fodder far in excess of that naturallyavailable, and it is self-regeneratingif properly managed. This is taken up in the discussionof cropping systems in paragraph27.
24. Subterraneanclover is not the only annual forage legume that will find a place in Portugal. Serradella,Medicago 8p, and Persian clover will have limitedapplications as well as the perennials,white and strawberry clovers and lucerne. All these others are of limited significance,compared with subterraneanclover simply on account of the ecology of the Alentejo region. The question is why then the developmentof subterraneanclover in -18- .ANNEX 2 Page 11 the Alentejo region is so slow. One reason has to do with nontechnicalissues involving land tenure. From the technical standpoint,there are some unresolved issues as well. There are two of prime importance. The first concerns varieties. Too much emphasis has been placed on late maturing cultivars,probably because of the meen annual rainfall of the region. Rainfall and length of growing season are frequentlycorrelated, but in this case dry spring conditionsare much more comon than the rainfall figures would indicate. Rainfall alone is a poor guide to varieties. Under the poor spring conditions the cultivarsbeing used set little (or no) seed and bury very little of it, and the seed has a low percentage of hard seededness. The test of fitness of annual forage species of this sort is the ability to set large quantities of seed of appropriatecharacteristics. For the Alentejo region it will be essential to use mixtures of three or four earlier maturing cultivars to fit the varying situationsin respect to the steepnessand direction of slope, depth of soil and soil characteristicswhich result in varying soil moisture regimes. Suitable cultivars are, however, available. The second problem is the general lack of research effort to learn how to, and to demonstrateto the farmers hov to, fit the components of the new land use system together. The important factor is management of the subterranean clover pastures and the cereal crops. All of the factors necessary for managing the system properly have been studied extensivelyelsewhere, and the hypothesesto be tested are easily constructed.
CROPPINGSYSTEMS
25. As vell as looking at crops in isolation,it is important, particularlyin a country like Portugal where crops are grown in many combinations,to look at themwin the context of the whole farm operation;that is, from a farming systems perspective. A true farming system approach would involve the total environment in which the farm family operates, including both technicaland human (exogenousand endogenous)elements. This requires detailed study of what is happening at the present time, but this has not yet been done. This report can thereforedeal only with farming systems subjectively. Annex 1 outlines the immenseheterogeneity in Portuguese agricultureand lists subzones within the seven agriculturalregions, each of which has several common farming systems. Extensive proposalsfor future crop and livestockproduction system'are made in the PHA, but these are more based on the intuitionof local agriculturaltechnicians and obvious national goals rather than on an understandingof the farmers' resourcesand ambitions. It is proposed in this Annex to refer to three agriculturalsituations to illustratethe importanceof understandingthese farm level interactionsas a basis for planning.
ProductionSystems for the Alentejo Region
26. Any discussion of Alentejo region productionsystems should ignore the question of irrigation(present or future)and accept the Alentejo reRion for what it is: namely, a typical winter rainfall,rainfed cereal and livestockregion. For the moment it should disregard the changing and uncertain land tenure situationand assume two significantfarm categories: (a) 370 units cooperativelymanaged and averaging 1,000 ha in size; and (b) medium-size,private farms averaging 30 ha in size. The reRion has approximately1.9 million ha of arable land. The remainderoutside of the approximately43,000 ha in irrigationschemes, falls into eight land capability classes ranging from high potential for intensivecropping to very low potential and of minor usefulness for extensive grazing. Individual farms mostly have a range of classes. The approximateareas are as follows: - 19 - ANNEX 2 Page 12
Class A highest potential 98,800ha Class B moderate to high potential 206,200ha Class C1 best soils in class 87,500ha Class C2 secondarysoils 204,100ha Class C3 under trees 80,000ha Class DI better soils in class 36,000ha Class D2 remainder 446,700ha 1/ Class E lowestpotential 706,600ha T/
1/ Much of this is under sparse oak forest.
27. With few exceptions,there is littlecomplication caused by tradition. Althoughhuman elementsaffect decisionmaking, the impactof technicalelements is much greater. Besidesvineyards and vegetables,which are treatedas separateindustries, production mainly focuseson wheat while livestock,coarse grains,oilseeds, and olives are relativelysecondary. Farmersusually carry on severalinterrelated (but not integrated)activities so that clear-cuttechnological opportunities exist to develop integrated productionsystems which would greatlyenhance productionof the same products. Two main productionpatterns can be found. For the good soils (A and B) farmersare followinga very exploitiverotation of wheat,barley, and sunflowerin the fallow. This is dangerousin two major regards. First, it does not includea phase for restoringsoil fertility. Bare fallowmight be regardedas such, but it is being plantedto sunflower(para. 18), and thus any mobilizednutrients are used up. The constantcultivation, with no return of organicmatter, will continueto have seriousimplications, particularly for physicalfertility. There is littleopportunity to controlroot borne cerealdiseases. Second,the farmersuse deep plowing,which is incorrectly believedto be a moisture retentiontechnique but this can only worsen soil fertilityand the drainageproblems. In the intermediateland-use classes (C and D) the rotationconsists of wheat, oats and three or more years of fallow (land left idle, occasionallyfertilized, and spontaneousgrowth that is grazed). This is a less exploitiverotation and associateslivestock raising to a greaterextent, but is not particularlyproductive. In this region, as in many similarecological regions, the relationshipbetween sheep numbersand crop area is strikingeven when there has been no attempt to integratethe two, since livestocknumbers are usually determinedby the extent of crop residues. 28. The crop rotationsystem that would appear to be the most logicaland that would give most opportunity.foron-farm decision-making, as well as the flexibilityto move quickly from one commodityto anotherbut continueto integratelivestock and wheat as the major commodityobjectives, would be as follows: - 20 - ANNEX2 Page 13
Best soils: (A) Wheat, secondarycereal, grain letume (34,000ha) (33,000ha) (33,000ha) 100,000ha
(B) Wheat, secondarycereal, 2 years of sub. clover based pasture 1/ (62,500 ha) (62,500ha) (125,000ha) 2/ 250,000ha
Intermediate: soils (C) Wheat, 3 years sub. clover 1/ based pastures (90,000ha) (270,000ha) 360,000ha
Low class: soils (D) Wheat, Cereal - 5 years sub. clover 11 based pastures (80,000ha) (400,000ha) 480,000 ha
1/ Subterraneanclover's role in soil fertilityrestoration and livetock- crop integration is discussed in para. 23. 2/ Sunflovergrown as a cash crop in the short fallow being prepared for wheat can be built in this rotation on a limitedarea according to soil type.
29. This set of rotations allows for a high intensityof cultivationon the beat soils vith a measure of soil fertilityrestoration which is now missing, and with an increasinglength of the pasture phase as the potential of the land declines. This implies that livestockcan be involvedonly to the extent of the available crop residues .n the 'Jestsoils, but would be self-containedin any of the other rot4tions- Reference is made in each pasture phase to subterraneanclover which should be the most importantannual forage legume but as was pointed out in para. 24, there are limited areas where other forage legumesmight be superior. The method of management and the purpose do not change. The virtue of flexibilityto shorten or extend the rotation or to change crops easily remains. This flexibilityis significant. The second phase in the first two rotations is labelled "secondarycereal", which say be barley, oats, wheat, or a cereal based fodder crop to suit the particular farm need or economic pressure. Clearly 50,000-60,000ha in the region will be malting barley to respond to the demands of the brewing industry. The other needs vill be decided by similar market pressures.
Production Systems for the NorthWest
30. By contrast with the situation in the Alentejo region where there are large comuercial farms with no definite patterns of productionand many opportunitiesto intensifyand integrateproduction of commodities,the reverse situation is seen in the northwesternpart of the country which includesthe less mountainousparts of the agriculturalregions of Entre Duoro e Minho and Beira Litoral. Farms are small (averaging2 ha), there is a long traditionof farmingand comitment to dairy production,and there are distinct production systems that show a good degree of integrationand intensity. Consequently,there is much less opportunityto manipulate the system. Researchersand planners need to take account of human elements to a much greater extent. - 21 - Traditionalsystems on small farms and the few larger farms are based on maize in the summerand green foragein the winter. The majorityof farms have access to water for supplementalirrigation. Frequentlythis water runs throughoutthe winter and is spread on the pasture or foragecrop to keep the temperatureabove freezing. The farmingsystems approach to researchand developmentneeds to be appliedvery carefullyand, in this context,should start with a carefuldescription of what the farmer is doing and why. 31. All of the potentialsthat are proposed in the PMA are purely speculative,based on rationalizingproduction of individualcrops and taking no account of interactionsbetween enterprises. The factorsrestricting productionfrequently have a basis in tradition. For example,farmers prefer white grainedmaize if they use it for bread, plant density in maize is arrangedto allow for intercroppingwith beans and undersowingrye grass or cereal for the winter. Change factorscan surelybe introduced,but not without the heavy involvemencof the farmer in the researchprocess, as well as interactionbetween the social scientistand the biologicalscientist.
32. The small traditionalfarm system,based on maize in the summerand fodder in the winter, is intricateand representsintensive use of natural resources. The climate is relativelymild for an area with such high rainfall. Double croppingannually and almost 200% land use is practiced. Many of the grapes grown for green wine are grown on these farms usuallyas borders. Areas in potatoesare small enough so as not to competewith the dairy operationand some vegetablesare grown for home consumption. As long as this size of farm persistsit is difficultto see more than minor chantes in the productionsystems. The larger farms in the same areas have greater scope for change even though they too have an extroordinarilyhigh degree of land use. The largerfarms are more heavily involvedin using subsidized concentratefeeds for their cows and herd size is consequently disproportionateto farm size. Althoughthis practiceis not wrong in the presenteconomic climate, research and developmentin respectof this farming system is urgent to prepare for the point when the subsidyon concentratefeed disappears. The proposalsfor maintainingherds of a minimum size of at least 12 cows, based on some Europeanmodel, in order to create an efficientdairy industryappears to have no logic as a startingpoint for developingan active agriculturein the area. This region is one in which the farmingsystems approachto researchand developmentis most pertinent. It shouldbe preceded by carefulcompilation of informationon what is currentlyhappening and why. This is necessarybefore any seriousplanning can be undertaken. ProductionSystem, for Public IrrigationSchemes
33. Problemsin public irrigationschemes are describedin a separate Annex mainly from an engineeringpoint of view. The general issue of their unsuitabilityin some cases for intensiveagriculture because of lack of foresightin planning is vell known. Another importantissue is the extent to which particularschemes are specializingin particularcrops. For example, the percentageof area planted to tomatoesis as high *a 88% in the Roxo scheme. By contrast,the Mira schemewith 6% tomatoesis being developed largely for irrigatedpastures for livestock. Such crop concentrationis dangerousfrom severalpoints of view. In the case of tomatoes,for example, the obviousbuild up of soil borne pathogens(nematodes) bas reducedyield. Also dangerous is the vulnerabilityof farm incomeand cash flow when there is - 22 - ANNEX 2 Page 15 an exclusiveand perishableproduct. Thirdly,such productionbiases rarely optimizethe output from the land. It is importantto combine severalhiRh returncrops, particularlyhorticultural crops, in agronomicallysound rotations.
34. In the specificcase of these public irrigationschemes, no research data have been producedon the basis of which crop optionscan be compared, but developmentof an hypothesisfor testingis easy because there are not many options. This is requiredas an initialstep in a long-termfarm systems researchprogram. Without it the Alentejo and southernBeira Interiorschemes cannotbe rehabilitated,nor is any furtherexpansion in this region justified.
III. RECOMMENDATIONS 35. It must be recognizedthat Portugal,because of its small size and limitedareas of good soil (ratherthan climaticconstraints or farm size limitations)has a very limitedcapacity to produce field crops. Areas are likelyto be less than in the past rather than more when price and subsidies are rationalizedand the marginalareas come to be used in wider rotations wich increasedlivestock. In general terms increasingthe area of one crop vill result in a decreasein another. Becauseof demands for wheat for human consumptionand feedgrainsfor livestock,strategies to maximize their productionare the main focus. 36. In anticipationof Portugal'saccession to the EEC it is clear that priorityshould be given to increasingwheat production. Strategiesare discussedin paragraphs2 to 5 above. As this depends to some extent on establishingan effectiveresearch organization the action proRrammust be an integralpart of any proposalto reorganizeand strengthenresearch. In view of its urgency initialsteps shouldbe taken as sooa as possibleto set up field developmentprograms for wheat.
37. Second in importauceto wheat productionis the productionof feed grains. The case is made in this and other Annexes to reduce Portugal's dependenceon feedgrain,particularly to change the feedingof ruminant animals by takingadvantagc of their innatephysiology and maximizingthe use of forageand foddercrops. None the less, Portugalwill remaindeficient in feedgrainsso that maize, barley,and oat productionshould be emphasized. Technologicalopportunities exist to improvethe yield of each of these cereal crops significantly. 38. Portugal'sclimate and land capabilitycombination allow the productionat a high level of two annual forage legumes-- namely, subterraneanclover and lupin-- which have strong soil fertilityrestoration capabilitiesas well as the capacityto producevery substantialamounts of animal feed. Using these plants effectivelyas the basis of croppinRsystems, as has been done in similarenvironments (40 millionha in Australia)can bring about the most dramaticproduction increase that can be envisagedfor Portugal.
39. Portugal stands to gain more than an average benefit from applying the farmingsystems approach to agriculturaldevelopment at the farm level becauseof the diversityof productionopportunities and the physicalneed to rotatecrops and integratelivestock. The lack of definitionof the existing systemsprevents imoediate application of this approachand planninRgroups need to be guided in the developmentof these definitions(Appendix 1). ANNEX 2 - 23 - Appendix 1 Page 1 PORTUGAL
AGRICULTURALSECTOR SURVEY
FORMATFOR FARM PRODUCTIONSYSTEMS STUDY
I. INTRODUCTION
1. The farming s7stems approach to research and planning requires an understanding of both technical and human elements. The format for obtaining this information should be developed in the field. What is presented here could be a basis for this development. Below is a list of statistical data and other information required to define the farming systems of Portugal. It is necessary to record the sources of data and information, and particularly, to indicate which data have been derived from the 1979 Census. A summary of the required information (not all of which may be available) follows:
(a) For each of the seven agricultural regions.
Ci) name the region and list the administrative districts which are included in it;
(ii) prepare a brief statement giving the reasons for grouping;
(iii) prepare a brief statement on the physical characteristics of the region discussing geographical location, elevation, climate, and natural vegetation;
(iv) prepare a brief statement on land use capability based on land classification and climate;
.v) prepare a table of land tenure, using information from section 5 of the 1979 Census;
(vi) assemble socioeconomic data on nt'mbersand types of farmers, and on numbers of farms according to farm and herd size;
(vii) indicate the type and location of agricultural services;
(viii) list the farming systems, both major and minor, and indicate where the individual system fits into the region.
(b) For each individual major farming system within a region:
(i) list principal activities: for example, wheat, milk;
(ii) describe crop rotation by year and percentage of arable area;
(iii) list permanent crops; pasture, fruit trees, forest trees;
(iv) list the areas of non-arable land;
(v) describe the main reasons for (i), (ii), (iii) and (iv); ANNEX 2
- 24 - Appendix 1 Page 2
(vi) note areas irrigated and type of irrigation;
(vii) note mechanization: power source and type of equipment;
(viii) list uses of inputs such as fertilizer, selected seed and chemical plant protection;
(ix) list labor used in terms of family, permanent, temporary, special;
(x) indicate crop calendar for each crop, and water use when irrigation is applied;
(xi) give yields of crop products;
(xii) list uses of products for home consumption, sale, or reconversion on the farm;
(xiii) describe opportunities for agricultural improvement according to product or in time.
(c) For livestock at the regional and farm level:
ii) list livestock distribution according to farm size;
(ii) list input and output prices;
(iii) give herd composition;
(iv) list technical coefficients;
Cv) give sources of animal feed;
(vi) describe use of products.
Formats for recordIingthe statistical data and other information are attached. There is some overlap between crop and livestock data to facilitate subsequent handling. - 25 - ANNEX2 PORTUGAL Appendix 2 Page 1 AGRICULTURALSECTOR SURVEY
FIELD CROPS AND CROPPING SYSTEMS
Farming Systems Approach
1. Reference is made in pare. 25 to the need to look at crop production in the context of the whole farm operation, that is, from a farming systems point of view. This approach recognizes that the system of production that a farm family will adopt will combine within the limit of their managerial skills, their available land, labor and capital to produce crop or animal products, or to pursue some activities off the farm, in order to try to meet objectives which they have set. The smaller the farm the more overlap there is between production and consumption.
2. The approach takes into ac=ount the family that operates the farm, as well as the farm. The system of production that can be undertaken is determined by the total environment of the farm and the family. The total environment embodies technical and human elements, many of which can be changed and some which cannot. The technical environment can be seen as three elements, namely: (a) the natural environment which includes the soil, topography, climate, water supply; (b) the biological environment which includes plant and animal species compatible with the location and their pests and diseases; (c) the cultural environment over which the farmer has control such as time and rate of planting, fertilizer strategy etc. The human elements are usually divided into external and internal. External factors concern the general social milieu in which the farm operates and includes such things as social customs and traditions, distance and accessibility, and support services. The internal human factors include labor, capital and managerial skill. The interaction of, and the opportunities to supplement these, are obvious.
3. The bottom to top approach is especially relevant in research and gives rise to the so-called farming systems approach to research. It is equally as relevant in agricultural planaing. It is always assumed that the primary aim is to increase overall productivity and hopefully the well being of the farm family as a result, within the framework of the factors that go to define the existing production system. Growing interest in this general approach is brought about to avoid some of the failures that have resulted from other approaches.
4. There are several dimensions which are easily overlooked without a whole farm approach. The first is purely technical and very significant. It concerns the integration of enterprises to get greater total productivity, long term stability of yields and greater flexibility to emphasize or de-emphasize an enterprise without serious disruption. This involves, (a) rotation benefits of soil fertility restoration, and disease and weed management; (b) carry over effects of fertilization; and (c) soil water management. From the socio-economic standpoint there are opportunities to increase the exploitation of resources particularly labor. The third dimension has to do with the aspirations and motivations of the farmer who do have preferences for particular enterprises, noticeable in mixed farming situations particularly where crops and livestock are produced on the same farm. ANNEX 2 - 26 - Appendix 2 Page 2
5. The farming systems approach to research is extremely relevant in Portugal with the diversity of farms of production. It is imperative to have farmers' inputs at two levels, namely, in defining the research priorities and in fine-tuning the results. Research conducted in this manner will make extension feasible and easier. This does not preclude or compete with more upstream research which is still important for development. It simply recognizes that the latter is complementary and does not produce results for iumediate adoption.
6. Likewise this approach does not preclude the development of national production goals. It simply implies that in reality the national goals be developed having in mind the limitations at the farm level. ANNEX 2 - 27 - Appendix 2 Page 3 PORTUGAL'S FARM PRODUCTION SYSTEMS
I. REGIONAL LEVEL
l. Nameof Region: ......
2. Tk.eadministrative districts included in the region are:......
...... 3. This group of districts forms a logical region because (for example, physical features, social structures, land tenure, land use capability, market opportunities, etc.):
4. Land Use Capability
The total surface area of the region is approximately ...... o... ha. (divide this total on a percentage basis into land-use capability classes using land classification, climate and soil erosion potential as presented in the guidelines following this section).
Percentage of Total Surface
Climate Categories /a Category I Category 2 Category 3
lass I
II
IV
V
VI
VII
.VIIIll
/a Climate may need one or more columns to distinguish between rainfall, or temperature regimes or a combination of the two. ANNEX 2 -28- Appendix 2 Page 4 5. Land Tenure
This region has approximately ...... farm families
Type of ownership /1 Area (ha)Z
Private farmer Share farmer Production cooperatives Collective farm Cooperative company Common land (baldios) State or public company Other Total Agricultural Land Non-agricultural
/1 As in agricultural census form, para. 5.
6. Farm Size Distribution
Number Area Size of Farm (ha) No. Total ha X
Less than 0.5 0.5 - 1
1- 2
2- 5
10- 20
20- 50
50- 100
100 - 200
200 - 500
Greater than 500
Total ANNEX 2 - 29 - Appendix 2 7. Land Use on a Regional Basis Page 5
Area in hectares Rainfed Irrigated Total %
Land in Rotation
Cereals
Grain Legumes
Oilseed
Vegetables
Forage
Fodder
Fallow
Sub-total
Permanent Crops
Forest
Orchard
Pasture.so8W
Pasture natural
Sub-total
Nonarable
Total ANNEX2 - 30 - Appendix 2 Page 6 8. Prices of Outputs at Farm Gate (1983)
--- Range… Product Mean High Low
I
t
IF II ANNEX 2 - 31 - Apniddix 2 Page 7 9. PhysicalCharacteristics of the Region (Geographicallocation, elevation, climate, natural vegetation)
10. AgriculttiralServices
Major Credit Sources
Seed Production Centers
Fertilizer Wholesale Outlets
Extens ion
Research
11. Farming Systems
List the major and minor farmingsystems in the regionand indicate where (geographically)each fits into the regions. For example: (1) small farm, irrigatedvegetables - milk; upstreamriver valleys; (2) large farm) fallow-fieldcrops - sheep;central plains. ANNEX 2 - 32 - Appendix2 Page 8
LAND CLASSIFICATION AS BASIS OF LAND USE CAPABILITY
GeneralGuidelines
Suitablefor Annual Crops
Class I Slopes less than 1%; no soil conservationmethod required.
Class II Land with slopes from 2-9X; contourcultivation using permanent markers,with occasionalwidely slopedearth banks as necessary along with improvedagronomy.
Class III Land with slopes from 10-25Z;closely spacedearth banks, gully control,water disposalareas, contourcultivation and improved agronomy. Suitablefor PerennialCrops
Class IV Flat or nearly flat land, where surfacerock exceeds 50% of surface;requires no specialconservation method. Class V Slopes 16-25% requiringintensive and strictconservation practicewith eitherterraces for tree crops or permanent carefullygrazed pasture.
Suitablefor Forestry Class VI Slopes greaterthan 25% and adequaterainfall, requiring intensivesoil conservationpractices before planting. Suitablefor Grazing Only
Class VII Low rainfallor steep (similarto ClassVI) land where forage productionis encouragedby low cost techniquesthat do not requirecultivation and where grazingis strictlycontrolled. Not Suitablefor Agriculture,Horticulture, or Fnrestry
Class VIII Roadsides,creek beds, villages,etc. ANNEX 2 - 33 - ippend;x2 Page 9 II. DESCRIPTION OF MAJOR FARMING SYSTEMS
Prepare a separate annex for each major farming system listed in the regional summary. ("Major" can be interpreted loosely as being more than 10% of the regions farmers.) The purposes are to have a basic description of the farming system and the reasons why particular groups of farmers are attached to it; to assemble whatever data are available to measure its output, and indicate the opportunities for improving the production in this category of farms.
1. Principal Production Activities (for example: field crops - wheat, rye; vegetables - potatoes; fruit - citrus; forestry; animal products - sheep meat, milk)
2. Land Use
Area in hectares Rainfed Irrigated Total Z
Land in Rotation Cereals Grain Legumes Oilseeds Vegetables Forage Fodder Fallow
Sub-total
Permanent Crops Forest Orchard Pasture sown Pasture natural
Sub-total Nonarable land
Total ANNEX 2 34 Appendix 2 Page 10 2. Land Use (to be used in place of precedingform if precise numbers are not available) Average farm size is ha
Total Farm Area
Arable Arable Land Land Irrigation PermanentProduction Rotation (a) (b) (c) ----- Percentage of Total Farm Area------Percentage of (b) or (c
z Forest
Fruit
Pasture - sown - natural Sub-total / / / / / ~Cereals
Crain legumes
Oilseeds
Vegetables - winter
- sunmer
fodder crops
Annual pasture
Sub-total ANNEX2 - 35 - Appendix 2
3. Crop Rotation Employed on Arabl Land
Use the number of courses to correspond with the number of years in the rotation (2 or more)
Course I Course 2 Course 3 Course 4
4. Type of Irrigation
(Statewhether the irrigationfacility is modern or traditional,the method of irrigating,and reliabilityof water supply).
5. Crop Calendars
(Kark month with X for each month from planting to harvest. Replace X with number of cubic meters of water/ha when irrigationin applied). Crop Jan. Feb._ Mar. Apr._I-- T;5.i7jay) POreFA1nI1 T.mporiry Special ! .4celb. Trjctor.NJckinwry | I-ooirs Other- i I i * . I j Aniral I Eq1ip"ent | ; I | (I or kg)~~~~~~~~~~~~~ 8113 , . j H4 K1 11 :i^ He4hanigetion; Tractor (ouvtd or hired) Co binatioes :raetor for following operations; 8i;S 1niml (or (allowing operations: FUR- achinery comonly ovmedt h ANNEX 2 37 Xp-peniTx2 Page 13 7. Yields ----- ~~-Ran,ges---- Mean Between seasons Between farms LoW High Low High Pasture food units or total dry matter - state which) Fodder (kg/ha) Fruit trees (kg/ha) Forest trees (state units) 8. Use of Products Approximate percentage of total production Home Consumption Reconversion Sale (food, clothing, on Farm fuel) (seed, feed) Crops - grain straw - grain straw - grain straw- Pasture Fruit Fores: Products ______2 - 38 - .38 ~~~~~~~ANNEXAppendix 2 Page 14 9. Sources of Improvement (Statement of opportunities for improvement) 10. Yields af Full Development Mean Range Best Demo. Research Yield low high Farmer Yields Yields (kg/ha) Pasture (Forage units or dry matter state which) Fodder (kg/ha) Fruit Trees Forest Trees (state units) 11. Input 'VMefor Full Davelopivnt Cereals Wro n oil olives Fruit or Vines Vegetables ForeLI Inputs Prices Code Legame Seed Fodder/Forage Labor Family- --- Nan/7day) Permanent Temsporary special Mech. Tractor- Machinery rhours) Other- AnimalEquipment Seeds Plant Pro-tection (I or kg) FertilArer containers (units) Hiscellaneous Mechanization: Tractor(owned or hired) Coubination;tractor for following operations; la animalfor folloving operations: F Farm machinery commonlyownods ANNEX2 - 4.0- Appendix 2 Page 16 III. LIVESTOCK BASELINE SURVEY A. Regional Level 1. Farm Size Distribution -- Number of Farms------Area of Farms-- Size of Farm (ha) Number X Hectare Less than 0.5 1 . 0.5 - l I I I I I I 1 1 - 2 I I I I i I 2- 5 1 . I I I . I 5- 10 10- 20 I I I I I I I _ 20- 50 50 -100 1 1 1 1 I I 1 0OO-200 1 1 1 I I 200-500 1 I T I I II I Greater than 500 1 I T I I I I I Total I I I I 2. Livestock Distribution (thousand heads) Size of Farm (ha) Cattle Sheep Goats Pigs Horses Poultry Less than 0.5 I I 1 1 I I I 0.5- 1 1- 1 1 1 1 1 1 1 -2 2 - 5 I . I I 5- 10 1 I I I I II 10 - 20 I I I I 20 - 50 1 1 1 1 1 11 I 50-100 1 II II II II I ,1 100 -200I 200 -500 Greater than 500 | Total l I I I I II ANNEX 2 Appendix 2 Page 17 3. Land Use (hectares) Rainfed Irrigated Total X Land in Rotation Cereals I I I I I I I Grain Legumes Oilseeds I I I . Vegetables I I I I I I I Annual forage _ I I I I I I 3 Fallow I _ I I I I I I ______I I I1 1 I I I I Sub-total I - I I ______i Permanent Crops Forest I _ I I __i_,_i Fruits I I I I I I i_ _ Pasture,sown _ Ii i _i _ i_i_ Pasture,natural i I I i I _____ i I I ~~~ ~ I ~~~~~~~~~~~~~II ______I I I I I I Ii Sub-total i I I I I I I I Nonarable Land i i I I _ ____ ; Grand Total I I i I _I ____ -42 - . Appendix 2 Page 18 4. Prices of Inputs and Outputs Inputs I I Concentrate Hay I I Sugar beet pulp Straw Barley I I 1, 1 I I . I I I I I I I Sub-total I I Outputs (farm gate prices) Higher Lower Average Meat cull cow (per kilo liveweight) Beef I I I I I I Calf I I I I I Cull ewe Mutton Cull goat Kid Cull sow Fattened pork Piglets (per head) . Milk (per liter) Wool (per kilo) Manure (per ton) I I I I I I I ,1 1 I I I I I I I I~~ ANNEX 2 43 - Appendix 2 Page 19 B. Farm Level 1. Land Use (sarmeas above) 2. Livestock Herd and Composition (head) Pure-bred Improved Local. Total Cattle Cows I I I I I I I Others I I I Ii Total | . | | Sheep Ewes I I I I I I I Others I I 1 1 I I i Total I t I I I I I I Goats Females I I I I ! I I Others I Total i _ Pigs Sows I I I I I I I Others Total . Poultry Hens I . Others Total Animal Traction I I I I i I I - ANNEX 2 - 44 - AppendLx 2 Page 20 3. Livestock Technical Coefficients Unit Cattle Sheep Goats Pigs Poultry Horses Sire breeding age month I i I Ii l I: Age of fenale lst birth month i I i I i Fecundity Rate z I j _ I j II Birth rate Z I I i Ii I I Ratio of sires to femalesZ I I iI i i i I Female cutting rate Z i _ i I I I i I Sire cutting rate Z It I I Ii i I i Mortality lst year X I Ii Ii I i Mortality after Ist yearZ I I i i I I i j Weight male 12 months Kilo I I i i I I I I II male 24 months i I II I I i I; male adult I i II ii I II Weight female 12 months Kilo I i i iI I i IiI female 24 months Kilo I II i I ii ____ female adult Kilo I Average milk prod.per dayliters I I I i I I i i I i Length of lactation days I I I I i I I Milk per lactation liters Ii I I I I I Sales:up to 6 months head i I I I I II i_i_ from 6-12 months head I i i i i I I ' I up to 12 months head I I I Iii II ANNEX 2 45 Ap-pendix 2 Page 21 4. Sources of Animal Feed Area Tons or forage units ha Yield Produc- Marketed - Available tion Purchasedt Extensive Stubble I I I I I I I I I Grazing Flo Fallow I I I j Forest range I i Range Land i I | I I I j I j j Rainfed Pasture I I I _ Ii Ii I I Forage Hay I I I I I I I 1 I Silage i I I I I I I I I I Zero-grazing I Ij I I Ii Irrigated Pasture t i I I i i I i 1 I Forage H:ay , - Silage Zero-grazing i i I I I i i i i Straw Straw j j j j j _ and grain Grain It I i Bran and al i i i i Legumes beans I i i i Others Concentrate I I I I i Sugar beet pulp - i i I i i I ~ ~~II I i I I I I I I I I ~ ~i I I I I I I i I I i ANNEX 2 -46 -APedix 2 Page 22 5. Use of Livestock Products Maximum (spring) Minimum (autumn) Milk production (daily production at farm level) Fed to calves I I i Home consumption Neighborhood marketing I i Peddlers I _ Dairy plants I I I I Total milk daily I I I _ Meat Production (head Home Consumption Me'eeted Total Output Number Live- Number Live- Number Live- head weight head weight head weight Cattle Cull covs I _ Others I I _ Sheep Culled ewes Others Coats Culled goats Others I I 1 I I I I I Pork Culled sow I | I I I I 11.1 Others I I I I I I 11 - 47 - PORTUGAL AGRICULTURALSECTOR SURVEY THE LIVESTOCKSUBSECTOR Table of Contents Page No. I. CURRENT SITUATIONOF THE LIVESTOCKSUBSECTOR ...... 2 A. Livestock Fodder Production ...... 2 B. Cattle Production ...... 8 C. Pork Production ...... 13 D. Sheep and Goat Production...... 16 E. Poultry Production ...... 19 II. MAJOR CONSTRAINTSTO LIVESTOCKDEVELOPMENT ...... 22 A. Land Tenure System ...... 22 B. Integrationof Livestockwith AgriculturalCrops ...... 25 C. Marketing,Prices, and Subsidies...... 27 D. GoverrmentServices ...... 31 E. Prospects for Livestock Production ...... 34 III. LIVESTOCK SUBSECTOR PROJECTS AND STUDIES ... 38 1. Milk Production.IntensificationProject ...... 38 2. Sheep and Goat Development Project ... 44 3. AgriculturallyIntegrated Pork ProductionProject ...... 50 IV. BIBLIOGRAPHY...... 57 V. TABLES ...... a...... 60 Table 1: Number of Farms According to their Size (1968 Census) Table 2: FarmersRaising Cattle Accordingto the Size of Farms (1968 Census) Table 3: Area of Farms Accordingto their Size (1968 Census) Table 4: Distributionof Cattle Accordingto the Size of Farms (1968Census) Table 5: Current Forage Productionin Portugal Table 6: PotentialForage Productionin Portugal Table 7: The ConcentrateFeed Industry Table 8: LivestockPopulation Table 9: LivestockCommodities Output Table 10: Meat Consumptionin Portugal - 48 - PORTUGAL AGRICULTURESECTOR SURVEY THE LIVESTOCKSUBSECTOR 1. The livestocksubsector is the only componentof Portuguese agriculturethat showeda steady developmentduring the 1970s,reaching 34% of the agriculturalGDP in 1981. 2. This trend was not actuallydue to an increasein the number of livestock,which remainedroughly constant for cattle at 1.1 million head; developedonly 5% a year for hogs, resultingin 2.0 million head; and diminished4% a year for sheep, resultingin 2.0 million head. It was rather due to (a) the improvementin the averagecarcass weightof beef, which increasedfrom 185 kilos in 1970 to 227 kilos in 1981; (b) the incrementin the number of cows currentlymilked, which increasedfrom 172,000 in 1970 to 270,000 in 1981; and (c) the enlargedcapacity of broilerproduction units, which produced2.3 millionbroilers per month in 1970 and 10.8 millionper month in 1981. 3. As in many other Mediterraneancountries, livestock is raisedmainly in small familyunits rather than in specializedand concentratedoperations. For instance,(a) herds of less than five cows account for more than 98% of the total number of dairy cows in Portugal;and (b) 75Z of Portuguesepig farmershave only one or two animalsand these account for about 31% of the country'stotal swine herd. This situationis of major importanceand has to be taken into account in the design of governmentservices and facilitiessuch as credit,marketing, research, and extension. 4. As stressedabove, the livestocksubsector is the only componentof Portugueseagriculture that showed a satisfactorydevelopment, reflecting an averageannual growth (physicalproduction) of 72 for meat and milk between 1974 and 1980. This performanceis surprisingbecause, in timesof agrarian reform, the landowr.ersfear expropriationand usuallymarket their livestock in large numbers,jeopardizing the developmentof the subsectorfor many years to come. The followingreasons could explain the unusual tendenciesobserved in Portugal:(a) livestockis essentiallyin the hands of small and very small farmerswho have never been threatenedby expropriation;and (b) subsidiesfor concentratedfeed have encouragedthe creationof many nonintegratedlandless livestockoperations around the principalcities of the country. 5. As a consequence,the growinggap that is observedbetween livestock and agriculturalproduction leads to the increasingdependence of livestock productionon importedraw materialsfor concentratedfeed, while the potentialfor forage intensificationin rainfedagriculture remains underutilized.On the other hand, the reductionand completesuppression of subsidiesfor concentratedfeed will have to be negotiatedas a conditionof the entry of Portugal into the EEC. Becauseof land shortage,few livestock producersare able to undertakeforage intensification,and most non-integratedlandless operations could not switch to anothersystem of productionbased on a higherproportion of foragewhile reducingthe use of concentrate. Consequently,it can be foreseenthat the modificationof the ANNEX 3 - 49 - Page 2 current policies for subsidizing concentrated feed would result in difficulties for the only component of agricultural productionwhose development has been satisfactory. This risk represents a major issue that should be followed carefully. 6. This Annex consists of three parts: (1) a description of the current situation in the livestock subsector, including the study of animal fodder production, followed by discussions of the four major species raised in Portugal namely, cattle, pigs, small ruminants, and poultry; (2) a presentationof the major eonistraintshampering a faster development of the subsector -- either those of a structural nature (such as land tenure and lack of integrationwith agricultural crops) or those of an institutionalnature (such as government services and policies); (3) three project briefs. These three projects have been chosen because their goals are in line with the overall technical orientations defined by the present livestock subsector study and because they are adaptable to implementationin the near future, they are (a) intensificationof milk production in the northwestern region; (b) raising of sheep and goats along the eastern boundaries of the country; and (c) pork production integrated with agriculture in two regions (Tras-os-Montesand Algarve) that are relatively free from African swine fever. I. CURRENT SITUATION OF THE LIVESTOCK SUBSECTOR A. Livestock Fodder Production 7. In Portugal. animals are fed out of: (a) forage crops (363,000 ha) and temporary pastures (25,000 ha) included in the 3.4 million ha of the area under cultivation; (b) permanent pastures (212.900 ha) and range land (185,000 ha) excluded from the crops rotation; (c) 1,190,000 ha of forestry range devoted to cork oaks and holm oaks; (d) agricultural by-products such as fallow (995,000 ha) and straw and stubbles (773,000 ha); and (e) concentrated feed (3.6 million tons in 1981). Forage Production in Portugal Area Forage Units Forage Units 2 (ha) (per ha) (million) Forage Crops (mainly harvested) Winter (rainfed) 327.000 1,900 622 Summer (irrigated) 36,000 5,600 201 Temporary Pasture (partly harvested and grazed) Rainfed 14,700 1,430 21 Irrigated 10,100 6.140 62 Sub-total in cultivation 387800 906 622 Permanent Pasture (mainly grazed) Rainfed 169,200 1.230 208 Irrigated 43,700 2,060 90 Range Land (grazed) Rainfed 185,000 150 28 Forestry Range (grazed) 1,190,000 200 238 Sub-total pasture & range 1,587.000 - 564 382 Total 1,974.800 - 1,470 1002 Source: PMA (BE) ANNEX 3 - 50 - Page 3 Annual Forage Cro2s 8. It is estimated in the table above that annual forage crops are established on 363,800 ha. Ninety percent of these annual forages are winter crops (oats and barley. associated or not with legumes) and are concentrated in regions 1, 3, 5 and 6 1', which specialize in dairy production (para. 23). The remaining 0I of annual forages are irrigated summer crops, mainly maize harvested silage in regions I and 3. Irrigated summer forage crops would have an output of 5,600 forage units (FU) per ha against 1,900 FU for rainfed winter forage crops. because of their area and their higher yields, annual forage crops supply the bulk of fodder available to livestock. Temporary Pastures 9. Temporary pastures (up to 5 years duration) are rather marginal since they cover only 24,800 ha, of which 40% are irrigated. More than half of the tempora.y pastures included in wheat rotation can be found in the Alentejo region. Research undertaken in Elvas beginning in the mid-1960s resulted in a pasture establishment program ot subterranean clover ranging from 3,000 to 20,000 ha per year. with a total of roughly 100,000 ha having been established since the beginning. Although small demonstration plots located in C, D and E soils of Alentejo resulted in an average output of 160 kilos of meat (liveweight) per ha in areas where spontaneous vegetation would supply only 20 to 25 kilos of meat per ha, the technology used has not yet proved to be fully satisfactory on commercial farms. 10. The three major reasons for poor performances of temporary legume pastures under trees and in rotation or in substitution of wheat in marginal areas are lack of extension services, lack of research, and institutional bottlenecks. Pasture establishment is the easy step of such a program and the only one that has ever received assistance through the free supply of seeds. Because there are almost no technicians trained in grazing management of such pastures in Portugal, the result is generally their wrong utilization (low stocking rate, grazing during the wrong vegetative period, etc.) and their fast degradation. On the other hand. in the drier rainfed areas. -uch systems imply the storage of sufficient amounts of forage for the dry season -- a practice that has often been neglected. In addition, research is needed in the fields of (a) assessment of regional macro/micro nutrient requirements; (b) identification of spontaneous species and varieties adapted to local conditions; and (c) study of animal utilization related with digest;bility and toxicity of some plants (estrogens, alkaloids). Institutional bottlenecks include the price policy, the agrarian structure, and poor credit facilities. Permanent Pastures 11. Permanent pastures (more than 5 years in duration) cover almost 200,000 ha, of which two-thirds are rainfed (1,230 FU per ha) while one-third is irrigated (2,000 FU per ha). Permanent pastures are concentrated essentially in regions 1, 2 and 6. lb region 2 (Tras-os-Montes) most permanent pastures are rainfed and collectively owned and managed. Forestry and Range Land 12. Natural range can be found mainly in region 6 (Alentejo), with 138,000 ha out of a total of 185,000 ha (75%). It would yield a poor 150 FU I/ Regions referred to in this Annex are shown in Map 17193 ANNEX 3 - 51 - Page 4 per ha. Forestry range is grazed under roughly 85Z of cork oaks (653,000 ha) and holm oaks (534,000 ha). Since this area is cropped every seven years as an average, it yields a little more (200 FU per ha). It is concentrated also in region 6 (Alentejo), which includes 968,000 ha of forestry range out cf a total of 1,186,000 ha (82X). Agricultural By-products and Concentrates 13. Because of the extensive agricultural pattern prevailing in the country almost a million ha are left failow every year, with an output estimated at 330 FU per ha (328 million FU). Straw and stubble have been estimated to reach 650 FU per ha of cereal, which would amount to 502 million FU. Finally, out of a total of 3.6 million tons of concentrate produced in Portugal in 1981, 944 thousand tons would have been supplied to cattle (26%) and Z negligible proportion to small ruminants. It is assumed that cattle concentrate is worth only 0.8 FU per kilo in Portugal. Total Nutritional SUpply 14. Available fodders amount roughly to 3,000 million forage units, as follows: Estimated Amount of Fodder Supplied to Livestock in Portugal Area Forage Units 2 (ha) (million) Forage crops/temporary pastures 386,800 906 30 Permanent pastures/range 1,587,000 564 18 Fallow 995,000 328 11 Straw and stubble 774,000 502 16 Concentrate supplied to cattle & sheep - 755 25 Total 3,055 100 Although these figures are rough estimates, they show that cattle, sheep, and goats received almost 602 of their requirements from forages (annual crops, temporary pastures, fallow, and agricultural by-products) integrated with agricultural production. On the other hand, although ruminants are poor cereal converters, 25X of their requirements are being covered by concentrates, of which 95Z have to be imported. Although permanent pastures and range represent 75% of the area devoted to forage production, owing to their low yield (resulting from no improvement and poor grazing management) they supply only 18% of the total fodder received by animals. Livestock Requirements 15. Using standard nutritional requirements, herds of ruminants existing in Portugal should be fed the following amount of forage units: ANNEX 3 -52 - Page 5 Estimated Livestock Requirements in Portugal Stock Forage Units Forage Units % (Animal Units) (per Animal Unit) (million) Cattle 496,000 3,600 1,785 60 Sheep 1,432,000 400 573 20 Goats 531,000 400 212 7 + 15% (horses/grazing pigs, others) 386 13 2,955 100 Source: Mission estimates Although the overall requirements of Portuguese livestock seem to be adequately covered, the following points should be stressed: (a) 45% of all fodder made available to animals (poorly managed pasture and range, fallow, straw, and stubble) represents a low-quality product not adapted to the requirements of most intensive types of production (milk, fattening); (b) around 50% of fodder production (irrigated forage crops and pastures, straw and stubble, concentrate) are available during the dry season, compensating for the lack of development of silage and hay making; and (c) the forage balance is reached only through the heavy supply of irrigation to 10% of forage crops, 40% of temporary pastures, and 21% of permanent pastures, and a very important amount of concentrates. Productive Potential 16. Detailed projections for the natural areas of the seven regions of the country indicate that, while yields of forage crops and pasture could be slightly increased, their areas could be substantially expanded. Estimated Potential Forage and Pasture Production in Portugal Current Potential Increment Area (ha) Area (ha) Forage crops Winter (rainfed) 326,600 448,230 x 1.4 Summer (irrigated) 35,980 61,880 x 1.7 Temporary Pastures Rainfed 14,760 1,141,990 x 77.4 Irrigated 10,110 91,916 x 9.1 Permanent Pasture Rainfed 169,190 955,800 x 5.7 Irrigated 43,710 34,000 - Source: PMA (B1) - see tables 5 and 6. ANNEX 3 53 Page 6 17. As fa:-as forage crops are concerned, such an expansion would be rather moderate through a faster crop rotation, resultinr ia.a higher proportion of annual forages in rainfed and in irrigated area,. The bulk of forage development would result from the expansion of new rotations, including annual and perennial legumes in substitution for fallow and marginal wheat crops. Finally, subterranean clover pastures could be substituted for underproductive natural range in most of the regions of the country, increasing substantially the area of rainfed permanent pasture while the area of irrigated pernmanerntpasture would be slightly reduced. This scenario seems to be in line with the natural potential of the country, although it possibly could be modified in order to develop slightly more rainfed annual forage crops in relation to temporary pasture in the northern part of the country. It is assumed that, potentially, the 2.7 million ha which would then be involved in intensive forage production would supply 6.1 billion FU instead of the 1.2 billion FU currently supplied by the 0.6 million ha presently under forage production. Financial Aspects of Pasture Development 18. Since temporary pastures established in rainfed areas represent the major prospects for the development of Portugal's forage production, the cost of the different technological alternatives should be studied carefully. Pasture Establishment Costs in Portugal (1983) (Subterranean Clover, Escudos per ha) Investment Costs (to be amortized over 4 to 6 years) Mechanization: Scarification or cover crop (2.5 hours) 2,400 Seeding 600 Seeds: 12 kilos x Esc. 300 3,600 Fertilizers: 400 kilos of super phosphate 45 3,000 Fencing and water points 4,400 13,600 Maintenance Costs (annual) Including fertilization, weed control, fencing, maintenance, etc. 5,500 Source: Mission estimates Assuming that no heavy mechanization is required (deep ploughing) and no liming is undertaken, the average annual cost of such operations (including amortization) would reach Esc. 10,000 a year. Such pastures are assumed to supply 1,200 forage units a year, which brings the cost of these forage units to Esc- 8.30 - half the cost of one forage unit supplied by subsidized concentrates. Given the technical management constraints of pasture establishment and utilization, forage units supplied by temporary pastures are still too expensive compared with those supplied by subsidized concentrate. ANNEX 3 - 54 - Page 7 Concentrated Feed Industry 19. The booming of the concentrated feed industry, whose production rose from 955,000 tons in 1970 to 3,637,000 tons in 1981, is mainly due to the government policy of heavy subsidies since then. Concentrates are being supplied by 98 units whose annual capacity could reach 6,000,000 tons by working 16 hours a day, 252 days a year. The sector is already highly industrialized, as its average output reaches 100 tons a day for each unit. Most of the concentrated feed is being produced in Lisbon (56%), Alentejo (17Z), and Beira Litoral (15%) while Tras-os-Montes, Beira Interior, and Algarve have practically no concentrate processing facilities. 20. In 1981 concentrated feed was supplied to the livestock subsector as follows: Mixed Feed Production in Portugal (1981) Thousand Percent Tons Pig production 1,506 41.4 Poultry 1,049 28.8 Beef 661 18.2 Milking cows 283 7.8 Others (sheep, goats, etc.) 138 3.8 3.637 100.0 Source: IACA As far as ruminants are concerned, concentrated feed is not properly used to correct basic ration deficiencies, but is often used to offset the effects of seasonal fluctuations in forage availability, which should be corrected through forage harvesting and storage. In 1976, 176,000 tons of concentrate were marketed in April (when grass is available in pastures), while 200,000 tons had to be produced in September to meet the forage shortage. 21. Prices of concentrates have increased faster than the average farm gate value of livestock production in recent years: Prices of Concentrates in Portugal (Escudos per kilo) Annual 1980 1981 1982 Increase (2, Poultry 11.00 15.41 17.78 30 Cattle 9.26 12.55 14.40 28 Pigs 10.15 13.80 16.06 29 Source: Information provided to mission ANNEX 3 - 55 - Page 8 The amount and the side effects of subsidies for concentrates are discussed elsewhere in this Annex (para. 95). It should be stressed that most of the raw material used in the preparation of concentrated feed is imported. In 1981, for example, 95% of the 2.34 million tons of cereals and 100% of the 0.76 million tons of oilseed cakes (most of them, soybean) used in the blending of 3.64 million tons of concentrates had to be imported. It has been estimated that if this raw material had to be purchased from the EEC market instead of the international market, it would increase the cost by 35%. On the other hand, concentrates supply 25% of total inputs for livestock production and reflect 40% of its intermediate cost. B. Cattle Production Cattle Herd 22. Cattle population was estimated to be 1,100,000 head in 1981, of which 45% (496,000 head) were estimated to be cows. Regional Distribution of Cows in Portugal (Head) Milking Meat Total Percent Regions (1981) (1979) Entre Douro e Minho 1 86,200 45,800 132,000 27 Tras-os-Montes 2 13,100 29,900 43,000 9 Beira Litoral 3 71,300 35,700 107,000 22 Beira Interior 4 17,900 5,550 23,450 5 Ribatejo e Oeste 5 46,200 24,700 70,900 14 Alentejo 6 28,700 78,300 107,000 21 Algarve 7 6,600 6,000 12,600 2 Total 270,000 226,000 496,000 100 Source: PMA (Dl) 23. Dairy cattle are concentrated in the three northwestern regions (Entre Douro e Minho, Beira Litoral and Ribatejo e Oeste), which raise 75% of the specialized dairy herd. Herds for specialized beef production are mainly located in Alentejo, as well as, in a lesser degree, in t}e regions specializing in dairy production. Dairy cows are generally raised in small family units: 90% of the dairy production units raise 1 to 5 cows, while there are only 170 dairy production units in Portugal that have 51 cows or more. The average dairy operation has 2.0 cows in Beira Litoral, 2.4 cows in Entre Douro e Minho, and 4.3 cows in Ribatejo e Oesto. Beef production operations are small in the eastern mountainous regions of the country while they are more important in the large wheat production farms of Alentejo. 24. Cattle population has been increasing steadily since the 1930s when it was around 780,000 head. Meanwhile the number of cows raised for both milk and beef production increased in relation to herds raised especially for beef production; Friesian breed cows, which amounted to only 142,000 in 1960, reached 270,000 in 1981. There are seven native Portuguese cattle breeds, two of which supposedly have dairy potential (Araouquesa and Minhota) and the five others are used exclusively for beef production (Mirandesa, Barrosa, Maronesa, Alentejana, and Mertolenga). There is a real concern among technicians about the progressive reduction of these native ANNEX 3 - 56 - Page 9 breeds. A special Esc. 2,000 subsidy is paid for native breeds female calf registration on herd books. It has long been recognized that the single purpose beef breeds are biologically inefficient and can only be justified if such animals are maintained on low-cost land and managed extensively. In Portugal, such areas would be better devoted to the raising of sheep and goats. Therefore, it is obvious that these native breeds will be progressively replaced by more productive dual-purpose breeds or other species, except in areas where they could supply particular requirements (labor). Technical Coefficient 25. The overall cattle fertility rate reaches 80%, adult mortality is 5%, and the culling rate is lower than 20%. The average dairy productivity increased from 2,320 liters per cow per year in 1960 to 2,930 liters in 1981 (. 26% in 21 years), besides milk supplied to calves. In the meantime, beef production increased from 154 kilos (carcass weight) per cow in 1971 to 227 kilos in 1981. This was mainly due to a higher slaughtering weight, which averaged 197 kilos in 1971 against 235 kilos in 1981, together with a slight increase in slaughtering rate. Artificial Insemination 26. The cattle artificial insemination center of Venda Nova (Lisbon) has a production capacity of more than 300,000 doses per year. Frozen semen is being dispatched to 21 subcenters distributed throughout the country. In 1981, 158,600 cows were inseminated, of which 134,500 (85%) received semen from the Friesian breed. Most of artificial inseminations are performed in the dairy production regions, such as Entre Douro e Minho (35%), Beira Litoral (34%) and Ribatejo e Oeste (10%). Dairy cooperatives are helping in the fast development of this technique in areas where they manage milk collection facilities. In spite of its high cost, artificial insemination is almost free to herders, although private farmers who can afford it pay Esc. 1,000 to 3,000 for imported semen (28,000 doses imported in 1981) from progeny tested sires. Productive Systems 27. Out of a to:al 808,000 Portuguese farmers, 304,000 (38%) raise one or more head of cattle, while only 101,600 (13%) deal with specialized dairy production. Among the many dairy production systems implemented in Portugal, the most representative are: (a) small integrated dairy units (1 to 5 cows) with irrigated forage (even in the north of the country for the lack of forage storage facilities), using agricultural by-products (such as vegetable tops, weeds, stubbles, straw, a small area of winter and summer forage crops and a small amount of concentrate (less than 1 kilo per head per day); and (b) semi-industrialdairy operations (more than 20 cows) based on summer forage crops (maize) and larger amounts of concentrate (more than 3 kilos per head per day). 28. Among the different beef production systems implemented in Portugal, the most representative are: (a) extensive beef breeding operations in rainfed areas (eastern regions, Alentejo), based on local- breed herds whose size varies from half a dozen to one hundred head and which are fed with agricultural by-products (fallow, straw, and stubble) as well as natural pasture. In this system, steers are usually sold before ANNEX3 -57 Page ia fattening; and (b) steer fattening operations which also generally involves a large number of animals. Feeding way include grazing of good-quality artificial pasture, but mostly consists of large amounts of concentrates (661,000 tons of concentrates were supplied for beef fattening in 1981, averaging 2.9 kilos per kilo of beef produced (live weight). Production Estimates 29. Milk production has shown a fast development during the last 20 years (from 329,000 tons in 1960 to 690,000 tons in 1981). As stated previously (para. 25), this increase is due to the combination of a larger number of dairy cows, together with the improvement of individual productive coefficients. Obviously, this production is concentrated in the three northwestern regions (1,3 and 5) where 75% of dairy cows are located and which yield 782 of the national production. Owing to the permanent breeding pattern that is applied by herders, dairy seasonal productive fluctuations are not very important because the full production (April to June) is only 10% to 12Z higher than the low production (September to February). Beef production has also substantially increased during the last 20 years, from 40,200 tons in 1960 to 112,000 tons in 1981. Production Costs and Farm Gate Prices 30. Beef and milk production costs vary extremely according to systems of production. Farm gate prices are periodically published by the National Authority for Livestock Products (JNPP) from trade registered in a sample of markets. These prices differ according to types of animals and include a grading system which could be easily adapted to the EUROPA system used in the EEC. It is assumed that both financial and economical costs are lower in small family-size systems where livestock production is integrated with agricultural crops than in semi-industrial systems that use great amounts of purchased inputs. Although such small family-size operations are often considered to be inefficient because they do not show high technical yields, they remain highly competitive in relation to semi-industrial operations. JNPP intervenes on the beef market when intervention prices are reached, and beef farm gate prices result from the law of demand and supply. Middlemen and butchers are supposed to respect theoretical wholesale and retailing margins. Milk farm gate price is decided by the Government in consultation with the dairy industry (Esc. 23.50 per liter for grade A milk since March 15, 1983). 31. Processed milk supplied to consumers is highly subsidized. In 1982, pasteurized milk was marketed to consumers at less than the farm gate price. Processed Milk Subsidies in Portusal (1982) Pasteurized Z of Ultra-Pasteu- Z of Milk Production rized Milk Production (Esc. per liter) Cost (Esc. per liter) Cost Farm gate price 21.00 21.00 Processing cost 7.95 13.35 Total cost 28.95 34.35 Subsidies 11.165 40 7.85 23 Retail price 17.50 60 26.50 77 Source: PMA (HI) - 58 - ANNEX 3 Page 11 32. Milk Collection. The most interesting feature of the dairy industry in Portugal is the network of dairy collection and milking facilities which has been set up in the major productive areas of the country: Milk Collection Network in Portugal Collection Concen- Milking Parlours Centers tration Cooperative Private Cooled Not Centers Cooled Not Cooled Not Entre Douro e Minho 796 9 252 88 333 467 Beira Litoral 452 6 685 87 167 307 Ribatejo e Oeste 122 172 9 137 746 Alentejo 62 39 5 1 83 159 Algarve 1 7 5 25 133 Total 1,433 218 34 1,038 175 745 1,812 Source: MACP (H3) The advantages of such a network (especially those of the cooperative milking parlours) can be summarized as follows: (a) they improve the quality control, supplying a more hygienic raw material to the industry; (b) they reduce collecting costs; (c) they contribute to the development of dairy production in small family farms; and (d) they could be used as an efficient channel for extension, input supply, and other services. Milk Processing 33. It is estimated that out of a production of 790,000 tons produced in 1981, 161,000 tons (20%) were not marketed (family consumption), while the remaining 630,000 tons were collected by the industry - 85S of this amount being processed by cooperatives while private industry processed the remaining 15X. Two-thirds of the milk supplied to the Portuguese industries is being processed into different kinds of fluid milk, while the remaining amount of milk is being processed into cheese and other dairy products. 34. There are 82 milk processing plants in Portugal, of which 33 produce fluid milk, 38 process dairy products, and the rest process both fluid milk and dairy products. Most of these plants are located in the northwestern producing area, with a total daily capacity of 1.3 million liters a day for dairy products and 2.4 million liters a day for fluid milk. These capacities are thus sufficient to process the volume presently marketed. - 59 - ANNEX 3 Page 12 Processingof Milk and Dairy Productsin Portugal (Tons) Fluid Milk Dairy Products 1976 1980 1975 1981 Pasteurized 194,700 290,100 Butter 1,355 3,830 Ultra-pasteurized 19,000 19,200 Cheese 7,500 22,450 Aseptic 26,700 156,200 Yogurt 3,990 26,380 Sterilized 6,600 3,100 Powderedmilk 230 415 Regular 9,100 14,400 Condensedmilk 1,390 265 Total 256,100 483,100 Other 2,900 4,400 Source:PMA (Hi) Beef Slaughteringand Storage 35. There is an averageof one slaughterhousefor cattle and small ruminantsfor every municipalityin Portugal. All of these slaughterhouses are being managedunder the authorityof the JNPP. Of the 257 slaughterhousesin the country,only 38 operateunder conditionsacceptable by Europeanstandards. The capacityof each slaughterhouseranges from 1,000 to 26,000 tons a year, with an overallaverage of 2,000 tons. The largerslaughterhouses (Lisbon, 20,000 tons; Porto, 10,000tons; Beja, 26,000tons; Cachao,15,000 tons) are operatingat less than 50% of their capacity. Except for Rio Maior, Uniagri,and Cachaooperations, there are no privatelyoperated slaughterhouses for cattleand small ruminantsbecause of the lack of financialrentability, under the currentJNPP price policy, cold storagefacilities are very limited,as Portugalonly has 85 trucks equippedto transportfrozen meat, a freezingcapacity of 4,900 tons per hour, and a total meat storagecapacity (chilled + frozen)of 38,600 m3. The JNPP 36. The JNPP has a staff of 4,000 employees(including slaughterhouse workers). Aside from managingslaughterhouses for cattleand small ruminants,the JNPP has the monopolyon internationaltrade for meat and dairy products. It is supposedto regularizethe market by purchasesor sales when farm gate prices go beyond the interventionprices. The efficiencyof the JNPP is hamperedby the followingobstacles: (a) the authoritydoes not enjoy financialautonomy, which means that it cannot operatewith the requiredflexibility and rapidity;(b) it does not control enoughcold storagecapacity; and (c) there is very littlecooperative organizationof meat producers. As a result,JNPP interventionson the marketare only marginal. In 1981 these involved5.4 thousandtons of beef (5% of nationalproduction) and 3.5 thousandtons of pork (2% of national production)-- obviouslynot enough to regulatefarm gate prices. International Trade and Per Capita Consumption 37. Substantial amounts of dairy products, powdered milk, cheese, and butterwere importedin 1981: namely, 122,000tons of FME (fluidmilk equivalent)from the Azores and 7,000 tons of FME from other countries ANNEX 3 - 60- Page 13 (total 129,000 tons = 14% of total consumption). In the same year 7,600 tons of beef (carcass weight) were imported from the Azores, while 2,050 tons were imported from other countries (total 9,650 tons = 81 of total consumption). Together with the domestic production, these imports supplied the Portuguese population with the following per capita standards: Beef: 124,726 tons : 9.48 million persons = 13.2 kilos per capita Milk: 819,000 tons : 9.48 million persons = 86.4 kilos per capita C. Pork Production Pig Population 38. Pork production is carried out in 586,000 units on the 808,000 farms existing in Portugal (72Z). The pig population was estimated to reach 2 million head in 1981, of which 249,000 were sows (13%) and 14,200 were boars (61 in relation to sows). The Pork ProductionSector in Portugal (1981) Pig Pig Sow X Raisers Population Population Sows Entre Douro e Minho 138,300 286,400 27,100 10.8 Tras-os-Montes 57,800 141,700 20,000 8.0 Beira Litoral 170,500 391,300 49,300 19.8 Beira Interior 59,700 127,200 10,500 4.2 Ribatejo e Oeste 10,100 510,700 68,300 27.4 Alentejo 39,000 444,800 61,900 24.9 Algarve 19,500 75.100 11.800 4.7 Total 585,900 1,977,200 248,900 100.0 Source: PHA (F3) Pig raising is thus very much concentrated in the three west central regions of Beira Litoral, Ribatejo e Oeste and Alentejo, which control 721 of the number of sows in the country. Productive Systems 39. The pig raising industry is very heterogeneous in terms of size: 561,000 units (961 of the total) raise 1 to 9 heads or 1.15 million pigs (58% of the total) while only 1,400 units (0.2% of the total) raise more than 100 head or 0.37 million pigs (191 of the total). In terms of productive systems, there are clearly two major systems competing with each other: (a) family-size operations throughout the country, in which pig raising is undertaken in order to supply family consumption and is implemented from piglets born on the farm or purchased nearby. No crop is planted to feed the animals, which are rather fed with agricultural by-products and household waste plus a small amount of cereals or concentrates; and (b) the "modern" productive system, consisting of industrial types of facilities in which pigs are fed exclusively with concentrate feed. The Alentejo traditional system of grazing large flocks of pigs under oaks, taking advantage of acorn production, has disappeared as a consequence of the African swine fever. - 61 - ANNEX 3 Page 14 Breeds and Technical Coefficients 40. Around 65% of the pig population represent a crossbreeding between domestic breeds (Bisara in the northern part of the country and Alentejana (Iberica) in the southern part) and European breeds. Of the population, 20% is Landrace breed, imported from Denmark and is essentially located in the modern industrial production sector. Overall technical coefficients are still very low, with an average breeding for each sow 1.5 times a year with a weaned litter of six piglets, which results in a slaughtering yield of 9 pigs per sow per year (instead of the 16 to 18 pigs which could be slaughtered under proper management). The average carcass weight is still rather low (68.4 kilos) but could hardly be improved before substituting the genetic stock, since local breeds and crossbreeding yield too much fat at higher slaughtering weights. Concentrate Conswnpcion and Conversion 41. Concentrate supplied to pigs increased from 309,000 tons in 1970 to 1,506,000 tons in 1981. In the meantime, pork production increased only from 100,000 to 164,000 tons. In ten years, the amount of concentrate supplied to pigs increased from 2.2 kilos to 6.4 kilos per kilo produced (live weight). These figures show a surprisingly low efficiency of the sector compared with other systems, where for instance, the sector is supplied with only 1.8 kilos of concentrate for each kilo (liveweight) produced during the fattening cycle. These figures are even more surprising when one realizes that only two-thirds of all pig fattening operations are supplied with concentrate. This low efficiency can be explained by the following reasons: (a) the overall consumption standard includes feeding of sows known to have a low reproductive efficiency; (b) for lack of quality control, the concentrate is believed to have poor nutritional qualities; (c) no fodder produced on the farm (potatoes, beets, grain) is being used to reduce the consumption of concentrate; and also (d) fattening units are often poorly managed. African Swine Fever 42. A first outbreak of African swine fever (ASF) appeared in Portugal in the spring of 1957. Since the disease is endemic in the country, 28,900 farms have been contaminated, on which 920,000 pigs were raised, of which 680,000 were slaughtered while farmers received compensation for 755,000 of them. ASF has been eradicated in European countries where it was observed (France, for example). Measures include a tight control of pig transportation, a higher commitment of veterinarians, and a flexible system of indemnification. Instead of fighting the disease on a nationwide level, the pork industry has attempted to protect individual raising units (isolated pork production units) supposed to have as few relationships as possible between each other in order to avoid the propagation of ASF. 43. There are 330 isolated pig production units and 10 isolated pig selection units in Portugal. Most of them (60%) are located in the Lisbon area. In 1981, these units raised 41,000 sows (16%) and marketed 49,000 tons of pork (30%). Although this isolation approach has been strongly supported both by the Government and the professional organizations, it does not seem to be the solution to the ASF since (a) it is taken for granted that ASF will continue to affect non isolated farms; (b) isolation is illusory because transportation of people, animals, and merchandize to and ANNEX 3 - 62 - Page 15 from the units is unavoidable; (c) this policy encourages the creation of large industrial capital intensive units that cannot be integrated with agriculture and have no relationship with the average size of agricultural operations in the country; (d) as these units are supposed to undertake both breeding and fattening, there is a contradiction between the level of technological skill required by each of these two segments of the productive process; and (e) no country, within or without the EEC, will ever agree to import processed pork meat from Portugal as long as a serious ASF eradication program is not carried out in the country. Production Estimates 44. In 1981, 2.4 million pigs were slaughtered in Portugal with a total carcass weight of 164,000 tons. In relation to 1970, where only 1.5 million pigs were slaughtered, weighing 104,000 tons, production has increased by 60%. Slaughter rates are slightly higher during the second part of the year. In 1981, for example, the number of pigs slaughtered during the second term of the year was 13% higher than the number slaughtered during the first term. Production Costs and Farm Gate Prices 45. Production costs differs widely according to the productive systems and the level of technical management. It was assumed to be Esc. 130 per kilo carcass weight in industrial units of Algarve during the first quarter of 1983. At the same time, the farm gate price was satisfactory at Esc. 170 per kilo of carcass weight which included a net benefit of about 25%. The market for fattened pigs shows great periodical fluctuation as it does in other countries. In Portugal, these price fluctuations, which show a 3 to 4 year periodicity are more pronounced than in other European countries because (a) the production, which is distributed among a large number of very small operations, is not being planned by the industry, the cooperatives, or the Government; and (b) the agency in charge of the market regularization, JNPP, does not have the necessary resources and flexibility. Aside from pluri-annual fluctuations, pig farm gate prices show great seasonal variations, with the lower prices (winter) averaging only 701 of the higher prices (summer). Pig Slaughtering. Processing, and Consumption 46. It is estimated that in 1981, 32,900 tons of pork (20%) have been subject to family consumption while 77,400 tons (47%) were marketed as fresh meat and 564,300 tons (33%) were processed into pork products. Pig slaughtering is exclusively undertaken by private enterprises. There are 2,300 butchers throughout the country who, together with 49 semi-industrial slaughterhouses, process 30X of national production while 15 industrial processing plants that are located close to the capital (Lisbon, Setubal, and Santarem) process 70% of national production. Since no international trade involving pork took place in 1981, it is estimated that the per capita consumption that year was 16.4 kilos per person, reflecting only 9.8 kilos of meat (excluding bacon and grease). In contrast, the average per capita pork consumption in the EEC is 35.6 kilos. ANNEX 3 - 63 - Page 16 D. Sheep and Goat Production Small Ruminants Flock 47. The national small ruminants flock is estimated to be 2,017,000 sheep (of which 1,432,000 or 71Z are supposed to be adult females) and 718,000 goats (of which 531,000 or 74Z are estimated to be adult females). These official National Institute of Statistics (INS) figures are questionable because the wool production marketed througlhthe JNPP indicates that the national herd could be much larger than estimated. Between 1955 and 1979 (24 years) the number of ewes of 1 year of age and more would have decreased from 2.45 million to 1.43 million head (-42X) while that of goats would have slightly decreased from 0.55 to 0.53 million (-42). 48. Many reasons are being given for this surprising reduction of species so well adapted to take advantage of the extensive fodder resources available in extended areas of the country (reasons such as scarcity of herders due to rural migration, low prices for production, etc.). Paradoxically, the reduction of the number of sheep in the country has taken place at the same time that wheat production was abandoned in marginal areas. Because of the lack of range management technology, instead of being used as permanent pasture this area has been progressively abandoned, even by grazing animals. 49. The regional distribution of small ruminants shows that they are concentrated in the eastcentral and southern regions of the country (Beira interior and Alentejo) where wheat production is established in large areas. The reason is that, in the present system of production, raising of small ruminants is managed as a by-product of wheat production. Small Ruminants in Portugal, 1976 (Thousand Head) Total Small Ewes Goats Ruminants S Entre Douro e Minho 1 98 50 148 7.5 Tras-os-Montes 2 140 69 209 10.6 Beira Litoral 3 156 96 252 12.8 Beira Interior 4 216 110 326 16.6 Ribatejo e Oeste 5 165 74 239 12.2 Alentejo 6 633 116 749 38.2 Algarve 7 24 16 40 2.0 Total females 1,432 531 1,963 100.0 Total flock 2,017 718 2,735 - Source: PMA (GI) Breeds and Technical Coef.icients 50. Portuguese sheep are 54Z from Merino breed, while the other 46X divide into 13 national ethnological groups. Of the latter breeds, three are specialized in dairy production (Mondegueira, Serra da Estrela, and Saloia) - 64- ANNEX3 Page 17 while the others are meat producers (Bordaleiro and Churro). Goats are rather specialized in milk production (the Serrana breed, which is 52Z of the flock) or are dual-purpose breeds (the Charrequeira (277) and the Raiana (182)). Small ruminants raised in Portugal present rather satisfactory technical coefficients since sheep fertility ranges from 85% to 952 while prolificacy reaches 110% to 1307. Lamb mortality would average 107 and the culling rate is 15% to 207. Adult liveweight averages 37 kilos for females and 45 kilos for rams. Ewes from specialized dairy flocks perform well, yielding half a liter of milk per day for 180 days (90-100 liters per lactation) while dairy goats reach ,0UO-400liters pferI;Wt:iLiol. It is e-stimaLtd that around 30% of ewes and 100% of female goats are being milked. Productive Systems 51. It is assumed that 170,000 farmers raise sheep and 150,000 farmers raise goats in Portugal, although very often sheep and goats are raised together. It is estimated that 72 of the herders control 607 of the total flock, the additional 40Z of thc aninals being scattered among a large number of very small units. Large herds (100 to i.000 head) are rather specialized. (a) In well-known cheese production areas (Beira Interior and Ribatejo e Oeste), milk production operations have to reach a size which will justify cheese processing (several hundred ewes). Since no mechanized milking is yet used for ewes and goats, even when they are under family management, such operations include rented labor (one milkman for 100-120 ewes). Such systems are well integrated with agricultural production, with little or no use of concentrate. Fallow, stubble, straw, together with low-quality range are used according to their availability. Although spring lambing is not always pursued, the requirements of the milking ewes during summer are relatively high. Because of the lack of proper technologies that would allow the storage of good-quality forage to be used during summer, such milk production operations can only be undertaken where some irrigated forage can be harvested in sumimer. The irrigation prerequisite limits milk producing small ruminants to a very few areas where irrigation is available, although most natural pasture and range resources are underutilized. This technical shortcoming could be easily resolved through the development of rainfed forage production, harvesting, and storage (which is still rare in the area). 52. (b) Meat production systems located in wheat production areas (Alentejo) also include large herds according to the size of the farms. In this system, although it does not lead to the optimization of rainfed resources, autumn lambing prevails because prices for lambs and kids are higher at Christmas time. Large-size meat production systems for small ruminants are also well integrated with wheat production. Since grazing pigs have almost disappeared in the Alentejo, sheep and goats are grazed under cork oak plantations where they harvest acorns and average up to 200 grams of daily gain between July and December. Most of the 138,000 tons of concentrate fed to small ruminants is used during the final stage of fattening young animals in this system. (c) Besides these specialized productive systems, animals are distributed into small flocks whose production of milk and meat is designated for family consumption. These animals are fed mostly through agricultural by-products (weeds, vegetable tops, etc.) available on the farm and through grazing in the surrounding range land. ANNEX 3 - 65 - Page 18 Meat Production 53. In terms of meat production, the JNPP assumes that in 1981, 872,600 sheep would have been slaughtered (43% of the flock), with a total weight of 9,612 tons (average carcass weight: 11.0 kilos), while 431,000 goats would have been slaughtered (60% of the flock) with a total weight of 3,106 tons (average carcass weight = 7.2 kilos), of which 40% vould be supplied for family consumption. This production is subject to seasonal fluctuations; between March and May (25% of the year), 32% of sheep and 33% of goats are being slaughtered for meat. Milk Production and Processing 54. Estimates are subject to great discrepancies because most of this production is not marketed. In 1981 it was assumed that goats would have produced 57,000 tons of milk, of which 62% would have been produced in Beira Interior and Ribatejo e Oeste. That same year, ewes would have produced 43,000 tons of milk, of which 66% would have come from Beira Interior and Alentejo. While most goat milk is being consumed at farm level (only 1,530 tons of cheese produced in 1980), most ewe milk is being processed into cheese (13,700 tons produced in 1980). Some of these cheeses (Serra da Estrela, Serpa, Azervao, and Castelo Branco), which are mainly processed in small private units, are of high quality. In 1981, 2,000 tons of ewe cheese were exported. Wool production, which is entirely marketed through the JNPP, was 9,183 tons in 1980. Production Costs and Farm Gate Prices 55. Ewe milk production shows relatively high operating costs, mainly for feeding (summer irrigated forage production) and labor (one milkman per 100 ewes). The high value of production (ewe milk being marketed for Esc. 65-70 a liter, or between 2 and 3 times the value of cow's milk) leaves an average net margin of an estimated Esc. 2,000 per ewe and per year. Lamb pricing varies according to the carcass weight: Lamb Pricing (March 1983) Carcass Weight Price per kilo (Carcass Weight) (Kilos) Escudos 6 - 7 400 12 - 13 280 18 - 20 200 Source: Information provided to the mission Lamb production that is integrated with wheat production has lower feeding costs (rental value of fallow, stubble) and requires less labor. The financial return of lamb production is improving gradually since the price of lamb is increasing in relation to wheat and other meats (paras. 91 and 92). ANNEX 3 - 66 - Page 19 International Trade and Per Capita Consumption 56. Since in 1981 no sheep or goat meat was traded .-ith other countries, the per capita consumption of small ruminant meat is a.-..d to have been only 1.3 kilo. Portuguese cheese production reached 37,680 tons (including 22,450 tons of cow cheese). Since international trade of Portuguese cheese is balanced at around 2,000 tons, per capita cheese consumption is assumed to have been around 4 kilos in 1981. E. Poultry Production Bird Population 57. Around 130 million chickens were slaughtered in 1981 in Portugal (including specialized broilers and culled laying hens), together with 3.1 million turkeys, while 7.9 million laying hens were raised for egg production. Except for family poultry production, which is spread all over the country, the poultry industry is very much concentrated in the west central part of the country: Regional D;stribution of Poultry in Portugal's Industrial Sector (1981) Meat Production Egx Production Tons X Laying hens b Entre Douro e Minho 18,183 11.9 598 12.1 Tras-os-Montes 612 0.4 17 0.3 Beira Litoral 70,591 46.2 1,607 32.6 Beira Interior 2,903 1.9 658 13.4 Ribatejo e Oeste 53,172 34.8 1,685 34.2 Alentejo 2,139 1.4 202 4.1 Algarve 5,195 3.4 163 3.3 Total 152,795 100.0 4,930 100.0 Source: PMA (El) The two regions of Beira Litoral and Ribatejo e Oeste together raise 81.0% of broilers and 66.8% of laying hens belonging to the industrial and semi-industrial sector in Portugal. 58. Poultry production is highly concentrated in a rather limited number of modern operations: ANNEX 3 - 67 - Page 20 Chicken Production in Portugal Units Production Size of Units Number Z Tons Z + 500,000 birds per year 22 0.8 24,906 16.3 250,000 to 500,000 43 1.5 17,877 11.7 50,000 to 250,000 337 11.8 36,671 24.0 Less than 50,000 2,444 85.9 73,340 48.0 Total 2,846 100.0 152,794 100.0 Source: PMA (EL) The semi-irdustrial sector (including traditional famil aize operations) still controls almost half of national chicken production. 59. Egg production is still more concentrated, as shown in the following table: Egg Production in Portugal Operations Birds Productiort Size of Units Units Z Million X Million eggs % More than 5,000 birds 185 - 3.95 49.8 888 68.0 Less than 5,000 birds 599 - 0.98 12.4 176 13.5 Traditional - - 3.00 37.8 240 18.5 Total 7.93 100.0 1,304 100.0 Source: PMA (El) Genetic Stock and MultipLication 60. One-day-old chicks designated for br_iler production are supplied to the fattening operations by 48 specialized producers, of which 36 (75X) are located in the two major poultry regions (Beira Litoral and Ribatejo e Oeste). These private units are managed according to international standards. Each multiplication unit raises an average of 32,000 selected parent stock hens. Although the proportion of parent stock raised in Portugal has increased since 1973, when all of it was imported, only 198,000 hens were raised from portuguese parent stock in 1981 (221), while the rest (78X) were imported through international suppliers. Selection and multiplication units operate their own incubation facilities, whose capacity is estimated to be 4 million eggs a week. 61. Sexed-one-day-oldchicks designated for egg production are being produced by 7 specialized multiplication units located in Beira Litoral and Ribatejo e Oeste out of parent stocks imported live. These units raise 58,000 ANNEX 3 -68 - Page 21 reproductive hens (1980), which production serves as replaceln6ctsfor the 4.9 million laying hens existing in the industrial productive sector (para. 59). Technical Coefficients and Production Estimates 62. Chicken are slaughtered at 8-9 weeks of age and 1.8 kilos liveweight. In 1981 the national poultry production was estimated to be 152,800 tons. Hybrid laying hens raised by the industrial sector produce an average of 215 eggs a year while traditional birds lay only 80 eggs a year. Thus both sectors produced 1,305 million eggs weighing 63,525 tons in 1981. Since poultry production was only 54,28 tons in 1971, the output of this sector almost tripled (2.8 times) between 1971 and 1981. In the meantime, egg production increased 1.7 times, from 37,200 tons in 197 to 63,525 tons in 1981. Productive Systems 63. There is a clearcut distinction between traditional family-size production systems and modern industrial poultry operations. The traditional system, which is found throughout the country, supplies almost 20Z of the eggs and 48Z of the chickens produced. It relies essentially on fodder produced on the farm, and its output is almost exclusively for self-consumption. On the other hand, the industrial sector, established during the last 10 years, supplies the bulk of the production; it is highly specialized, mechanized, and nonintegrated with agricultural operations, since it relies exclusively on the supply of concentrated feed. In 1981, 1,049 thousand tons of concentrated feed for poultry (28.8% of tota production) was supplied to the industrial poultry sector. It is estimated that th overall consumption index of this sector would be 2.5 kilos of concentrate per kilo of liveweight produced. This relatively low level of performance is attributed mainly to the poor quality of the concentrate. Production Costs and Farm Gate Prices 64. The industrial poultry production system has standard production costs, which can be summarized as follows: Costs of Poultry Production (March 1983) Chickens (per bird) Eggs (per hen) Escudos X Escudos Z One day chick/laying hen 20.00 14.7 201.00 17.7 Concentrate 86.00 63.2 778.75 68.5 Labor 3.00 2.2 40.50 3.6 Energy and water 4.50 ) 28.80 ) Litter and disinfection 3.50 ) 9.9 ) 3.6 Medicines and vaccines 3.50 ) 7.50 ) Miscellaneous 2.00 ) 4.20 ) Financial & amortization 13.50 9.9 75.50 6.6 Sub-total 136.00 100.0 1,136.25 100.0 Final cost (- 3Z mortality) 140.00 Cost per kilo liveweight (1.85k) 75.70 Farm gate price 90.00 1,185.60 a/ Net Income 14.30 15.1 49.35 4.2 Source: Information provided to the mission - 69- ANNEX 3 Page 22 Slaughtering and Processing Industry 65. There are 192 private poultry slaughterhouses in Portugal, with a total processing capacity of 199 thousand tons a year. Of these plants, 137 (71%) are located in the Beira Litoral and Ribatejo e Oeste regions. Eggs supplied to consumers by the industrial production sector have to be processed through inspection and classification centers. There are 53 such centers in Portugal, 33 of them (67%) being located in Beira Litoral and Ribatejo e Oeste regions. International Trade and Per Capita Consumption 66. In 1981, the international trade balance was very low for chicken meat (139 tons imported, against 270 tons exported), while no trade was registered for eggs. With a population of 9.48 million people, the per capita consumption of poultry reached 18.5 kilos in 1981, of which 16 kilos were from chickens, 0.7 kilo from culled laying hens, and 1.8 kilos from turkeys. This consumption standard is high, as the overall average is only 10.2 kilos in the EEC. On the other hand, with only 130 eggs per capita a year, Portuguese consumers are still far below European consumption, which reaches 240 eggs per capita a year. II. MAJOR CONSTRAINTS TO LIVESTOCK DEVELOPMENT A. Land Tenure System Distribution of Livestock According to Farm Sizes 67. Tables 3 and 4 of this Annex are basic documents which should be used when planning any action or project dealing with livestock in a country like Portugal. Although these tables were based on the 1968 census, they are still representative of the current situation in the livestock subsector. Distribution of Cattle According to Farm Sizes in Portugal 1968 Census (Percent) Cattle Area - 1 ha 1-4 4-20 + 20 - 1 ha 1-4 4-20 +20 Entre Douro e Minho 19.3 46.4 30.9 3.4 9.1 32.6 42.3 16.0 Tras-os-Montes 7.0 17.7 53.5 21.8 1.4 12.1 46.8 39.7 Beira Litoral 23.9 50.4 23.4 23.0 9.6 34.7 36.1 19.6 Beira Interior 3.6 22.1 45.0 29.3 1.3 11.1 32.1 55.5 Ribatejo e Oeste 9.5 38.3 27.8 24.4 3.4 15.5 20.3 60.8 Alentejo 2.3 6.9 12.7 78.1 0.3 2.0 7.6 90.1 Algarve 4.2 21.5 45.5 28.8 1.0 10.4 33.5 55.1 Total 13.8 33.8 28.9 23.5 2.5 11.7 22.8 63.0 Source: INE - 70 - ANNEX3 Page 23 Concentration of Cattle in the Smaller Farms 68. One of the most important facts revealed by the distribution of cattle according to farm sizes (Tables 3 and 4) is that most of the herd is concentrated in smaller operations. Very small farms (less than 4 ha) raise almost half of the cattle in the country although they crop only 14% of the agricultural land. Medium-size farms (on the Portuguese scale, 4 to 20 ha) raise 30% of the cattle on 23% of the agricultural land, and larger farms (more than 20 ha) raise 24% of the cattle on 63% of the agricultural land. Proportion of Farmers Raising Cattle 69. Out of a total of 808,000 farms, only 225,000 (28%) raise cattle (Table 2). Although small farmers who raise cattle keep a large number of them in relation to the area they crop, the proportion of small farmers (on farms of less than 4 ha) raising cattle is lower than on larger farms (up to 20 ha). Stocking Rate 70. Estimation of the stocking rate is the best way to appreciate the capacity of different types of farmers to supply their cattle with the required amounts of fodder. As an average, this rate ranges from 7 head of cattle per 100 ha in large farms (over 20 ha) to 106 head of cattle per 100 ha in very small farms of less than 1 ha - that is, the stocking rate is 15 times higher in smaller farms than in the larger unes. Regionally, this dispersion is even higher, with 2 head of cattle per ha in the smaller farms of region 1 (Entre Douro e Minho) and a stocking rate 21 times higher in smaller farms than in larger farms in region 3 (Beira Interior). Herd Size 71. Surprisingly, cattle herd size is relatively uniform in all farms smaller than 20 ha, where it averages 3 to 4 head of cattle regardless of the size of the farm (Table 2). Only farms larger than 20 ha have a larger herd, averaging 16 head. This means that 94% of cattle herders raising 76% of the cattle, keep a herd of a limited number of cows, whatever may be the actual carrying capacity of their land: these 3 to 5 head of cattle (2 to 3 cows) are considered as the adequate size of herd to be kept, either for managerial, labor, or financial reasons. This observation shows that creation of larger dairy production units, which are assumed to be more economical by some technicians, is not viewed by farmers as the best choice. In the design of a development project, this tendency should be taken seriously since it means that involving larger farms in dairy production does not necessarily mean that the farmers will choose to raise larger numbers of cows. Consequences of this Situation 72. In livestock production and, more precisely, in cattle raising, most of the animals are being raised by small farmers who are already short of land for essential cash and self-consumptioncrops. On the other hand, large farms, which present most of the forage potential, raise a relatively reduced number of animals. This results simultaneously in a shortage of fodder to cover livestock requirements of smaller farms and in poor utilization of the ANNEX 3 - 71 - Page 24 forageproduction potential existing in largerfarms. This situationexplains (a) the relativelylow performanceof livestock;(b) the poor intensification of forageproduction; and (c) the progressiveexhaustion of soils in specializedlarge size wheat growing farms that are not suppliedwith an adequateamount of manure. ChoosingTarget Groups of Farmers 73. The distributionof livestockaccording to farm sizes shouldbe taken into account in planningany actionor projectaiming at developing production. The dispersionof livestockaccording to farm size shows that using "averages"in terms of farm area or herds leads to confusion. It is obvious,for instance,that any projectdealing with cattle productionin the major dairy productionregions (1 and 3) should be directedtoward the smaller farms where most cattle is raised,whereas in Alentejo (region6) such a projectshould includelarger farms. Alleviatingthe Effectsof High StockingRates in SmallerFarms 74. In order to compensatefor the high stockingrates existingin smallerfarms, it is recommendedto (a) develop their current forageoutput throughthe adoptionof intensivecrop rotationsystems, the use of fertilizersand improvedseeds, and the establishmentof cooperativelymanaged mechanizationfacilities (forage harvesting and storage);(b) facilitatethe marketingof unproductiveanimals (replacementfemales, fattening stock) which would be transferredto larger farms or to regionswith underutilizedforage potential;and (c) supply small farmerswith cheap and good-qualityforage that is producedin excess on larger farms,whenever possible. DevelopingLivestock Production in Larger Farms 75. Since livestockproduction plays a differentrole in largerfarms that it does in smallerfarms, any attempt to develop livestockin this sector shouldbe designedaccordingly. One of the reasonswhy large farmershave not stronglyparticipated in livestockprojects in the past might be because they would not be interestedin undertakingon a largerscale the type of livestock operationscarried out by small farmers. Therefore,it is suggestedthat specificprojects be designedfor larger farmers (includinglivestock operations,which do not requireas much commitmentas dairy production does). Raisingand fatteningyoung animals is the kind of operationwhich could be easily undertakenby larger farmersin Portugal,provided that cooperativeorganization would take care of the overallmanagement of the operation. AdditionalProblems 76. The subdivisionof very small farms into differentparcels (6.4 plots per farm as an average in 1968) is especiallycounterproductive to livestock production,no matterwhether green forage has to be harvestedor grazed. Frequenttransportation is necessarybetween the farm (generallylocated in a village)and parcels scatteredaround it. Land consolidation,although difficultto implementand costly,should be undertakenin order to resolve this issue. On the other hand, most of the low-productiverange lands are rentedfor a low fee (Esc. 150 to 200 per ha) on a long-termcontract. It is doubtfulthat any expensiverange improvementinvestment would be undertaken eitherby the owner (who could not manage the investment)or by the tenant (on -72- ANNEX 3 Page 25 a land he does not own). Solutionsto this rental limitationinclude (a) agrarianreform; (b) voluntarysale of unexploitedland under the pressure of a well-designedland tax policy; or (c) the promotionof long-termleasing contracts. B. Integrationof Livestockwith AgriculturalCrops 77. Livestockis integratedwith agriculturalcrops when (a) fodder crops are being includedin the overall cultivationrotation of the farm; (b) the gross incomeof the operation (includingfamily consumption)does not include more than two-thirdsfrom one productor the other; and (c) manpower can be easily switched from one sector to the other accordingto requirements. Although,large segmentsof Portugueselivestock are very well integratedwith agriculturalproduction, most projectsdesigned in order to develop milk, mutton,and pork productionin Portugalare set up in large specializedunits that are poorly integrated(or not at all) with agriculturalcrops. 78. The lack of integrationbetween livestockand agriculturalcrops is particularlyobvious in operationssuch as industrialpoultry production,pig fattening,some sorts of dairy and beef fatteningsystems that are based exclusively(for poultryand pig fattening)or almost exclusively(for dairy and beef fattening)on the use of concentrates. There are also systems that, although they use a major proportionof forage grown on the farm, are not integratedwith agriculture. It is the case, for instance,(a) for specializedlivestock operations (meat, beef) that are based on irrigated pastures (Mira perimeter)and that, for not being integratedwith agricultural crops, do not make the most efficientuse of the existing resources;and (b) for extensivegrazing operations that are carriedoust exclusively in natural cange and pasture (Tras-os-Montes,Beira Interior)and that, not being integratedwith agriculture,are not reliableand have a low productivity. ( AgriculturalIntegration of Pasture Production 79. Rainfed range production in Mediterraneanareas shows huge variations. These variationsare (a) seasonal (120 kilos of dry matter per ha per day producedin April at Elvas, against no productionat all in August); and (b) between years (accordingto the dates of the first rain in autumn and last storms in spring). The fodder output per ha may vary in a proportionof I to 2 from one year to the other. In these circumstances,it is essential that herdersmay rely on additionalresources that could be fed to livestock (a) in average years, during summer; and (b) in very dry years, even in early winter and late spring. 80. Presently,these additionalresources are provided (a) by wheat by-products(fallow, straw, and stubble) in meat productionsystems (cattle and sheep)existing in the Alentejo region;and (b) by irrigatedsummer forage crops (maize)in dairy productionsystems (ewes and goats) observed in the eastern part of the country. Unfortunately,(a) wheat by-productsare getting scarce because cereal crops are being abandonnedin marginal areas (it is estimatedthat wheat was planted on •32 thousandha in 1976 and only 366 thousandha in 1982 (-31Z);while (b) in the limitedexisting traditional irrigatedareas, forage cultivationsoften have to compete with higher value- added crops. The limitationsmet in producingsupplementary fodder are the major reason for the low use of range for grazing and the lack of incentive for fanmersto undertakeinvestments in this sector. They explain why, in a paradoxicalway, during the last decade, the reductionof area of marginal cereals (which could have supposedlyfreed more space for grazing) provokeda lower use of range for grazingand a reductionof sheep and goat flocks in the country. ANNEX 3 73 Page 26 81. It has been estimated that it is possible to increase the area of rainfed permanentpastures sixfold, from 169,000 to 956,000 ha (para. 16). To be effective,such a reconversionimplies that around one third of the final forage unit incrementis being supplied to animals from other sources during the dry season. Wheat cultivation is not likely to be expanded and the irrigatedarea used for forage productionwill not increase. Therefore, the implementationof the rainfed pasture potential in the country will only be possiblewhen complementedwith a system able to provide forage which could be harvestedand stored. The most economicalmethod for producing such additional resourcesis to includeannual winter forage cultivation in the rainfed wheat productionrotation areas. Such annual forage crops could be establishedon 448,200 ha insteadof the present 226,600 ha (para. 16). 82. Any attempt to develop range and pasture production should be planned in operations includingboth range and pasture developmenton the slopes and marginal soils together with the improvementof agriculturalrotation on the best lands. It is recommendedthat any pasture establishmentand range land improvementprogram be set up together with the necessary complementaryforage productionsystem. Given the fact that silage making is less costly than hay making while it supplies a fodder of more nutritive value, this technique should be developed in these operations. It is now almost exclusivelyused with irrigatedsummer forage crops (maize). AgriculturalIntegration of IrrixatedForage 83. There are 89,800 ha of irrigatedforage in Portugal, including 43,700 ha of permanentpasture out of 700,000 ha of irrigated land (13Z). It is proposed to increase this area to 188,000 ha (para. 16), including 61,900 ha of forage crops, 91,900 of temporarypasture (less than 5 years in duration),and 34,000 ha d'fpermanent pasture. It is well known that forage crops are easy to include in intensive irrigatedcropping systems in diversifiedfarming operations. They would include winter legumes (berseem) and grasses (barley,annual rye grass) as well as summer forage production (sorghum,maize). 84. Temporaryand permanent irrigatedpastures are more difficult to justify, given alternative summer utilizationof irrigationwater in the country. Growing irrigated pastures to produce meat and eveiumilk may be difficult to justify financially,and above all, economically. The technical justificetionsof the "livestockpotential" of irrigated perimeters such as that of Mira, which should supposedlybe used in specializedcattle operations (milk and beef), are questionable. It rather seems that establishing temporaryand permanentpastures in such perimeters is dictated by (a) the excessive size of units, which hampers any intensivemanagement; (b) the lack of research regardingother land-use possibilities(fruits, vegetables);and (c) the lack of marketing and credit facilitiesfor agriculturalcrops. AgriculturalIntegration of Pig Raising 85. As previouslystated (para. 39), the modern pig raising sector is feeding animals (reproductivestock, as well as fattened pigs) with a diet exclusivelyconstituted of concentrate. This orientationis not adapted (a) to the situation in Portugal,which has to import 95Z of the raw material used in the productionof concentrates(para. 21); and (b) to the physiology of pigs, which makes them able to assimilate efficientlystarch supplied by crops such as potatoes,forage beets, and similar crops that could be produced by Portuguese farmers. ANNEX 3 - 74 - Page 27 86. It is thereforerecommended that an agriculturallyintegrated pig raisingsector be created that will supplybetween 40% and 50% of pig requirementsthrough agricultural crops includedin the croppingpattern of the farm. In the meantime,specialized reproductive units supplyingthe fatteningsector with weaned pigletswould undertakethe productionof hybrid breedsof pigs geneticallyprepared to respondefficiently to such a diet. Use of Agriculturaland Agro-IndustrialBy-Products 87. Given the structuralfodder deficit of Portugal,which has to rely on importedfeedstuff for 25% of its .vestockrequirements, the collection, treatment,and utilizationof agro-industrialby-products that could be assimilatedby livestockis of great interest. These include (a) cereal by-productsalready used in animal feeding(straw, bran, etc.); (b) by-productsof wine and oil industries(grape pulp and seeds,olive pulp); (c) by-productsof the juiceand canning industry(oranges, tomatoes); (d) by-productsof the slaughterhouseand processingindustry (blood, offal, dead animals);(e) by-productsof the fish canningindustry; and (f) by-productsof the sugar industry(molasses and pulp when processingsugar beets). Most of these productscould be used either plain or mixed with other ingredients, with or without previouschemical and physicaltreatment (caustic soda, ammonia treatmentof straw). It is recommendedthat a specialstudy be undertakenon this subject in order to establishthe availabilityof such by-productsand the economicalfeasibility of theirincorporation in animal feeding. C. Marketing, Prices, and Subsidies Marketingof LivestockCommodities 88. Accordingto specificstudies discussed above, the marketingof livestockcommodities is managedbasically under the law of supplyand demand. As far as meat productionis concerned,the JNPP (para.36) decides upon interventionprices. When the farm gate pricesare lower than the minimum interventionprice, the JNPP is supposedto purchaseand store the excess of supply,which is then marketedwhen the farm gate prices reach the maximumintervention price. When domesticproduction is not sufficient,the JNPP is authorizedto import. In addition,dairy processingand retailingof fluid milk is highlysubsidized. The nationwidefixing of milk farm gate prices,which is decidedby the JNPP in consultationwith the processing industry,thus looks rather like a price control. 89. Marketingsystems vary to a large extentaccording to the levelof integrationbetween producers and processors. Milk marketingis the better integratedbecause cooperatives collect 85% of the amount channelledto the industry. The industrialproduction of poultry,eggs, and pigs (which supplies50%, 20%, and 20% of the nationalproduction, respectively) is reAativelywell integratedwith the concentrateindustry and the slaughtering sector. Unfortunately,the existenceof a very large number of nonintegrated small producersresults in a great uncertaintyin the market, essentiallyfor eggs and pork production. Given its dispersion,cattle and sheep production is even less organized. Its marketingis controlledby numerousmiddlemen who take advantageof the lack of marketingfacilities, of farmers' disorganization,and of the farmers'lack of information(trading on the hoof insteadof payingon a liveweightor carcassweight basis). ANNEX 3 Page 28 90. Farm gate prices of livestockcommodities have shown important fluctuationsin constantprices during the last 10 years (see table 41 in statisticalappendix). Farm gate prices for milk show a relativestability in the long run, although their real value may fluctuate30% from one year to the other. Poultryproduction (meat and eggs) has suffereda progressivefarm gate price reductionduring the period,since in 1980 it was worth only 50Z of its 1973 value in constantterms. For these commodities,the fast development of productionencouraged by the governmentsubsidies may have reachedthe capacityof the market at the present level of income. Pig farm gate prices show a standard3-4 year periodicity,which is usual for this commodity(para. 45), with peaks during the years 1976, 1979,and 1982. The overall stability of beef farm gate prices (only in 1981 the constantprice went 16Z down from the averageof the 8 previousyears) may be interpretedas the result of the higher involvementof the JNPP in the supplyregulation of this commodity. RelativePrices of Meat and Milk 91. In the long run, the trend has been a valorizationof the farm gate prices of meat in relationto wheat. The relationshipbetween lamb (liveweight)and wheat was 4.2 in 1969, 8.0 in 1978, and 10.5 in 1981. This trend shouldhave encouragedfarmers to replacemarginal cerealsby pasture. Unfortunately,given the dependenceof sheep raisingon wheat productionin the currentsystem of production,this is not what has happened(para. 80). Since 1969,meat prices have evolvednot only in relationto agricultural crops, but also in relationto each other: RelativePrices of Meat (Per Kilo of Liveweight) 1969 1972 1977 1981 Beef/lamb 1.5 1.2 1.1 1.0 Pork/lamb 1.3 1.1 1.0 0.6 Chicken/lamb 1.4 1.0 0.9 0.7 Source:Sanders These figuresshow that a completereversal in consumerdemand has taken place in Portugalduring the last decade,depending on the availabilityof the differentproducts and the incomeof the population. Lamb, which was poorly appreciatedten years ago, reached the highestvalue along with beef in 1981. On the other hand, pork and poultry,which were marketedalmost at the same price as beef ten years ago, were worth only two thirdsof the beef price in 1981. 92. It is the ratio between the farm gate price of beef and that of milk which theoreticallyorientates the cattleherder either towardbeef production - 76- PageANE 293 (keepingand fatteningthe offspring)or towardmilk intensification (marketingcalves as soon as possible). This relationshipis high in Portugal when comparedwith Europeand even higherwhen comparedwith the United States. Price Ratio Between Beef and Milk Portugal(Escudos) France (Francs) USA (US$) 1973 1982 1981 1983 Beef (per kilo or lb liveweight) 29.48 122.38 8.96 60 Milk (per kilo or lb) 3.44 19.15 1.21 15 Ratio 8.57 8.11 7.40 4 Source: INE The Portugueseratio expressesthe shortageof beef on the market. It certainlyleads to a massive slaughterof heifers,which would be kept by farmers if the ratio was more favorableto milk, but it does not lead to a massive increasein beef productionbecause no cheap beef fatteningsystem is availablein the country. LivestockFarm Gate Prices in Portugaland the EEC 93. The comparisonof Portugueseand EEC institutionalprices for livestockproducts (table 49 in statisticalappendix) shows that in 1982-83, the Portugueseintervention farmgate prices were 70X of these applied in EEC countriesfor pig, 902 for beef and sheep and O7% for milk. Nevertheless,if the amount of subsidiesenjoyed by producerswere includedin these prices, all Portugueseintervention farmgate prices would be higher than those prevailingin EEC countries. Consequently,in the event of the entranceof Portugalinto the EEC, where such subsidieswould have to be phasedout, the only productionsystems which would keep a comparativeadvantage in relation with EEC producerswould be those which only requirea limitedamount of imputscurrently subsidized. ImprovementsTo Be Undertaken 94. Improvementscould be broughtabout in marketingin THe fields of the informationof farmers,the regularizationof the market,the existenceof meat handlingfacilities, and the organizationof production. Given the impactof marketingand pricing in the developmentof livestockproduction, it is recommendedthat a study be undertakenof the meat marketing,slaughtering, and processingsector in Portugal. This study would probablyresult in recommendationsdealing with (a) the creationof regionallive animal markets that would supply herderswith accuratemarket reports;(b) the improvementof the JNPP operationswhich could include(i) the cessationof direct slaughterhousemanagement; (ii) more autonomyand flexibilityin its interventioncn the market; and (iii) more contractualoperations with both producersand privateenterprises (slaughterhouses, cooled storage);tc) the developmentof meat handlingand cold storagefacilities (cooled stores, trucks)under the managementof privateenterprises; and (d) the organization of productionthrough production contracts (cooperatives, industry) in order to schedulesupplies according to demand. ANNEX 3 - 77 - Page 30 Subsidiesto ConcentratedFeed 95. The major productionsubsidy received by the livestocksubsector in Portugalis that applied to concentratedfeed, of which 3.5 million tons were producedin 1980. While the cost of these concentratesis rounded to Esc. 35,000million, subsidies reached Esc. 5,070 million (15%). Ir,the highly industrializedlivestock production systems (poultry, eggs), feedingcosts rangebetween 60% and 70Z of the total costs. Therefore,in these systems, subsidiesrepresent a maximum of 9Z to 10% of the total costs. It shouldbe stressedalso that in many productivesystems (family-size milk production, sheep),which rely much less on concentrates,the impact of this subsidy is even less important. On the other hand, it should be recalledthat the cost of raw materialsused in making concentrateswould be 35% higher if they had to be purchasedfrom the EEC insteadof on the internationalmarket. In this case, the simultaneoussuppression of the subsidyand the purchaseof raw materialon the Europeanmarket would resultin an increaseof the price of concentratesof around 57%. 96. Althoughsubsidies for concentrateshave been extremelyefficient in buildinga modern poultryand pig raising industry,their negativeside effectscan be summarizedas follows:(a) while supplyinglivestock production with artificiallycheap forage units, subsidiesfor concentrateshelp expensivefeedstuffs (cereals, oilseed cakes) to competewith forage,thus discouragingforage intensificationand development;(b) since utilizationof concentrateshas freed livestockproduction from agriculturaloperation, these subsidieshave encouragedthe creationof productivesystems not integrated with agriculturalcrops and relyingessentially on importedfeedstuff which have to be paid for in hard currencies. This is especiallycounterproductive for animal speciesthat can be partlyor totallyraised out of forage. 97. Since part of the Government'sobjective in subsidizingconcentrates has been reached,the distortioncreated by this policy,added to the heavy burden it representsto the budget,should be corrected. The progressive reductionof these subsidiesis recommended,and eventuallytheir entire removal. Apparently,the increasein pricesof concentratesthat would resultwould be relativelydifficult for the productivesector to absorb, especiallywhen raw materialwould have to be purchasedon the European market. This absorptionwould include (a) better technicalmanagement (in poultryproduction); (b) the diversificationof the diet (in pig raising);and (c) the intensificationof forage production(in cattle production). Such a decisionwould certainlylead to an increaseof farm gate (and therefore consumer)prices. Subsidiesto Dairy Products 98. In 1980, 503,000 tons of fluid milk were suppliedto Portuguese consumers. This milk receivedheavy subsidiesin amountsvarying according to the differentproducts (para.30). Subsidieswere also providedto the productivesector. In 1980, dairy subsidiesamounted to Esc. 4,469 million, of which Esc. 3,257 million (73X) were suppliedto fluid milk, Esc. 427 million (10%) to importedcheese, and Esc. 195 million (4X) to mechanical milkingand cold storage. - 78 - Page 31 99. The social efficiency of consumption subsidies is questionable since, usually, the consumers (living in urban areas) who benefit from subsidies are not necessarily those (living in rural areas) who have the lowest income. On the other hand, apart from competing with productive investments in the budget, such subsidies present counterproductive side effects. Given the fact that often the consumer subsidies to be paid to the processing sector are not reassessed in due time and are paid after several months of delay, dairy plants are usually more attracted by unsubsidized high value-added products allowing a faster financial turnover. Thus, they easily neglect to develop a market for subsidized products which, in the case of fluid milk, represent the major outlet for dairy production. At a certain stage, this could harm production itself. 100. The progressive reduction of milk consumption subsidies should be envisaged. Such a reduction would probably not lead to major problems in terms of demand. In order to guarantee a longer preservation period, milk proceeding from the Azores is ultra-pasteurized instead of being merely pasteurized. Although ultra-pasteurization is more expensive, ultra-pasteurizedmilk receives a lower subsidy than pasteurized milk (Esc. 7.85 compared with Esc. 11.45 in 1982). This results in a retail price 50X higher for ultra-pasteurizedmilk (Esc. 26.50 compared with Esc. 17.50 for pasteurized milk in 1982). In spite of this great retail price discrepancy for very similar products, the consumption of ultra-pasteurized milk has increased from 240 tons in 1975 to 6,607 tons in 1980 (an increase of 28 times in 5 years). D. Government Services Animal Health Control 101. Portuguese veterinary control seems to be efficient, as evidenced by the fact that no major disease seems to threaten the livestock industry, except brucellosis for sheep and goats and African swine fever for pigs. These two diseases have a high social and economical cosL in Portugal. Apart from that, while bruceliosis and ASF remain endemic in Portugal, potential importing countries will be able to protect their markets by building up sanitary barriers. Given the potential demand of the European market for "minority products," such as ewe cheese and some kinds of processed pork (sausages, ham), and the high value-added of such products for the Portuguese economy, the eradication of these two diseases should be considered of high priority (para. 42). Genetic Improvement 102. As stated previously, the attempts made to preserve local native breeds of cattle should be assessed carefully (para. 24). Genetic improvement through artificial insemination, breeding stations, and distribution of stock is a very expensive undertaking that should be carried out only when its usefulness has been well established. Although artificial insemination of cattle has been developing satisfactorily, now that it is well established cost recovery should be progressively introduced, at least for operations and maintenance. Such additional resources could be used to improve the quality of the service and its management which is questionable in view of the current increase in semen imports by private farmers. - 79 - ANNEX 3 Page 32 Credit Facilities 103. Although, theoretically, credit is made available to farmers, it is generally agreed between them, especially those managing small livestock operations, that credit supply is not suitable because (a) application forms are so complicated that they require the assistance of a technician to fill them out; (b) delays of credit supply are too long, especially for short-term credit; and (c) repayment schedules are not always adapted to the nature of the investment (in medium-term credit). Agricultural credit is being discussed elsewhere in this report. As far as small family-size units are concerned, they find it difficult to deal directly with the banking system. Some flexibility could be found in a procedure that would involve farmers associations (dairy cooperatives, for instance) in (a) the identification of credit requirements at farm level; (b) the establishment of the application procedure and its technical assessment; and (c) the repayment of loans through appropriation of part of the value of the production marketed through the cooperatives. Livestock Research 104. Although the current integration of extension witL the Portuguese research institution (INIAER) is supposed to correct the situation, livestock research seems to have been managed with very few links to extension. As is often the case, research topics seem to be chosen with little or no concern about the needs of extension and, reciprocally, exteision makes little or no use of the research findings. By its nature, livestock research has to be carried out for some time before reaching useful conclusions, is expensive, and can take advantage of eyperiments carried out in other countries more easily than agricultural crop research. It is therefore recommended (a) to limit the fundamental research in experimental stations to t'ueminimum, (b) to extend applied research in commercial farms where it could be directly used by extension; and (c) to concentrate o-n topics of immediate interest to the farmer. 105. The following topics could be studied in commercial flocks and farms under research management : (a) livestock production, including female reproductive cor.trol(breeding seasons), comparison between dairy breeds and industrial crossbreeding in beef production under commercial conditions, raising of pig hybrids able to be fed with some fodder produced on the farm etc.; (b) forage production, including use of agricultural by-products in livestock feeding, toxicity of some legume forages (estrogens, alkaloids), macro and micro element deficiencies in pasture establishment, range and pasture management (grazing, maintenance) under different circumstances, etc.; (c) financial studies linked with a farming system study assessing the financial viability of different productive systems and their alternatives, such as milk or meat specialization in sheep raising, beef or sheep production on grazing lands, specialized livestock operations or integrated operations in irrigated perimeters, pigs fed exclusively with concentrate or with a mixed diet, etc. Livestock Extension 106. There are 634 extensionists distributed in the seven agricultural regions of the country (Annex 6), of which less than one-third have probably been trained to spread livestock technology through extension. ANNEX 3 - 80 - Page 33 LivestockExtension A-tivities in Portugal (Estimatesfor 1983) Existing Farms Involved Contact % Contact/ Farms by Extension Farmers Existing Beef production 202,000 1,730 383 0.2 Dairy production 102,000 1,863 563 0.6 Dairy sheep 70,000 326 178 0.3 Lamb production 100,000 993 249 0.3 Source: INIAER No efficientextension activity could be carried out with a ratio of one extensionistto aLmost 2,000 herdersand one contactfarm to 200-500herders. It is readilyacknowledged that small family-sizedairy producersand sheep herders are never contactedby extensionists. INIAER is carryingout in region l(EDEM)a one-weektraining courses programwhich is likely to representa good complementto field support for farmers. 107. The effectivenessof livestockextension could certainlybe improved through (a) the improvementof the extensionmethodology through, for instance,the operationof extensionagents accordingto the existingdairy cooperativenetwork; (b) the establishmentof an adapted technicalpackage throughthe reinforcementof linkagesof researchwith researchand the developmentof "referencefarms" in which practicalresearch would be carried out; (c) the establishmentof a specializedlivestock extension support staff (subjectmatter specialists);and (d) the permanentfinancial and economical screeningof technicalrecommendations supplied to farmers. The establishment of a livestockdevelopment organization such as the one describedin a project brief presentedat the end of this Annex would lead (a) to a closer reiationshipbetween extensionists and farmers; (b) to the integrationof extensionwith inputs supply,credit, services, and marketing;and (c) possibly,to its progressivecost recovery. LivestockSubsector Monitoring 108. Althoughbasic statistic3ldata related to livestockproduction are available,it seems that their flow and processingcould be improved in order to supplypolicymakers with accurateinformation on the currentsituation. Discrepanciesexisting on the populationof sheep flocks,which is estimated to range between 2.0 and 3.8 millionhead accordingto INS or JNPP, show why there should be closer coordinationof separateadministrations. Farm gate price informationis also essentialto induce farmersto proceedwith the necessaryinvestments. Therefore, it is essentialthat the collectionof statisticaldata be improved. ANNEX 3 - 81 - Page 34 Livestock Subsector Development Planning 109. Livestock development projects under preparation (referred to in the project briefs included below could be substantially improved by introducing the following changes: (a) the macro-regional approach used in most of the Agriculture Development Plan studies i; not adapted to livestock planning. Estimating the potential increase of livestock at the regional level is ineffective because this increase has to take place in a set of existing farms which have their own productive systems and financial bounds; (b) the choice of target groups of farmers should be made according to the current situation. In the livestock subsector, the farmers to be included in any development program should necessarily be chosen among those who share the animals; (c) issues affecting the subsector should be identified carefully. It is doubtful that the supposed economy of scale based on rental labor justifies the establishment of large dairy farms in Portugal. It seems to be difficult, also, to justify the establishment of a highly industrialized pork raising sector (which commits the country for several decades) on the basis of the existence of African swine.fever (which could be eradicated as soon quite rapidly); (d) since they do not lead to the best utilization of existing resources, specialized livestock operations not integrated with agricultural crops, such as specialized dairy units in Entre Douro e Minho and Beira Litoral, or beef and sheep fattening units in Alentejo, should not be recommended. E. Prospects for Livestock Production Technical Coefficients and Productive Systems 110. Very often, technical coefficients such as fertility, milking yields, slaughtering rates, etc., are considered as the major causes for low production of livestock and are addressed as such. In fact, technical coefficients represent the features of particular productive systems. They cannot be dealt with independently from the farming systems of which they are apart. For that reason, livestock development planners should not worry so much about technical coefficients as about the changes to be introduced into the production system (size of operations, integration with agriculture, labor intensity, marketing, etc.) for the purpose of altering the current technical parameters of the operation. Cattle Production Ill. Given the structure of dairy production in the country, it is recommended that more milk production should be encouraged in the regions where it is already developed (Entre Douro e Minho and Beira Litoral) and in the sector that raises the major part of the herd (small family size operations). In the first stage of development, this sector has been supplied only with milk collection facilities and a consistent price policy. It is likely that if, in a second stage of development, this sector could be supplied with additional assistance such as extension, input supply, service (forage production and harvesting mechanization), and credit, it could perform even better and market between 50Z and 100l more milk than it does presently. Experience has shown that cooperatives, which already manage the milk collection and processing facilities, would be the organizations best suited to implement this second stage of development, including the diversification of services supplied to farmers. - 82 - ~~~~~AM~EX3 - 82 Page 35 112. Dairy intensificationcould be undertakenimmediately in the existing productivesector, which would certainlyrespond almost immediately. In the meanwhile,action shouldbe taken to developdairy productionon large farms, which usuallyhave a lower stockingrate per ha. The developmentof dairy productionin that sector would representa structuralchange in production systems. Therefore,it would requiremore time (5 to 10 years) before becomingeffective. Action to be taken to developdairy productionon larger farms is of a differentnature than is recommendedfor the intensificationof the already existingsmall-scale dairy sector. Basically,dairy production will develop on the larger farms of northern Portugal when the artificial competition of subsidies for concentrate will have been suppressed, leading to the spread of cheap forage-based feeding systems integrated with agricultural crops and not necessarilyirrigated. 113. It has been stressedthat most of the female calves (exceptthose which are raised for replacingculled cows) are being slaughteredwhen very young, rather than being raisedup to calvingage. This trend prevents the improvement of cow fertility through higher culling rates and herd development. It is due to the simultaneous influence of (a) high beef prices; (b) competition of young animals with milking cows in small dairy units; and (c) the nonavailability of a cheap feeding system able to supply young aninMIs with forage for the entire year. While dair" production should be intensified in the specialized area, annual forage crop cultivation and storage (silage) should be extended in the cropping pattern of rainfed wheat production regions (Alentejo), together with pasture intensification, to provide an adequate diet for breeding cattle. Given the relative complexity of the implementation of such a system (calf rearing and purchasing,mechanization of forage production,etc.), it could be managed throughcooperatives. 114. It is likely that the general trend observed in the long run toward a progressive replacement of local cattle breeds by exotic dairy breeds will continuein the future. As a result,beef will progressivelybe suppliedby a higher proportion of dairy breed males and culled cows. This does not prevent local cattle breeds from continuing to play an important role in the beef supply of the country,under the followingconditions: (a) cows of such breeds should be selectedin order to be able to supply crossbredcalves with enough milk; (b) these herds should be grazed on the improved pastures and range areas to be established in marginal areas, together with a form of agricultural integration which would supply fodder during the dry season; and (c) steers should be fattened through the semi-intensive forage systems defined in the preceding paragraph. Pork Production 115. As stated previously, top priority should be given to the eradication of African swine fever whose persistence would hamper any attempt to develop pork production and would even undermine its justification because, as long as the disease is observed in the country, no export will be possible for pork and pork products. Beside the benefits which eradication of ASF would ha-we for the existing productive sector and the public finances, the disappearance of this permanent threat to pork production would make it possible to set up a new productive system based on the specialization between breeding and fattening and the utilization of a fattening/feeding system that would include a proportion of products grown on the farm. This would lead to an increasing integration of the operation with ag.-iculturalcrops. - 83 - ANNEX 3 Page 36 116. Pork production is shared in Portugal between two productive sectors that have little or no communication at all: a traditional sector feeding low yielding local breeds with household by-products and an industrial sector feeding selected animals with concentrates. There is room, in Portugal, for a third technology, which would consist of family-size fattening units (each fattening a few dozen pigs a year) that would feed good performing stock with a diet including around 40% of staples (potatoes, beets) produced on the farm. This system would lead simultaneously to (a) save up to 40% of imported concentrate per kilo of meat produced; (b) provide an additional productive capacity at a minimal investment; and (c) diversify and increase the income of small farmers. 117. Technicians often complain about the existence of the traditional pig raising sector, which is altogether ineffective in terms of feed conversion, tends to amplify the fluctuations of fattened pigs on the market and thus of prices, and facilitates the propagation of ASF. Pig raising is a relatively difficult operation and fattening farmers would give it up easily, as they already have done in other countries, if they could be provided with weaned piglets selected to give the best results according to the requirements of the market and the diet they would be supplied with. The specialization between the selection/breeding operation, and fattening operation which would be carried out in separate farms is the best way to proceed to the modernization of Portugal's pork production sector as a whole. 118. The establishment of specialized breeding units providing weaned piglets to be fattened in family-size operations on a diet that would include crops from the farm would also contribute to saving a part of the concentrate presently required by low productive local sows. It would pave the way to the establishment of a contract production system managed by the processing industry in order to regulate the supply of fattened animals on the market and reduce the large price fluctuations currently observed. Sheep and Goats 119. Although their numbers might have diminished steadily in the past decade, small ruminant products should become the fastest growing livestock items in the future. As previously stated, this change will take place only when a reliable feeding system is available that makes it possible to take advantage of the currently underutilized potential of range lands in marginal areas of the eastern part of the country. For the reasons given above, since Mediterranean range cannot be exploited intensively without being integrated with complementary sources of fodder for the dry season, the system should include an agricultural cropping area either close by or distant from the range. In this latter case, sheep would have to be moved from one place to the other twice a year. 120. The ratio existing between meat and milk prices of small ruminants is around 4 while the production of one kilo of carcass weight requires between 13 and 20 times more forage units than the productior.of one liter of milk by sheep and goats, respectively. This means that always, when milk production is possible (fodder availability, marketing facilities), it should be preferred to meat production. The choice between sheep and goats should be made according to the environment and feeding conditions since goats cope more easily with harsher conditions than ewes do. - 84 - A 3 Page 37 121. In the case of ewe and goat cheese making, mechanical milking equipment should be provided through credit or collectively managed facilities in order to resolve the shortage represented by the lack and the cost of experienced shepherds. Although cheese making in family-managed processing units should be encouraged, the development of an industry oriented to export should include the est-',lishmentof cooperative industrial cheese processing factories similar to .hose already processing cows' milk in the northwestern area of the country. 122. To be fully justified, milk production of small ruminants has to result also in the development of meat production of lambs and kids, which have to be weaned as soon as possible. Autumn breeding would supply the bulk of lambs and kids early in spring. These animals could be fed on good-quality temporary pastures introduced in the wheat rotation up to the beginning of summer. Poultry Production 123. Although poultry production has been developing satisfactorily in recent years, the following actions are recommenided:(a) improvement of the productive sector through (i) the strengthening of cooperative organizations; (ii) the supply of modern poultry technology to family-size operations; and (iii) the development of selection operations and suppLiers of parent stocks, and even, grand parent stock; (b) standardization and quality control of production through (i) modernization of slaughterhouses and of egg inspection and classification centers; (ii) regulation of the uses of drugs and chemicals in concentrates; and (iii) the reinforcement of the hygienic control of the products supplied to consumers; (c) the improvement of production management through (i) the extension and training provided by cooperative organizations; and Cii)quality control of concentrates supplied to the productive units. ANNEX 3 - 85 - Page 38 LIVESTOCK SUBSECTOR PROJECTS AND STUDIES 1. MILK PRODUCTION INTENSIFICATION PROJECT Initiating Proiect Brief A. Project Objectives 1. riehemilk production intensification project would aim at (a) reinforcing the development of milk production that has taken place in the countirvduring the last ten years; (b) increasinigthe income of small family milk producingunits, which representthe bulk of milk producersin Portugal; and (c) improvingthe utilizationof existingresources (both naturaland institutional)through better integrationof livestockwith agriculture. This integrationwould lead to the improvementof agriculturalyields while reducing the need for concentrates. B. ProjectLocation, Areas, and PopulationBenefited 2. The projectwould be implementedin the two major milk supplying regionsof the country: Entre Doure e Minho (region1) and Beira Litoral (region 3). Together, these regions represent55,950 milk producers(65% of the total in Portugal),raising 157,700milking cows (58% of the total in Portugal)and producing485,000 tons of milk (61% of the total in Portugal). The projectwould extend rationaldairy productionmethods to the sector of small familymilk productionunits (1 to 5 cows) which, accordingto statistics,would represent90% of the total farms raisingdairy livestockin the countryand would supply 75% of nationalmilk production. 3. This group of milk producers was chosen as the project's target since (a) it is supposedto be very responsive,as shown by the fast developmentof milk productionwhich followedthe establishmentof milk collectionfacilities in the region; (b) projectmanagement could be undertakenby the existingdairy cooperatives,which have demonstratedtheir dynamism, while project actions could be implemented through the existing milk collection and milking network; (c) these farmers already apply a rather integratedsystem of productionwhich could still be highly intensified;and (d) it is assumed that throughan action dealing simultaneouslywith the improvementof fecundity,nutrition, health and genetics,together with a slight increase in the number of milking cows, the production of this sector could be increasedby 50% to 100%. 4. Regions 1 and 3 include 1,213 cooperativemilking parlours(100% of the total in Portugal),1,248 milk collectioncenters (76% of the total in Portugal),1,274 privatemilking parlours (50% of the total in Portugal),and 15 milk concentrationcenters (44% of the total in Portugal). Cooperative milking parlourswould cornstitutethe channelof assistanceprovided by the project to milk producers. It is assumed that cooperative milking parlours average 30 farmers,90 cows, and a productionof 200,000liters of milk a year. Therefore,the 1,082 collectivemilking parloursinstalled in regions1 and 3 would include32,000 milk producers (58% of the region),and 97,000 milking cows (36% of the region)and would collectannually 220,000 tons of milk (45% of the region). ANNEX 3 - 86 - Page 39 C. Current Situation in the SubSector 5. Milk productionhas shown a fast developmentin Portugal in the two decades between 1960 and 1981, with productionincreasing from 329 thousand tons to 790 thousand tons (140%). This productionis highly concentratedin the three northwesternregions of the country, which altogetherrepresent 75Z of the milking cows, 76Z of the dairy producers,and 78Z of the total milk production in the country. Milk productionis undertakenby a majority of small farmers, with the average dairy operationconsisting of 2.0 cows in Beira Litoral, 2.4 cows in Entre Douro e Minho, and 4.3 cows in Ribatejo e Oeste region. 6. Two major productivesystems exist throughoutthe country: (a) family-size integratedproductive systems, in which cows are fed with agriculturalcrop by-products,small forage and pastureareas and, generally, a relativelysmall amount of concentrate;(b) specializeddairy operationsin which forage made available to cattle is being substantiallycomplemented by large amounts of concentrates. Due to the fact that forage productionand storage technologiesare generallynot mastered,dairy production is usually confined to regionswhere high rainfed pasture (northwest)or irrigated pasture (Ribatejo).or even the combinationof the two, is available. Shortcomingsin forage productionand storage lead to the use of large amounts of concentrates,.of which 283,000 tons were distributedto milking cows in 1981 (30% of the concentratethat was supplied to cattle). 7. Besides the establishmentof an efficientnetwork of milk collection and milking facilitiesundertaken by cooperativeson financingthat includes 401 from governmentsubsidies, no special extensionprogram has been carried out at farm level. This lack of extension, togetherwith the lack of credit facilities,and the poor availabilityof mechanizationthrough cooperativesor private enterprises,generally leads to shortages,such as: (a) a low fertilityof cows that is assumed to be less than 801; (b) a misuse of resourLesexisting at the farm level (labor, stock and forage, production, fodder potential);and (c) overall dairy productionyields that are believed not to exceed 2,700 liters per lactation in the case of small herders supplying cooperativemilking parlours (while the comparablenational average is assumed to be 3,600 liters). D. OnRoing Projects 8. Two projects have already been drafted in order to develop milk production in regions 1 and 3. The Entre Douro e Minho Region milk farming modernizationproject and the Beira Litoral dairy farm improvementproject were based on the assumptionthat, in order to be economicallyviable, dairy production should be undertaken in operations larger than 4 to 5 ha and should includemore than 10 to 12 cows each. The whole concept of these projects should be revised since (a) it seems impossible to implementa dairy intensificationproject in the larger farwm of the region (representing502 of the total area) while the major part ;fthe cattle is being raised in the smaller farms of the region (representingthe other 50Z of the total area); (b) the specializationtoward one L.inglecrop (accordingto the drafts, the whole farm area would be establishedinto pastures and forage crops) is ineompatiblefrom both agronomicaland financialpoints of view; (c) irrigationshould not be consideredas a necessaryfeature of dairy production in areas with rainfallsexceeding 600 mm; and (d) the productiveyield objectivesshould be decidedaccording to the requirementof limiting the use of concentratesas much as possible. - 87 - - 87 ~~~~~ANegXPage 403 9. The Tras-os-Montesrural development project financed by the World Bank includes the financing of 109 cooperativemilking parlours, credit to cooperativesfor storage facilities and vehicles, and credit for farm investments (purchaseof cattle, pasture establishment,and constructionof livestock shelters). It is clear that both projects could benefit from mutual experience, especially in respect of building an efficient network of extension aiming at intensifyingmilk production in small family-size operations. A permanent technical coordinationwould be establishedbetween the two projects through the existing milk processing cooperatives. E. Project Description 10. TLe project would simultaneouslyincrease the average cow fecundity, reduce calf mortality from 10% to 5%, improve lactation yields, and slightly increase the number of milking cows on each farm. (a) The average rate of fecundity would be increased from 80% to 95% through (i) the improvement of herd management (stable reproductiveplanning, heat control, etc.); (ii) better nutrition practices and health control (especiallyof those diseases leading to sterility problems); and (iii) the establishmentof a higher culling rate. 11. (b) Average lactation yields would be increased by roughly 30% (from 2,700 to 3,600 liters) through (i) health improvement (lodging and hygiene); (ii) better nutrition standards,especially during summer, through improved cropping patterns and forage storage (silage);and (ii:!) genetic improvement through greater utilizationof artificial insemination. 12. (c) The numbervof milking cows would be increasedby roughly 30% through (i) provision of calf rearing and heifer breeding facilities that would permit milk producers to keep only dairy cows; and (ii) forage intensification, which would result in the availability of more fodder at farm level. The combined influence of the above-mentionedactions would result in about an 80% increase in milk production of the beneficiariesat the end of the project. F. Proiect Components 13. The project would include six basic components,which would be managed by the milk producers' cooperativesthrough their milk collection centers and their cooperative milking parlours: (a) livestockextension would be provided by an organization including (i) one extensionist for several cooperativemilking parlours (one extensionistfor an average of 200 milk producers); (ii) a senior extensionist at cooperative level, supervising extension supplied through all milking parlours managed by the cooperatives (30 as an average); and (iii) a subject matter specialist team located at the regional level of FENALAC (National Federation of Milk and Dairy Products CooperativeUnions). 14. (b) Medium-term and long-term credit would be provided to farmers through the existing channels and financialarrangements so that they could purchase livestock,build shelters, and establish pastures. Cooperatives in charge of the project's implementationwould facilitate the supply of credit to project participantsthrough (i) technical assessment of credit applications; (ii) expediting transmissionof farmers' requests to credit authorities;and (iii) setting up an automatic reimbursementproceddre through appropriationfrom payments due to farmers for their milk supplies. ANNEX 3 - 88 Page 41 15. (c) Project Authority would supply farmers with all kinds of inputs related to forage growing, cattle raising, and milk production,such as seeds, fertilizers,concentrates, artificial milk for calves, and veterinary medicines. In order to facilitate this kind of operation,the cooperatives would be provided with the necessary facilities (storage and vehicles) as well as with a permanentrevolving fund which would be used on a short-termcredit basis and reimbursedas above through appropriationfrom payments due to farmers. The project input supply department would centralizeand process all financial informationrelated to the beneficiaries. 16. (d) Mechanizationof forage establishmentharvesting and storage is often necessary and cannot be properly achieved by animal-pulledvehicles (deep ploughing in heavy soils and silage making) due to the nature of the operation or due to time constraints. Because of the small size of their operation,milk producers supplying cooperativemilking parlours generally do not own tractorsand other implements. Cooperativeswould be supplied with equipment not already available from private or public enterprises,especially machinery that should be used for the introductionof new technologiessuch as silage making (silage harvesters,tipping trailers, etc ,. Financing and recovery of mechanizationservices supplied to beneficiarieswould follow the same procedure as describedabove for short-termcredit. 17. One of the major difficultieswhich small dairy producers are periodicallyfacing is to supply their herd with good quality replacement stock, since, at farm level, there is competitionbetween milking cows and replacementheifer in terms of fcdder availability. Herders are often obliged to sell young calves or to raise them under adverse conditions. The project would establish a service of calf rearing and heifer raising that could supply milk producerswith good quality pregnant heifers at reasonable prices: (a) calf rearing would be implementedfrom 8 days of age through artificial feeding with milk replacers in small rearing units of I to 2 dozen boxes that would be used 3 times a year for males as well as for females; (b) while weaned males would be marketed to fattening units, females would be raised by specialized contractorsfrom other areas (Alentejo)and returned to milk producers as pregnant heifers between 20 and 24 months of age. 18. Genetic improvementwould be undertaken through the greater use of artificial inseminationin all herds supplyingmilk to coops milking parlours. Since 110,000 out of 160,000 cows are already inseminatedannually in regions 1 and 3, it is assumed that around an additional 25,000 cows out of the 100,000 cows milked in cooperativemlnlking parlours should be included in the artificial inseminationprogram to be set up by the project. This program would be coordinatedwith a sterility control network operated by veterinians, who would also perform under the cooperative'sauthority all activities linked with disease testing (brucellosisand tuberculosis),vaccination (foot and mouth disease),and parasite control, mastitis control and bull progeny testing. G. ImplementationSchedule 19. Most elements of the technical package included in the project are clearly defined and would not require major preliminarystudies: (a) livestock extension methodologywould follow similar actions undertakenin agricultural extension in other countries;(b) the active participationof dairy cooperativesin credit supply and recovery is in line with activities currently carried out by CCCMS; (c) input supply is already undertakenby cooperativesin the region; (d) cooperativemanaged forage - 89 - ANNEX 3 Page 42 cultivation and harvesting mechanization is currently undertaken in other European countries (Brittany in France, for example) and study tours could be organized; (e) cattle weaning and raising is also implemented in those same cooperatives; and (f) artificial insemination and health control would follow the same standards as those currently implemented by the existing services in Portugal. 20. Project preparation, which could be carried out in 3 to 6 months would include (a) identification of cooperatives that members would agree on having inicluded itl the early stage of the project (around 30 dairy cooperatives can be found in the project area); (b) a survey at farm level in order to establish accurately a priority list of factors hampering production to be included in the extension program; and (c) a study on how similar facilities are being carried out in cooperatives in other countries of Europe, especially in areas where small-family size intensive units prevail. H. Project Costs 21. The project would include the following components at estimated costs as shown below: Million US$ Investments in project authority building 2.7 Operation cost in project implementation 3.5 On-farm investments (medium-term) 14.0 On-farm short-term credit 7.2 Miscellaneous - project preparation 6 man-months 0.7 technical assistance 12 man-months 1.5 study tours and training 0.5 price contingencies (30%) 9.0 Total 39.1 Assuming a foreigr.currency rate of 35%, the loan would reach US$13.7. It should be stressed that these figures are preliminary and could be considerably modified during preparation and at appraisal. I. Project's Strengths and Constraints 22. The implementation of the milk production intensification project would benefit from the following factors: (a) Dynamic and well-managed cooperatives are already operating in the area and would be immediately available for diversifying their activities toward project implementation. (b) Farmers have already a rather high technical skill in intensive dairy production and certainly would be willing to participate in a project which could substantially increase their income. (c) Natural conditions are rather favorable to dairy production in this part of the country, where a good specialized Frisian stock is already available and would only have to be improved. - 90- ANNEX 3 Page 43 23. On the other hand, in order to succeed,the projectwould have to overcomesevere bottlenecks, such as (a) the small averagesize of farms, which impliesa large numberof productionunits where extensionshould be performed,the absenteeismof many owners,who are often part-timeworkers, and, to lesserextent, the aging and illiteracyof farmers. (b) The relativelyhigh performancesof the currentproductive systems, whose improvementwould requirereaching a rather sophisticatedlevel in most dairy productiontechnical coefficients. (c) In spite of their efficiency,dairy cooperativeshave not been accustomedto implementingintegrated multi-.omponentprojects such as the presentone. Therefore,some managerial difficultiesmay appear at the early stage of projectimplementation. J. Project Benefits 24. Preliminaryestimates show that the projectcould result in a two-foldincrease in cattle productionin standard2 ha farms increasingtheir stock from 3 to 4 cows. In addition,it is assumed that most of the costs involvedfor projectauthority building and operationcould be recoveredsince (a) extensioncosts (estimatedto reach annuallythe equivalentof US$bO for each of the 20,000participants) would be recoveredthrough a fee applied on milk marketed (aroundUS 1 cent or Esc. L per liter); (b) short-term, medium-termand long-termcredit would be distributedunder the conditions prevailingfor these types of loans; (b) costs incurredby input supply, agriculturalmechanization, and calf weaningand raisingwould be recovered under normal commercialconditions; and Cd) it is proposedthat the cost of artificialinsemination and veterinarymedicine be recovered. 25. It is assumed that the projectwould result in increasingmilk productionby 144,000tons, which would representan increaseof 110X in relation to the presentproduction of projectbeneficiaries, 30Z in relation to the presentproduction in regions1 to 3, and 18% in relationto the nationaldairy productionin 1982. -91- ANNEX3 Page 44 LIVESTOCK SUBSECTOR PROJECTS AND STUDIES 2. SHEEP AND GOAT DEVELOPMENT PROJECT Initiating Proiect Brief A. Proiect Obiectives 1. Project objectives would be the following: (a) utilization of the large range potential existing in mountainous areas in the eastern part of the country; (b) development of livestock production (lambs, kids, and cheese) which are in demand on the European market; and (c) increase in income of family size rainfed farming operations. B. Project Location, Areas, and Populations Benefited 2. The project would be located in marginal mountainous areas in the eastern regions of the country (Regions 2, 4, 6 and 7), which represent 80% of the national permanent pasture and range production. These are rather poor areas in respect to soils and rainfall, where wheat production has already been abandoned or where it is being reconverted. The project would benefit rural populations living in these areas. Due to the labor requirements of dairy production, the project would be implemented in family-size units when dealing with ewe/goat milk production, unless milking mechanization is made available. C. Current Situation in the Subsector 3. Sheep flocks decreased 30% between 1955 and 1972 and 201 between 1972 and 1979. Goat flocks decreased also, although less abruptly. This reduction is mainly due to technological changes (reduction of marginal wheat cultivation followed by a shortage of by-products (fallow, stubble, straw) which traditionally supply the bulk of summer feeding to small ruminants. 4. Although farm gate prices are subject to great seasonal variations, they are high enough to permit the diffusion of more intensive, and therefore more expensive, techniques of production. 5. A reasonable amount of research has been carried out in the field of pasture establishment and its use by small ruminants. Unfortunately, thie diffusion of these techniques has been delayed by the lack of (a) adequate training of people in charge of the management of such resources; (b) financial feasibility studies at farm level; and (c' further research. 6. Although Portuguese cheese production (including all species) is marginal compared with EEC production (30 thousand tons and 3.3 million tons, respectively), its production of ewe and goat milk, which reaches 43 thousand and 60 thousand tons of milk, respectively, is quite important compared with France, for instance, where production is 60 thousand and 140 thousand tons of milk for each of these two species. ANNEX 3 - 92- Page 45 D. Ongoing Pro;ects A pasture and livestockdevelopment project was drafted in 1972 set. revised in 1978. This project aimed at reconvertingto pasture 260,000 ha ut land not suited for wheat productionin the Alentejo region. Unfortunately, the concept of this project should be revised since (a) its technical assumptionsare based on a single and limited experiment; (b) the project plans the reconversionto forage productionof the whole area of the participants'farms, which excludes the necessary integrationof livestock with agriculture;(c) the proposed project managementdoes not seem to be reliable;and (d) the size and cost of the project are not in line with the predictable incrementof production. 8. USAID is financinga research subprojectwithin the general framework of PROCALFER. This subprojectwould be implementedwith the technical assistanceof American universitiesand would undertake studies on (a) evaluationof reproductionand production performanceof selected genotypes of sheep and goats; (b) determinationof estrus and ovulation phenomenon in local small ruminants;and (c) evaluationof selected native and exotic breeds of sheep and goats and their crossbreeds. The implementationof this subproject would supply the investmentproject with technical informationthat could be tested immediatelyon commercial farms. 9. The Tras-os-Montesrural developmentproject includes important componentsof pasture intensificationand development of small ruminants at both research and implementationlevels. Therefore this project, as well, could be closely related to the sheep and goat developmentproject. E. Project Description 10. The sheep and goat development project would consist of the creation and/or the developmentof dual purpose flocks (milk auidmeat) of sheep, goats. or both. Taking into account the necessary standardizationof products to be exported and the special technicalskill required in cheese processing, the milk would be collected at farm level and supplied to specializedcheese processingcooperative units. 11. In order to adapt to situationsvarying considerablyfrom one region to the other, the project implementationcould be adapted according to (a) its geographic implantation(Tras-os-Montes, Beira Interior,Alentejo, Algarve); (b) productivesystems to be implemented (pastures included in the farm or rented from neighbors); (c) size of operations (from family to semi-industrial operation);and (d) its productionorientation (lambs, kids, milk, or both meat and milk). according to technicaland financial constraints. Nonetheless,project beneficiarieswould be selected among farmers involved in agricultureand able to link the sheep and goat raising operation with other crops in order to keep productivecosts low through the use of wheat by-productsand the productionof forages required during sumner. F. Physical Compositionof the Project 12. The project would be constitutedof several integratedoperations, each of which would include productiveherds and one cheese processing cooperative. It is assumed that each of these cooperativeswould reach a processingcapacity of 2,000 to 4,000 tons of milk a year (10,000 to 20,000 liters a day, 200 days a year). Therefore, such operationswould involve around 30,000 ewes producing lOC liters of milk or 12,000 goats producing 250 liters of milk, or a combinationof the two. - 93 - ANNEX 3 Page 46 13. Assuming that (a) a standard stocking rate of 4 adult small ruminants per ha of pasture or range land could be averaged; (b) that the land to be used as natural range or artificial pasture could reach 25Z of the total area; and (c) that only one fourth of the farmers included in the collecting area of the project would participate, each operation could be set up in a circle with a radius of approximately 20 km. 14. The project would aim at producing 5,500 tons of cheese, thus increasing by 20% the national cheese production of small ruminants . It would include ten integrated operations (3,000 tons of milk: 5.5 = 550 tons of cheese each). Each integrated operation wouli include an average of 150 flocks of 200 ewes. This average would be intermediate between a large number of family operations of 100 ewes on 25 ha of improved range and some semi-industrial operations of more than 500 ewes and more than 120 ha of range. Each integrated operation would be established by the cheese processing cooperative, which would be the implementing authority of the project. 15. The project authority within the cheese processing cooperative would deal simultaneously in an integrated manner with all major aspects of sheep and goat intensification, such as (a) milk collection (including collective milking parlours in some circumstances), cheese processing, storage, and marketing; (b) extension, in the fields of both range and flock management; (c) credit supply (the cooperative would coordinate the loan applications, would participate in the assessment of their technical justification, and would proceed with their reimbursement through appropriation of part of payments made to beneficiaries); (d) input supply (seeds, fertilizers, fences, and other products required for sheep and goat raising); (e) mechanization services (range improvement, pasture establishment, forage cultivation, harvesting and storage) when these are not already available through private companies; and (f) meat marketing through medium-term contract agreements for both culled ewes and goats and weaned lambs and kids (a fattening operation could be included before slaughter). G. Implementation Schedule 16. The sheep and goat development project would be implemented in three steps: The first step (studies and project preparation) would last one year and would include (a) contacts with major milk processing cooperatives dealing with cattle production in the northwest area of the country. These contacts would be carried out in order to identify cooperatives interested in expanding to other areas of the country while diversifying their activities toward the production of sheep and goat cheese; (b) identification of areas and farmers where the project could be implemented on a pre-investment basis; and (c) project preparation, involving the participation of high-level consultants fully experienced in the management of such kinds of operations in similar environments (France and Italy, for example). 17. The second step would represent pre-investment activities and would last one tLothree years according to the existing technical and administrative constrairuts- It would include the implementation of major range improvement, pasture establishrment,forage production, and flock management components to be included in tht:project. This implementation would be undertaken with the participation of a Lechnical assistance team which would be the core of the extension scheme to be created in the future investment project. The ANNEX 3 - 94 - Page 47 different technical operations would be tested on a dozen commercial farms spread throughout the project's area and representative of the major differences regarding (a) natural conditiorns(soil and climate); (b) farm size and land tenure; and (c) farmers' financial resources and technological skill. Incentives for farmers' participation in the pre-investment activities would include subsidized input supply, credit, and a rather intensive technical assistance program. 18. The third step of the project implementation would last 5 years and would include the establishment of ten cooperatives, together with the major services identified in para. 15. H. Proiect Cost 19. The project cost has been roughly estimated as follows: US$ Million One nucleus 10 nuclei Cheese cooperative investments 0.58 5.8 Cheese cooperative operating costs 0.47 4.7 On-farm medium-term credit 2.25 22.5 On-farm short-term credit 0.17 1.7 Technical assistance 0.7 Total 3.47 35.4 Assuming 30% for price contingencies, the project would sum up to US$46 million. It is expected that the foreign currency component would be around 35%, which would result in a loan of US$16.0 million. I. Project's Strengths and Constraints 20. The implementation of the sheep and goat development project would rely on several favorable factors, which could be summarized as follows: (a) high-yielding ewes and goats are already raised in Portugal, among them the Mondegueiro, S. Estrela and Saloia breeds, which yield between 80 and 120 liters per ewe per year (compared with the average of only 90 liters in France); (b) existence in Portugal of appropriate technology in terms of flock management and cheese processing; (c) existence of a market for good-quality ewe cheese in Portugal, within the EEC, and in other countries (some 750 tons are already exported annually); (d) availability of 1.2 million ha under cork oak and hoalm oak cover, 1.1 million ha of forest, 1.2 million ha to be excluded from cultivation, and 0.4 million ha of range that could/or should be improved and/or established into pasture; (e) the replacement of shepherds by fencing and the implementation of mechanical milking of ewes and goats could resolve labor availability constraints; and (f) dairy cooperatives existing in the Northwestern part of Portugal have proven to be strong and efficient. 21. On the other hand, the project would have to cope with some major constraints which previous studies and pre-investment activities should help to resolve before project implementation: (a) the technology of winter forage cultivation and conservation for summer feeding of livestock is still poorly developed in Portugal, where farmers rely mainly on irrigated summer crops; (b) the technology of range improvement, pasture establishment, and grazing management is still not sufficiently mastered and would require expansion of a massive research, training, and extension program throughout the country; 95 - ANNEX3 Page 48 (c) pasture establishment and mechanical milking equipment are expensive; (d) land tenure may be a major obstacle to pasture improvement and investments in those areas where grazing rights are being sold on a one-year basis; (e) most dairy cooperatives have been created in the western part of the country and their development in the project area may meet with some difficulties; tf) some technical problems might appear when shifting from family-size cheese processing units to industrial operations; and (g) most government services (research, extension, credit, health control, etc.) are not prepared to implement such a project. J. Project benefits 22. At farm level, the project would result in a considerable increase in production, with a gross production value of almost Esc. 800,000 for 41 ha, of which 35 are nonagricultural lands and whose rental value would not exceed Esc. 7,000 before improvement. The project would also provide full-time employment for one member of the family, which could be limited to one-third the time through mechanization of milking when labor is scarce. The net income would reach Esc. 185,000 (23% of gross production), an average of roughly Esc. 2,000 per milking ewe, which is generally agreed as the net income supplied annually by a milking ewe in the Beira Interior area. Rental value of the 41 ha occupied by a standard 100 ewes would be Esc. 15,000 before project. The project would therefore result in Esc. 170,000 of value added to each standard flock, and Esc. 510 million (US$5.5 million) for all the flocks. 23. At project level, the production of 5.500 tons of cheese worth Esc. 550 per kilo would reach Esc. 3,000 million annually. In addition, 675 tons of culled ewes, 600 tons of lamb (which could be increased through fattening), and 900 tons of wool would amount to Esc. 826 million. Therefore, the total value of production would reach around US$'' million annually, of which a good part could be exported. ANNEX 3 - 96- Page 49 FEEDING PLANNING AT FARM LEVEL Requirements of one ewe, spring lambing (Forage units) Period of the Year Traditional Improved System System December-February Supplied by range beginning 40 60 Supplied by forage grazing 40 20 grazing Total requirements 80 80 March-May Supplied by range full production 100 120 Supplied by forage fallow 20 - Total requirements 120 June-August Supplied by range end production 40 70 Supplied by forage irrigated & 70 40 stubble & stubble hay Total requirements 110 110 September-November Supplied by rarge - Supplied by forage straw, 90 90 straw, hay concentrate Total requirements 90 90 Annually Supplied by range 180 250 Supplied by forage 220 150 Total requirements 400 400 AMNEX3 - 97 - Page 50 LIVESTOCK SUBSECTOR PROJECTS AND STUDIES 3. AGRICULTURALLY INTEGRATED PORK PRODUCTION PROJECT Initiating Project Brief A. Proiect Objectives 1. The agriculturally integrated pork production project would aim at developing pig raising in Portugal through (a) the use of a feeding ration that would include a major part of staple produced at farm level; (b) setting up a productive framework in which fattening would be carried out in family-size units; and (c) integrated management either by cooperative organization or private agro-industries, or by a combination of the two. 2. (a) The fattening system would basically follow the Lehmann Danish method (use of potatoes. Danish beets, or humid maize) complemented by milk processing by-products, cereals, and concentrates. This system could be gradually substituted for systems exclusively based on concentrates that are currently being developed in the country. (b) A smaller size of fattening units (one or two dozen animals twice to three times a year) would (i) allow integration of pig fattening with agricultural production on small farms; (ii) be compatible with simple and inexpensive installations; (iii) lead to the utilization of underutilized family labor; and (iv) facilitate the progressive absorption of nonintegrated mini-scale pork breeding operations, which contribute heavily to the uncertainty of the market. (c) Integration operation based upon a medium-term contractual system set up between agro-industries (piglet production, concentrates, slaughter, and processing) and private farmers and/or cooperatives of pork producers would result in providing farmers with technical backstopping, supply, and marketing, all of which would lead to the development and regulation of pork production. B. Project Location, Areas, and Population Benefited 3. The project would be implemented simultaneously in Tras-os-Montes (region 2) and Algarve (region 7). (a) The Tras-os-Montes location would be justified by the following: (i) a program aiming at eradicating African swine fever already under implementation should succeed in freeing this region from ASF; (b) natural conditions should permit crops such as potatoes, beets, and maize to be fed to pork in family-size units established in most parts of the region; and (c) the building of the Cachao slaughterhouse (US$15 million), with an annual capacity of 60,000 animals, would represent the major marketing outlet for the production. 4. (b) The Algarve location would be justified because (i) this region is already relatively free of ASF since piglets are generally exported from Algarve to be fattened in other regions; (ii) selection and multiplication activities are already developed; (iii) the region is adapted to staple production at farm level during winter or with additional irrigation during summer; and (iv) tourism creates an important demand for pork production during a major part of the year. - 98 - ANNEX 3 Page 51 5. For technical and economical reasons, selection of grandparents and multiplication of weaned piglets would be undertaken in specialized industrial operations. On the contrary, the final fattening process would be carried out in family-size operations according to the capacity of farm models to produce staples required by the feeding program. The target group of farmers to be included in the project would be those with average-size farms, which consist of 6.4 ha and 7.8 ha in Tras-os-Montes and Algarve, respectively. Assuming that the complete fattening capacity of each project would reach 77,000 pigs a year and that the average fattening capacity of beneficiaries would be 36 pigs a year, around 2,000 farmers would be included in each project out of 75,000 farms in Tras-os-Montes and 34,000 farms in Algarve. A tentative scheme of implantation in the 19 municipalities of the region has been undertaken by the Cach@o authorities in their project draft. C. Current Situation in the Subsector 6. Pork production is carried out by 586,000 pig raisers out of a total of 808,000 farmers existing in the country (73%). There are almost 2 million pigs in Portugal, of which 320,000 represent the reproduction herd (sows and boars. (making 16%), and the rest are piglets and fattened pigs. The distribution of pig production is uneven both regionally and between farmers: 62% of sows are raised in the Ribatejo e Oeste region (close to Lisbon), followed by Alentejo (21%) and Beira Interior (16%). A smaller number of sows are raised in Tras-os-Montes and Algarve (5% and 4% of the national population, respectively). Pig raising is spread in a majority of very small operations (560,000 herders, each raising 1 to 9 animals, control 58% of the national herd while 1,400 industrial units each raising more than 100 animals, control 19% of the herd). 7. In 1981, 2.4 million pigs were slaughtered in Portugal with a carcass weight of 164,000 tons (average: 68 kilos). Since no international trade was carried out that year, the average per capita consumption was 9.8 kilos of meat and 6.6 kilos of bacon and fat. On the other hand, in that year the Portuguese population consumed 15.4 kilos of poultry, 13.6 kilos of beef, and 4.3 kilos of mutton and goat meat. There is still a great potential for increasing per capita consumption in Portugal when comparing the 35.6 kilos of pork consumed as an average by the EEC population in 1978. 8. Pork production is performed through two major productive systems, which could be defined as a traditional family-size system and an industrial system. (a) The traditional family-size system is carried out throughout the country and may involve several dozens of animals in the Alentejo as well as 2 or 3 animals in other parts of the country. These animals are local and mixed breeds and are fed on family wastes and agricultural by-products, grazing, and acorns. (b) Industrial pork production is based on a majority of Landrace and some Large White Stock raised in specialized operations and fed exclusively on concentrates. Technical performances are low in both systems since the traditional family system supplies fat pigs with low meat yield and a late slaughtering age while pigs raised industrially represent a very high concentrate consumption index. 9. Between 1970 and 1981, pork production increased from 100,000 tons to 164,000-tons (+ 64%) while con^entrates fed to the pig industry increased from 309,000 tons to 1.5 million tons (+ 387%). In other words, during the 1970s the tendency has been to eradicate feeding systems based cn agricultural ANNEX 3 Page 52 production rather than to use concentrates as a complement to fodder produced on the farm, . Thus, the pork production industry has become a competitor with poultry (which is a better performer) and with people in relation to raw materials for concentrates (95% of these are being imported). This trend is especially counterproductivebecause of the poor performance of the sector. Even if the concentrate production was expected to supply the entire national stock (which is not the case, since a large proportion of animals do not receive concentrate), each kilo of pork (carcass weight) produced in Portugal would require 9.1 kilos of concentrate. These poor performances are due to (a) poor quality of the concentrate; (b) poor reproductive performances of the herd; (c) poor conversion ratio of the stock; and (d) the fact that no integrated feeding systems (including potatoes, beets, dairy by-products, etc.) are implemented in Portugal. 10. A first outbreak of African swine fever (ASF) struck Portugal in spring 1957. Since then, 29,000 farms have been involved, including 920,000 animals of which 231,000 were contaminated and 689,000 were slaughtered (755,000 were indemnified by the Government). ASF is a permanent threat to the pork industry, since it is a sporadic disease likely to appear at any time in most pig raising units. Specialized pig raisers reacted through the creation of "isolated pig raising units", of which 481 units raising 57,000 sows were registered in Portugal in 1982. Nevertheless, this system has many shortcomings since (a) it is not entirely safe; (b) it means managing simultaneously reproduction (which requires a highly specialized skill) and fattening (which could be performed by unskilled workers); (c) it is necessarily concentrated, hampering the use of fodder produced on the farm; and (d) it does not address the real problem, which is the persistence of ASF in the country. D. Ongoing Projects 11. A pork production project has been drafted in 1982 in order to supply the Cach@o slaughterhouse under construction in the Tras-os-Montes region. The general concept of this project was preserved in the present proposal as far as selection and multiplication activities are concerned. Nonetheless, the size of fattening units, which was assumed to range between 300 and 1,200 pigs a year, was substantially reduced to an average of 36 head, while the number of such fattening units was increased from 165 to 2,000. 12. A project financed by EEC with Ecu. 5 million was implemented beginning in July 1981 and should be carried out for 5 years in order to eradicate ASF, which would threaten European stock as well when trade would be developed between Portugal and the Community. 13. Two additional projects have been considered by the Agricultural Development Plan, the "reconversion planning of Montijo and Monchique areas" and the "Iberica breed pork preservation" study. In view of the current status of the subsector, it does not seem that such activities could be economically justified. E. Project Description 14. Selection and multiplication of improved stock would be undertaken in specialized industrial units. Selection of purebred parent stocks to supply multiplication units with hybrids reproductive sows would be undertaken ANNEX 3 - 100 - Page 53 in a single industrializedunit of 500 females and up to 50 boars managed by the project authority. Multiplicationwould be undertakenin 16 specialized units. Each of these units would include 250 sows and 17 boars. They would be managed by private farmers, who would supply sows with staples produced on the farm for at least 40S of their nutritional requirement. It is assumed that reproductiveperformances of these units would reach 16 weaned piglets per sow per year, resulting in a total output of 72,000 piglets a year. In a further stage, it is likely that even multiplicationof improved stock could be carried out by some small farmers who have proven to be especially cost-effectivein this type of operation. 15. The size and number of fattening units have been estimated, assuming (a) that the average farm area is 7.0 ha in Tras-os-Montesand Algarve; (b) that 151 of this area (I ha) could be annually planteda part of the year with a crop to be fed to pigs (potatoes,Danish beets, corn, etc.); and (c) that 40X of the total dry matter requirementsof pigs fattened from 25 kilos to 105 kilos (280 kilos of dry matter) could be supplied by ruch staples. The average farmer could raise 30 to 40 pigs a year through 2 to 3 rotations a year of 120-day fattening cycles of 10 to 20 head at a time. F. Project Components 16. Consultantswould be hired to design the single selection unit and the several multiplicationunits, according to the local climatic condition and to the type of hybrids to be used in order to make the best profit from the integrated feeding system. Another consultationwould be required in order to design inexpensive,easy to clean, and labor-savingfattening buildings at farm level. 17. Besides managing the selectionunit, the project authority would have to tackle the differentaspects of pork fatteningat farm level in the manner it is usually done, by integratingpoultry and pork agro-industries,in most of the industrializedcountries. Therefore, the project would include (a) a concentratefabrication unit with a capacity in line with the size of the project. Assuming that 601 of the 260 kilos of dry matter supplied to pigs would be concentratedfeed, the annual capacityof the factory would be 12,000 tons, or 40 tons a day 300 days a year; (b) a technicalunit designed to assist farmers in the major aspects of the operation (staplescultivation, herd management, technicaland financialmonitoring); (c) an input supply unit linked with short-term credit facilities,providing the farmer with piglets, concentrate,seeds, fertilizers,etc.; and (d) a marketingunit linked with the slaughteringand processing industry. G. ImplementationSchedule 18. It is well establishedthat no investmentcould be seriously considered to be undertaken in the pork production industryas long as no consistent action is being taken to eradicate African swine fever in the country. The protectionof regions free of ASF could be part of such an eradicationplanning but should not be considered as the permanent solution to the problem. Similarly, the creation of isolated pig raising units could be considered as the adequate answer of individual producersin a situation of emergencybut it should not be considered as a possible trade-off solution which could be pursued in the future. Therefore, the implementationof the agriculturallyintegrated pork productionproject would be directly conditionedon the undertakingand the success of a nationwideASF eradication program. - 101 - - 101- ~~~~~ARNEPage 543 19. The agriculturally integratedpork production project would be implementedin three steps, involving: (a) technical-appliedresearch; (b) project preparationand institutionalbuilding; and (c) project implementation. (a) Technical applied research would be undertaken at farm level within a pre-investmentproject, which could last 2 to 3 years. This research would be carried out in the fields of (i) agriculturalproduction of crops to be used in pig fattening rations, such as potatoes, Danish beets, maize, etc.; (ii) choice of proper pig breeds or hybrids to be used in such a system, taking into account the requirementsof the Portuguesemarket; and (iii) different levels of staples and concentrates in the feeding program. 20. (b) InstitutionalbuildinA could start at the same time as the pre-investmentproject: study tours could be organized in order to show both the agro-industrialand farm cooperativemanagers the way such integrated developmentoperations are being managed in European countries. Project preparationcould be started as soon as technicaland financial results would be available from research carried out at farm level (1 to 2 years). That preparationwould include the design of project facilities and their technical management. 21. (c) The implementaLionof the project itself could be undertaken at the start of the third year following the beginning of the pre-investment activities: the constructionschedule of private multiplicationfacilities (250 sows per unit) and their filling with animals would be planned according to the pace of participationof private farmers dealing with pig fattening. H. Project Costs 22. The project would be implementedunder separate institutionsin Tras-os-Montesand in Algarve. Each of these components would require financing under several headings. (Million US$) Project investments 1.3 Project operating costs 0.5 On-farm investment (medium-termcredit) 12.0 On-farm operating costs (short-termcredit) 3.6 Project preparation,consultants, and training 3.0 Total 20.4 Assuming 30% for price contingenciesand a foreign currency component of 60%. the loan would reach around US$32 million if implementedsimultaneously in Tras-os-Montesand Algarve. I. Project'sStrengths and Constraints 24. The implementationof the agriculturallyintegrated pork production project would benefit from the following factors: (a) Per capita pork consumption is still low in Portugal (para. 7) although this meat is appreciatedby the population; it is likely that the reduction of subsidies for concentratewould provoke an increase of poultry retail prices, which could lead to a higher demand for pork products. (b) The general use of the Lehmann Danish feeding system would supply the country with almost twice as much pork for the same amount of concentrate. (c) Pig fattening in family-sizeoperations presents several advantages, such as: (i) lower investment required; (ii) more flexible operation in relation to management ANNEX 3 - 102 - Page 55 and marketing;(iii) value added to crops producedin the farm; and (iv) valorizationof underutilizedfamily labor. (d) Pig fatteningis still not developedin the regionsof Tras-os-Montesand Algarve,where the project would be implemented. 25. On the other hand, in order to succeed,the projectwould have to overcomeseveral bottlenecks, such as: (a) the existenceof ASF, the eradicationof which shouldbe seriouslyundertaken before any investmentis implementedin the sector; (b) since it would be new in the country,the Lehmann Danish feedingsystem would have to be acceptedsimultaneously by the farmersand by the agro-industrialsector; (c) in order to avoid major competitionwith existingcrops, cultivationdesignated for pig feedingshould include foragewhich could be grown in winteror early summer;(d) managinga productivesystem involving2,000 herders insteadof a few dozen industrializedfattening units may be more difficultand requirea greater personalnetwork; and (e) it is likely that, though the Lehmannfeeding system is the most justifiedin economicalterms, this system would be fully financiallvjustified at farm level only after subsidiesfor concentratesare suspendedby the PortugueseGovernment. 3. ProjectBenefits 26. In a standard6 to 7 ha farm, fattening36 pigs a year, the project would altogether:(a) supply remuneratedemployment for 1.5 man-month;(b) supply manure (the value of which was not includedin the projectbenefits); (c) lead to a more integratedrotation system (in which 15% of the area would be used for stapleproduction betweer -interand early summer);and (d) bring an additionalnet incomeclose to US$1,800a year, or 25Z of the gross value of the added production. 27. From the nationalstandpoint, the implementationof the Tras-os-Montesand Algarvecomponents of the projectwould supply the country with an incrementof 10,000tons (carcassweight) of pork (6Z of national production). Althoughthis additionalproduction would not increase dramaticallythe standardof pork consumptionin the country,the project would result in (a) settingup an integratedselection - multiplication- fatteningorganization which could be implementedin other regionsunder the authorityof the agro-industrial/cooperativesector; (b) replacingthe anarchic family-sizepork productionsystem, which is mainly responsiblefor market fluctuationsand spread of ASF, with a contractualmodern system that could be plannedat nationallevel; and (c) developingthe Lehmann Danish feedingsystem throughoutthe countrywould help to avoid great difficulties for the modern pork productionindustry when concentrateswill not receive subsidiesin the future. 2141E ANNEX 3 - 103 - Page 56 FatteninR Operation Feeding Planning (From the Lehnann Danish System) Requirements of one family size unit fattening 36 PiRs a year Technical Parameters Age (days) Weight (kilos) Weaning 90 25.0 (LW) Slaughtering 220 105.0 (LW) Fattening period 130 80.0 (LW) Average daily gain during fattening period 0.620 (LW) Conversion factor during fattening period 3.25 Consumption in dry matter duiringfattening period 260.0 (Equivalent to approx. 260 forage units) Feeding planning Staples cropped on the farm may represent 30 to 50% (40% as an average) of total dry matter supplied to pigs. These staples include potatoes, Danish beets, and green maize. In rainfed conditions in Tras-os-Montes and with complementary irrigation in Algarve, it is assumed that, for instance, 18 tons of potatoes could be harvested in early June (4,500 kilos of dry matter) and supply enough staple for 43 pigs (260 kilos x 40% = 104 kilos of staple). Complementary feed. Composition and quantity of complementary feed are calculated according to fattening requirements. They may include dairy by-products (skim milk, serum), cereals, and/or a 40% protein concentrate. In this model, complementary feed (which is expected to be concentrate) would cover 60% of total requirements and reach 156 kilos for the entire fattening period. ANNEX 3 - 104 - Page 57 PORTUGAL AGRICULTURAL SECTOR WORK THE LIVESTOCK SUBSECTOR Bibliography A. GENERAL DOCUMENTATION Sistematizaqao e desenvolvimento do ordenamento pecuario. MACP. no date, 53p. Inquerito as exploraqoes agricolas do Continente, 1968. Efectivos pecuarios INE, no date, 64p. Agriculture. Etude Sectorielle IIE (Instituto do Investimento Estrangeiro), no date, 35p. Caracteriza.ao Sunaria da estrutura agraria Portuguesa M.A. de Carvalho and E.L. de Andrade, MACP, 1982, 31p. Selected Agricultural Statistics on Portugal 1965-77. USDA, 1981, l 4 lp. B. FORAGE PRODUCTION Medidas de fomento para o desenvolvimento das pastagens y forragens. D. Crespo, MACP, no date, 5p + tables. Pastagens Semeadas temporarias e permanentes de sequeiro. D. Crespo, INIA, 1978, 69p. Aproveitamento dos ecosistemas agrarios para a producao de cereais, leguminosas e pastagens, T.A. Salgueiro, 1979, 18p. Problems and Potentialities of Pasture and Forage production in Portugal. D. Crespo, Melboramento 26 1975-76, 1980 pp. 151-17b A Contribuirao das azinheiras e dos sobreiros para a fertilidade do solo. T.A. Salgueiro FFF, 1973, 15p. Pastagens de sequeiro, T.A. Salgueiro, FFF, 1973, 25p. 0 trevo subterraneo e o desenvolvimentoagro-pecuario em Portugal, D. Crespo, Melhoramento 21 1968-69 pp 467-488. Socio-economic issues in evaluating and producing new technology for forages, pasture and animal production in the Alentejo. J.H. Sanders, USAID, January 1983, 11 p. ANNEX 3 - 105 - Page 58 C. CONCENTRATESINDUSTRY PMA: Orientacoes para a pecuaria. Apreciagao Generica, CIAPA, 1982, 8p. Necessidade de uma politica pecuaria para o pais; algumas sugestoes para seu delineamento, Grupo Coordenador Inter-Associaqoes, 1981, 21p. Processo de Integraqno curopeia: Perspectivas de evolucao do sector e principais problemas sectoriais, IACA, 1981, 12p. Price and Subsidy Programs for the feed grain-livestock sector of Portugal, R. Fox and Al; from PORCALFER Phase I Report, 198L, 99p. Alimentos Compostos para animais, M da C. Evangelista and V.C da Fonseca, BFN, 1981, 71p. D. CATTLE PRODUCTION Bovinos Leiteiros, R. Henriques and A. Rodriguez, MACP-PMA, 1983, 126p. Bovinos en Portugal, A. Rodriguez, MACP, 1981, 325p. A empresa agro leiteira e a adesao a CEE, A.S. Pinto and al, MACP, 1982, 25p. Bovinos de carve. M. Sobral and al MACP-PMA, April 1983, 80 p. E. POULTRY PRODUCTION PIMA:Produto avicultura, anteproyecto do relatorio final, A.A de Almeida, no date, 68p. F. PORK PRODUCTION PMA: Produto Carne de Suino, Equipa Central, 1982, 410p. Suinocultura; Medidas propostas Equipa Central, 1982, 34p. PMA: Produto carne de Suino, Analise e diagnostico previo, R.A.P. Vieira, 1982, 40p. RefleVoes Sobre o problema da Suinocultura, F. da Graca, Matadouro Industrial do Cachao, 1982, 60p. G. SHEEP PRODUCTION PMA: Ovinocultura e Caprinocultura de Carne, L.L.T da Gama and Al, MACP, no date, 88p. PMA: Produto ovinos e caprinos de leite, J.D. Borrego and Al, MACP, 1982, 52p. - 106 - ANNEX 3 Page 59 The sheep and goat development programs for Portugal, W.C. Foote, PROCALFER Project, four reports, 1981 to 1982, lOOp. Analise economica da produqao intensiva de borego no Alentejo, J.J.F. Casquinha and al, December 1982, 26 p. Productivity and profitability of improved merino sheep production systems in the Alentejo. M.L. Silvo Carvalho and al, USAID, 1983,NI 5Np. H. DAIRY MARKETING and PROCESSING PAM: leite et laticinios,MACP, 1983, 112p. Aspectos da economia leiteira Portuguesa no periodo 1975- 1980, M do C Da Maia Batalha, MACP. 1982, 143p. Relatorio Sectorial do Leite, Projecto Agricola e agroindustrial, 1981, 66 and 130p + Annexes. I. MEAT PROCESSING and MARKETING Relatorio de actividades 1981, JNPP, 1982, 363p. Elementos para estudo da produwao e comercializaqao de produtos animais, R. Rocha and R. Horta, MACP, no date, 24p. Algum aspectos do Comercio de dois produtos de origem animal, M.A.L de Carvalho. MACP, 1982, 26p. Le Marchi du Betail et des Viandes au Portugal, CFCE, 1978, 129p. Relatorio Annual sobre o abastecimento do pais em carnes, JNPP, 1981, 15p + 35 tables. Analise da produqao e importaqao de carnes de 1968 a 1977 JNPP, 1980, 95p + tables. Le Marchi des produits Agro-alimentaires du Portugal, CFCE, 1977, 15p. The portuguese meat and livestock industry, MLC Europan Booklet 83/2, 35 p + tables. - 107 - ANNMX3 Table i Page 60 AGRICULTURALSECTOR SURVEY THE LIVESTOCK SUBSECTOR Number of Farms According to Their Size (1968 Census) --- Farms---- - 1 ha 1.4 ha 4-20 ha +20 ha Total Viana do Castelo 26,225 14,475 3,025 43,900 Braga 29,750 21,241 9,580 61,100 Porto 35,440 18,765 7,355 62,200 Sub-total 91,415 54,481 19,960 1,344 167,200 Z Farms raising cattle 20.5 71.9 82.2 67.6 Vila Real 13,510 17,920 11,115 43,600 Braganga 2,570 9,805 15,900 31,500 Sub-total 16,080 27,725 27,015 4,280 75,100 Z Farms raising cattle 32.2 18.2 41.2 16.2 Aveiro 39,465 23,030 6,025 69,000 Viseu , 33,010 35,065 12,355 81,400 Coinbra 33,110 29.445 7,430 70,400 Sub-total 105,585 87,540 25,810 1,865 220,800 2 Farms raising cattle 18.4 44.5 57.2 49.2 Guarda 8,405 18,205 14,880 43,700 Castelo Branco 11.295 19,155 11,365 44,300 Sub-total 19,700 37,360 26,245 4,695 88,000 Z Farms raising cattle 3.1 10.6 31.0 52.3 Leiria 26,125 26,960 6,905 60,500 Santarem 17,630 24,850 11,265 55,500 Lisboa 13.960 19,995 6.885 41,600 Sub-total 57,715 71,805 25,055 3,025 157,600 S Farms raising cattle 5.7 17.2 28.3 40.8 Porto Algre 4,755 5,525 3,930 16,200 Evora 2,930 3,580 3,325 11,400 Setubal 6,925 5,880 3,135 17,300 Deja 2,435 - 6,420 7,750 20,800 Sub-total 17,045 21,405 18,140 9,110 65,700 Z Farms raising cattle 5.0 10.5 18.0 50.5 Faro 6,235 14,535 11,000 34,300 Sub-total 6,235 14,535 11,000 2,530 34,300 Z Farms raising cattle 3.9 10.6 23.4 39.0 Portugal 301,975 314,851 153,225 38,649 808,700 Z Farms raising cattle 14.8 32.8 41.4 35.5 27.8 Source: INE 2203E/mld - 108 - ANNEX 3 Table 2 PORTUGAL Page 61 AGRICULTURALSECTOR SURVEY THE LIVESTOCK SUBSECTOR Farmers Raising Cattle According to The Size of Farms (1968 Census) ------Farms ------1 ha 1.4 ha 4-20 ha +20 ha Total Viana do Castelo 10,145 13,762 2,708 26,736 Brags 4,764 14,475 7,918 420 27,563 Porto 3,846 10,909 5,790 20,927 Sub-total 18,755 39,146 16,416 909 75,226 Average cattle per herder 3.14 3.62 5.75 11.32 Vila Real 1,344 4,456 5,930 12,449 Braganga 35 586 5,193 7.697 Sub-total 1,379 5,042 11,123 2,602 20,146 Average cattle per herder 4.02 2.80 3.83 6.67 Aveiro 11,317 16,448 4,378 32,444 Viseu 3,427 12,241 6,906 23,012 Coimbra 4 702 10.295 3 472 18,648 SSub-total l, 4-- 38,984 14756, 918 74,104 Average cattle per herder ' 2.57 2.70 3.32 5.30 Guarda 253 2,450 5,799 9,894 Castelo Branco 257 1,520 2,329 5,269 Sub-total 610 3,970 8,128 2,455 15,163 Average cattle per herder 3.03 2.88 2.87 6.19 Leiria 2,449 7,616 3,160 13,497 Santarem 279 1,606 1,722 4,261 Lisboa 576 3,123 2,212 6,218 Sub-total 3,304 12,345 7,094 1,233 23,976 Average cattle per herder 3.11 3.37 4.26 21.66 Porto Algre 164 627 1,072 2,935 Evora 134 365 644 1,760 Setubal 484 755 889 2,703 Beja 76 491 668 3,568 Sub-total 858 2,238 3,273 4,597 10,966 Average cattle per herder 4.38 5.06 6.40 27.94 Faro 243 1,543 2,577 987 5,350 Sub-total 243 1,543 2,577 987 5,350 Average cattle per herder 5.75 4.63 5.86 9.72 Portugal 44,595 103,268 63,367 13,701 224,931 Livestock distribution (Z) 19.8 45.9 28.2 6.1 100.0 Average cattle per herder 2.95 3.11 4.35 16.33 Source: INE - 109 - ANNEX 3 - 109 - ~~Table3 PORTUGAL Page 62 AGRICULTURALSECTOR SURVEY THE LIVESTOCK SUBSECTOR Area of Farms According to Their Size (1968 Census) ------Farms------1 ha 1.4 ha 4-20 ha +20 ha Total Via" do Castelo 10,350 26,070 19,435 67,000 Braga 9,316 42,612 65,105 135,700 Porto 9,755 36,871 52,231 120,700 Sub-total 29,421 105,553 136,771 51,655 323,400 Z of the region 9.1 32.6 42.3 16.0 100.0 Average size of farms (ha) 0.32 1.94 6.85 38.43 Vila Real 5,637 36,190 82,983 165,000 Braganga 1,276 22,025 141,621 314,700 Sub-total 6,913 58,215 224,604 189,968 479,700 Z of the region 1.4 12.1 46.8 39.7 100.0 Average size of farms (ha) 0.43 2.10 8.31 44.39 Aveiro 14,882 44,566 41,729 132,400 Viseu 17,743 68,726 86,628 213,200 Coimbra 14,702 57,413 49,454 146,900 Sub-total 47,327 170,705 177,811 96,657 492,500 s of the region 9.6 34.7 36.1 19.6 100.0 Average size of farms (ha) 0.45 1.95 6.89 51.83 Cuarda 3,842 37,537 124,343 259,600 Castelo Branco 4.793 36,646 90,125 409,100 Sub-total i 8,635 74,183 24,468 371,414 668,700 s of the region 1.3 11.1 32.1 55.5 100.0 Average size of farom (ha) 0.44 1.99 8.17 79.11 Leiria 11,996 51,578 47,939 149,200 Santarem 7,699 47,704 83,910 352,900 Lisboa 6,381 39,890 48.666 150,700 Sub-total 21,980 101,227 132,259 397,334 652,800 Z of the region 3.4 15.5 20.3 60.8 100.0 Average size of farms (ha) 0.38 1.41 5.28 131.35 Porto Algre 1,823 10,903 32,197 470,700 Evora 1,195 6,872 29,597 572,000 Setubal 2,554 10,929 26,683 293,900 Beja 1,130 13,219 69.546 754,000 Sub-total 6,702 41,923 158,023 1,883,952 2,090,600 2 of the region 0.3 2.0 7.6 90.1 100.0 Average size of farms (ha) 0.39 1.96 8.71 206.80 Faro 2,813 27,877 89,437 267,100 Sub-total 2,813 27,877 89,437 146,973 267,100 Z of the region 1.0 10.4 33.5 55.1 100.0 Average size of farms (ha) 0.45 1.92 8.13 58.09 Portugal 123,791 579,683 1,133,373 3,137,953 4,974,800 2 of the region 2.5 11.7 22.8 63.0 100.0 Average size of farms (ha) 0.41 1.84 7.40 81.19 Source: INE - 110 - -RM 3 PORTUGAL Page 63 AGRUCULTURALSECTOR SURVEY THE LIVESTOCK SUBSECTOR Distribution of Cattle According to the Size of Farms (1968 Census) - 1 ha 1.4 4-20 +20 Total Viana do Castelo 26,766 44,693 11,847 84,159 Braga 16,627 54,600 47,376 123,644 Porto 15,450 42.342 35,126 97,315 Sub-total 58,843 141,635 94,349 10,291 305,118 % out of the region 19.3 46.4 30.9 3.4 100.0 Stocking rate per ha 2.00 1.34 0.69 0.20 Vila Real 5,437 12,462 22,931 45,799 Braganga 112 1,654 19.640 33.787 Sub-total 5,549 14,116 42,571 17,350 79,586 Z out of the region 7.0 17.7 53.5 21.8 100.0 Stocking rate per ha 0.80 0.24 0.19 0.09 Aveiro 28,592 49,704 17,925 97,801 Viseu 8,188 30,665 21,238 62,094 Coimbra 13,145 24,970 9,764 49,158 Sub-total 49,925 105,339 48,927 4,862 209,053 Z out of the region 23.9 50.4 23.4 23.0 100.0 Stocking rate-per ha 1.05 0.62 0.28 0.05 Guarda 1,045 6,795 15,449 28,325 Castelo Branco 803 4.627 7.870 23,457 Sub-total , 1,848 11,422 23,319 15,193 51,782 2 out of the region 3.6 22.1 45.0 29.3 100.0 Stocking rate per ha 0.21 0.15 0.11 0.04 Leiria 5,616 21,860 10,094 39,377 Santarem 2,002 6,318 8,004 32,675 Lisboa 2.660 13.438 12.102 36.746 Sub-total 10,278 41,616 30,200 26,704 108,798 Z out of the region 9.5 38.3 27.8 24.4 100.0 Stocking rate per ha 0.47 0.41 0.23 0.07 Porto Algre 697 2,403 4,161 36,986 Evora 556 2,743 3,679 43,994 Setubal 2,203 4,428 6,226 33,929 Beja 302 1.753 6,870 49.542 Sub-total 3,758 11,327 20,936 128,430 164,451 Z out of the region 2.3 6.9 12.7 78.1 100.0 Stocking rate per ha 0.56 0.27 0.13 0.07 Faro 1.396 7.148 15,114 9,589 33.247 Sub-total 1,396 7,148 1,514 9,589 33,247 S out of the region 4.2 21.5 45.5 28.8 100.0 Stocking rate per ha 0.50 0.26 0.17 0.07 Portugal 131,597 321,276 275,416 223,746 952,035 Z out of the region 13.8 33.8 28.9 23.5 100.0 Stocking rate per ha 1.06 0.55 0.24 0.07 Source: INE - 111 - ANREA~ 3 Table 5. Page 64 AGRIUES -E MtE Oreit Foer Poeict-m in Pkrugl AnmaulEC-Cam Crop Pa - pnture Fermerent Pastures Ibtal Ia2nftdIrrigted Rit Tgtd fifdRl; EhtreDbro e Minho Asea (ha) 99,030 9,960 - 4,0B0 100,000 820 203,930 EU/ha 2,133 6,952.8 - 7,164.7 1,000 2,951.2 - '000 FU 211,233 69,250 - 29,232 100,000 2,420 412,135 TraB-os-4mtes Area (ha) 3,792 145 - - 22,302 21,702 47,796 FU/ha 1,539 3,754 - - 1,934 2,200 - '000 FU 5,835 644.25 - - 43,141.4 47,744A4 97,265.05 BeiraLitoral Am (ha) 58,523 5,758 976 590 1,236 1,187 62,512 FU/ha 2,121 6,029 1,059 3,721 847 2,761 - '000 FU 124,142.5 34,719.5 1,034.4 2,195.5 1,047.3 3,277.7 166,416.9 BeiraInterior Area(ha) 10,530 9,914 367 1,113 228 18,2DO 30,438 FU/ha 1,055.6 3,300 1,883.4 5,142.8 1,476.8 1,490 - '00 FU 11,115 32,716.2 691.2 5,723.9 336.7 27,118 77,701 Ribacejoe Ceste Area(ha) 52,100 6,592 2,964 1,430 14,125 485 71,104 FU/ha 1,816 6,955.4 2,002.7 6,569.2 1,633.7 5,748.5 - '000FU 94,621 45,850 5,936 9,394 23,076 2,788 181,665 Alentejo Arem(ha) 100,000 3,000 10,000 2,500 30,000 1,000 143,500 FU/ha 1,700 4,500 1,300 5,500 1,300 5,000 - '000FU 170,000 13,500 23,000 13,750 39,000 5,000 254,250 Algarve Area(ha) 2,600 610 450 400 1,300 320 5,680 FU/ha 2,000 7,000 1,500 5,000 1,500 5,000 - '000FU 5,200 4,270 675 2,000 1,950 1,600 15,695 Portugal Area(ha) 326,575 35,979 14,757 10,113 169,191 43,714 564,960 '000FU 622,146.5200,950.35 21,336.6 62,295.4 208,551.4 89,948.1 1,205,127.95 Sozc: WMP - 112 - illANEU=3 Page 65 Aa nLIfSECMR SUEY !1E LIllES: SUBSEC1R Potential Fora Prohction in Portugal kAzrl E!= FM Torary Pastures Pemuist Pastr TotaL Rainfed Irripted Rainfed Iriai Raizifed Irrigated Eatre Douro e firiho Azea (ha) 63,000 13,000 - 32,000 110,000 - 205,000 FU/ha 3,807.1 10,000 - 8,500 2,400 -- '000 PU 239,850 130,000 - 272,000 264,000 - 905,850 Trea- .-Montes Area (ha) 40,410 1,150 42,840 24,000 93,609 21,702 222,561 FU/ha 2,799.9 6,478 2,047 7,271 1,882.4 4,615 - '000 FU 113,143 7,450 87,680 174,500 176,206.6 100,l2 659,131.6 Beira Litoral Area (ha) 65,265 22,313 3,010 7,386 26,850 1,350 103,864 PU/ha 4,055 7,936 2,988 8,481 1,469 4,777 - '000 FU 264,656 177,092 8,995 62,637 39,450 6,450 559,280 Beira Interior Area (ha) 49,500 11,500 46,500 1,500 117,500 5,750 220,750 FU/ha 2,029.5 5,000 1,783.9 5,106.7 1,408.1 3,406.1 - '000 FU 100,462.5 57,500 82,950 7,660 165,450 19,585 665,857.5 Ribatejo e Oeste Area ha) 81,635 7,566 109,010 3,251 98,850 800 295,272 FU/ha 2,181.3 6,957.2 1,216.7 6,675 1,496.6 5,525.8 - '000FU 177,277 52,638 176,675 20,249 135,267 4,000 566,144 Aleatejo Area (ha) 142,254 5,441 893,294 23,379 499,880 3,014 1,561,821 FU/ha 2,052 6,372 1,705 7,224 1,200 6,200 - '000 FU 291,999.9 34,673.5 1,522,417 168,906 599,856 18,686.8 2,626,539.2 Algarve Azea (ha) 6,166 910 47,336 400 9,106 1,420 65,338 FU/ha 2,000 7,000 1,500 - 1,500 5,000 - 1,983.2 5,000 1,000 5,000 1,500 3,545.5 - '000 FU 12,272 5,770 47,588 2,000 13,659 5,500 86,789 Porrugal Area (ha) 448,230 61,880 1,141,990 91,916 955,795 34,036 2,675,136 '000 FU 1,199,660 465,120 1,926,300 707,950 1,393,890 154,373 6,077,000 Source: 2CP - 113 - ANNEX3 Iable_-7 PORTUGAL Page 66 AGRICULTURESECTOR SURVEY THE LIVESTOCK SUBSECTOR The Concentrate Feed Industry (a) According to Output (Thousandmetric tons) Poultry Cattle Pig Others Total 1970 340 282 309 25 955 1971 396 319 455 25 1,195 1972 472 364 519 26 1,380 1973 492 430 575 29 1,527 1974 595 480 677 36 1,788 1975 593 436 767 35 1,831 1976 736 577 856 49 2,218 1977 909 612 1,202 62 2,785 1978 886 602 1,010 78 2,576 1979 957 749 1,002 110 2,818 1980 1,077 873 1,438 124 3,512 1981 1,049 944 1,506 138 3,637 (b) According to Inputs (Raw Materials) (Thousandmetric tons) Corn Sorghum Oats Others Total 1975 993 137 20 681 1,831 1976 1,003 435 19 761 2,218 1977 1,312 512 5 956 2,785 1978 1,361 313 1 901 2,576 1979 1,621 158 1 1,038 2,818 1980 2,203 80 38 1,191 3,512 Source:IACA - 114 - ANNEX3 Table R PORTUGAL Page 67 AGRICULTURESECTOR SURVEY THE LIVESTOCK SUBSECTOR Livestock Population (Head) 1972 1976 1981 Cattle 1,340,000 1,110,000 1,100,000 Svine 1,977,000 1,500,000 1,977,000 Sheep 2,420,000 2,000,000 2,017,000 Goats 741,000 735,000 718,000 Donkeys 177,000 180,000 Mules 87,000 88,000 Horses 30,000 25,000 Poultry Layers 3,574,000 4,500,000 4,930,000 Broilers (Monthly production) 3,924,000 5,500,000 10,800,000 Source: MACP - 115 - ANNEX3 Table 9 PORTUGAL Page 68 AGRICULTURESECTOR SURVEY THE LIVESTOCKSUBSECTOR Livestock Commodities Output (Thousand metric tons) Beef Mutton All & Veal Pork GGoat Poultry Milks Eggs Wool 1970 87.2 56.8 15.0 58.2 579 36.5 7.3 1971 74.2 59.1 10.7 67.2 548 37.2 8.2 1972 73.0 63.9 9.9 75.0 569 37.4 8.3 1973 81.2 69.3 11.2 83.2 687 40.1 9.8 1974 84.3 69.3 12.3 99.6 613 42.7 9.8 1975 97.7 81.2 12.2 100.0 626 44.7 8.5 1976 79.3 78.5 11.6 114.7 638 44.2 9.8 1977 77.4 86.5 9.7 133.8 674 52.2 9.7 1978 88.1 93.4 12.1 137.4 685 55.8 9.2 1979 89.0 79.5 10.8 133.2 777 60.8 9.0 1980 97.3 95.5 12.6 143.0 784 61.7 9.0 1981 112.0 164.0 12.7 152.8 790 63.5 9.2 Source: MACP - 116 - AIM 3 Page 69 AMCUMJLM3 L ~CT R SUREYf ELTVSC SLOEC rR Mut C2Maweiai in Portugl (Tonr,carcass wight) Pod La-b 'Kid Horse Total Fred Frozen Ibtal Fresh Frcnm Total Total Total Total Carcss (tons) 1972 73,369 26,233 99,602 117,272 15,482 131,272 16,560 3,272 1,757 252,40 1973 81,580 27,137 108,717 134,991 5,531 140,522 18,620 3,614 1,493 272,960 1974 84,770 29,766 114,536 132,000 11,525 143,585 18,412 3,948 1,133 281,614 1975 96,829 2L,768 118,597 131,900 4,017 135,917 19,954 4,462 174 279,904 1976 78,951 41,223 120,174 126,334 14,325 140,659. 16,554 3,356 951 281,694 1977 78,232 40,529 118,761 L38,000 3,738 141,738 14,800 3,000 730 279,029 1978 91,781 13,657 104,438 146,335 6,413 152,748 12,067 2,759 815 272,817 1979 89,604 9,369 98,973 13D0,000 9,288 139,286 15,000 4,000 972 258,233 1980 97,661 4,884 102,545 127,854 963 128,817 14,679 3,812 995 245,848 1981 122,411 2,315 124,726 164,440 147 164,587 9,612 2,219 881 302,025 Souce: 1lP 2203E/od - 117 - 2112E PORTUGAL AGRICULTURALSECTOR SURVEY A NEAR-TERMACTION PROGRAMFOR AGRICULTURE ANNEX 4; FRUITS AND VEGETABLES Table of Contents Page SUMMARY AND CONCLUSIONS ...... i I. TOTAL AREA, PRODUCTIONAND YIELD OF FRUIT, OLIVE AND GRAPEVINE e. I II. TOTAL PRODUCTION AND YIELD OF FRESH VEGETABLES ...... 2 III. PLACE OF HORTICULTURE IN PORTUGUESE AGRICULTURE IN TERMS OF AREA AND PRODUCTION ...... 3 IV. MAIN HORTICULTURALCROPS BY AGRICULTURALREGIONS OR DISTRICTS (INCLUDING FLOWERS, TOBACCOAND GREENHOUSEHORTICULTURAL CROPS) 3 V. SEASONAL FLUCTUATIONS AND STABILITY OF FRUIT AND VEGETABLE PRODUCTION ...... 15 VI. FARM STRUCTURE IN HORTICULTURE . 15 VII. SUPPORT SERVICES ...... 18 VIII. HORTICULTURAL PRODUCTION AND HOME CONSUMPTION NEEDS ...... 20 IX. INCOME FROM HORTICULTURE ...... 20 X. MARKETING FACILITIES FOR HORTICULTURAL PRODUCTS ...... 23 Xi. PROCESSING OF HORTICULTURAL PRODUCTS AND STORAGE FACILITIES ..... 26 XII. COLD STORAGE FACILITIES AS A SUPPORT THE PRODUCTION OF FRUIT AND VEGETABLES ...... so ...... 28 XIII. HORTICULTURAL FARM PERFORMANCE IN COMPARISON WITH THAT OF OTHER COUNTRIES ...... 29 XIV. CONSTRAINTS IN THE HORTICULTURAL SUBSECTOR ...... 31 XV. POLICY AND RECOMMENDATIONSFOR DEVELOPMENT OF THE HORTICULTURAL SUBSECTOR ...... 33 - 118 - TABLE OF CONTENTS(cont'd) Page XVI. RECOOMMENDATIONSFOR STUDIES NEEDED TO DEFINE HORTICULTURAIACTION PROGRAMS...... 36 XVII. PROPOSED TERMS OF REFERENCEOF THE RECOMMENDEDSTUDI3S ...... 36 XVIII. PROJECTS IDENTIFIED DURING THE MISSION ...... w...... 38 TABLES Table 1: Area and Productionof Fruit per Year in Portugal from 1976 to 1980 .. Table 2: Annual Productionof Fresh Vegetablesin Portugal from 1973 to 1980 ... Table 3: Area, Annual Productionand Yield of Touto for Processingand of Dry Beaus Table 4: Olive Tree Area and Number, Quantityof Olives for Oil, and Volume of Olive Oil Processedby District Table 5: SeasonalFluctuation of Main Fresh Fruit Production Table 6: SeasonalFluctuation of Main Fresh Vegetablesand Field Fruit Production: Dates of Harvest Table 7; PortugueseExport and Import of Fresh Fruit, Fresh Vegetables,Dry Fruit and Dry Vegetables; Dates of Harvest Table 8: Types and Quantitiesof ProcessedFruit and Vegetables Table 9: Location,Number and Size of the Horticultural ProductsProcessing Factories (1978) Table 10: Cold StorageFacilities for HorticulturalProducts (1982) - 119 - PORTUGAL AGRICULTURALSECTOR SURVEY FRUIT TREE. GRAPEVINEAND VEGETABLE SUBSECTOR: ISSUES AND STRATEGYFOR DEVELOPMENT SUMMARYAND CONCWSIONS i. Horticulture is an important part of Portuguese agriculture. Horticultural crops are produced on 49Z of cultivated land and on 562 of irrigated land. The area covered by solid-planting olive orchards is the largest,with 570,000ha; wine grapes are next with 355,000ha; third is the total fresb and dry fruit tree area of 145.000ha. Potatoesare grown on 110,000ha, and other vegetables for the freshvegetable market are produced on 76,000ha. Tomatoesfor processingtake 18,000ha, and table grapes are grown on 6,000 ha. In 1980, these areas have produced 250,000 tons of olives; 9,7 million hectolitersof vine; 470,087 tons of fruit; 1.1 million tons of potatoes;1.0 million ton of vegetables;0.5 million tons of tomatoes for processing;and 62,050 tons of table grapes. ii. The high value of irrigated horticultural crops provides for a better farm income per unit area than any of the field and industrial crops, and it ensures that irrigated lands are used to their full potential. At the present stage of development of Portuguese horticulture, the annual gross income per hectare of main irrigated crops is as follows: (in Escudos) Apples 525,000 Citrus 225,000 Greun beans 85,000 Peppers 84,000 Potatoes 73,000 Tomatoesin plastichouses Double cropping of vegetables in many areas doubles the gross income. iii. Per capita consumption of fruit in Portugal is overall about 251 lower than in northern EEC countries(about the same as France but generally of lower quality); it is about equal for fresh vegetables and higher for potatoes. The stagnation evident in total fresh fruit production in recent years is therefore not due to excess production, and consumption could be increased through the itprovement of living standards. Total fresh vegetable production has also stagnated in the past eight years, and local consumption seems to have reached a ceiling. However, consumption of quality fresh vegetables could be improved at the expense of the present high consumption of cabbages. and fresh fruit and vegetables could be produced for export. Potato consumption is expected to decrease with the improvement of living standards, causing a consequent decrease in the potato area. - 120 - - ii - iv. Tomatoes for processing, a major crop for export, has shown a continuous decreasing trend in production, from 833,000 tons in 1972 to 386,366 tons in 1981, because of strong competition on the world market. Yield has also shown a downward trend from 37 tons/ha in 1972 to 25 tons/ha in 1980, owing to lack of proper farm management and the absence of appropriate rotations. v. Unheated greenhouse horticulture is expanding and could lead to considerable export trade of early fresh fruits and vegetables to EEC countries, because of the particularly suitable climatic conditions in the Algarve region. However, soil, irrigation and fertilizer management in greenhouses need considerable improvement. vi. Compared with countries with similar climatic conditions, yields of horticultural crops in Portugal are as follows: good for pears, peaches, cherries, table grapes, tomatoes, peppers, onions, and carrots; low for apples, citrus, olives, wine grapes, hazelnuts, chestnuts, walnuts, and potatoes; and very low for almonds. vii. The fruit and vegetable processing industry is important in Portugal and is run by 77 factories. However, this industry as a whole has been stagnant in the past ten years and its annual output is around 200,000 tons of processed products. Tomsto concentrates have decreased a great deal, but still make up about 50Z of the total. The tonnage of frozen horticultural products has increased from 250 tons in 1970 to 12,500 tons in 1979. viii. Total cold storage facilities for the horticultural subsector amount to 833,000 L3 , compared with 69,000 and 68,000, respectively, for the animal production and fishery subsectors. Since there is generally no modern grading, handling, and packing of fresh vegetables, these cannot be put into cold storage. Therefore, the cold storage capacity is mainly for fruit and seems to be in excess of the volume annually produced. However, the regional distribution of cold storage facilities for fresh fruit is not always approrriate. ix. The main constraints on the improvement and development of horticultural crops are the lack of organization of production; the insufficient number (or absence) of modern grading, handling, and packing houses, with consequent lack of product standardization;a deficient marketing system; and, above all, the primitive wholesale market infrastructure and organization in the large cities. Other major production constraints are: lack of healthy seedlings produced in nurseries and consequent low-productive fruit trees, particularly citrus; use of too many vegetable varieties, impeding easy standardization of products; inefficient links and feedback between farmers and applied research, as well as between extension organizations and producers living far away from experimental and demonstration fields; inadequate land use and deficient crop rotations; and high cost of agricultural credit. - 121 - - iii1 - x. Particular concerns to be dealt with in the Government's short-term horticultural policy should be: (a) to ensure better use of irrigated land potential by improving farming systems in the irrigation schemes and by including in them high-value horticultural crops wherever agriculturally and economically sound; (b) to give easier access tg credit for horticultural farms producing perishable and price-fluctuating products; (c) to take advantaze of the opportunities provided after Portugal's entry into the EEC by favoring the development of the following horticultural crops that show good prospects for export to the EEC countries: citrus, peaches, hazelnuts, walnuts, early table grapes, kiwi fruit, winter and early vegetables, and potted ornamental subtropical and tropical plants. xi. The long-term policy of the Government for horticultural improvement and development should include the following main aspects: (a) creating and organizing modern wholesale fruit and vegetable markets in Lisbon and Porto; (b) speeding up development of irrigation schemes in areas of the Algarve region with particularly suitable conditions for subtropical fruit, and for early temperate zone fruit, as well as for winter and early vegetable production; (c) implementing a nursery plant certification program for fruit trees; (d) developing applied horticultural research, especially on citrus and on vegetables, and improving the efficiency of the extension service. xii. In order to define special horticultural action programs, studies should be implemented in Portugal on the following four subjects: (a) nursery plant certification programs for citrus and deciduous fruit ; (b) feasibility of producing locally certified vegetable seed; (c) introduction of fruit crops in Mira and Idanha irrigation schemes; and, (d) evaluation of the possibility of producing very early maturing peaches in the Algarve region with a view to export. xiii. The following three projects showing investment opportunities have been identified: (a) rehabilitation of 25,000 ha of olive orchards, mechanization of olive harvesting, and pistachio crop introduction in selected areas; (credit needed, US$5.6 million); (b) growing early table grapes in plastic houses on 1,000 ha in the Algarve region for the local market and for export (credit needed, US$30 million); (c) growing kiwi fruit on 500 ha in the Entre Douro e Minho region for the local market and for export (credit needed, US$5 million). Total credit for the three projects amounts to US$40.6 million. Priority should be given to developing a project to increase production of hazelnuts and walnuts. - 122 - ANNEX4 Page 1 I. TOTALAREA, PRODUCTIONAND YIELD OF FRUIT, OLIVES, AND GRAPEVINES 1. Total area and production of fruit, olives and grapevines for the years 1976 to 1980 are shown in Table 1 at the end of this annex. The total area planted with fruit trees in Portugal reached 272,194 ha in 1980. The last census of olive trees was made in 1954. In that year, the olive trees covered 884,995 ha, of which 569,634 ha were in solid plantings. A new olive tree census is due to start soon. The olive tree hectarage has probably not decreased substantially since 1954. The wine vineyards cover roughly 359,000 ha, and the field fruits (melon, strawberry, etc.) occupy about 4,000 ha. Excluding the scattered olive trees, the total area planted with fruit, olives, and grapevines was about 1,203,078 ha in 1980, representing 35X of the cultivated area. Most of the fresh fruit trees are irrigated, and this irrigated area covers 175,700 ha, or 25Z of the country's irrigated area. 2. Table 1 indicates a decrease in the production of fresh fruit: 441,595 tons in 1980 against 561,844 tons in 1976, and the same trend for dry fruit; 32,492 tons in 1980 against 59,733 tons in 1976, on about the same areas for both types (paras 94 and 95). The olive production varies greatly according to the alternate bearing habit of this crop and the annual rainfall, as olive growing is rainfed. The production of table grapes (normally an irrigated crop) has increased steadily from 33,250 tons in 1976 to 62,050 tons in 1980. The production of grapes for wine is always under rainfed conditions and therefore the yield varies with the annual rainfall. On average, grapes yield an annual production of 10 million hectoliters of wine. 3. Yields of fruit depend very much on the level of technology used by the farmers, as climatic and soil conditions are usually very suitable. The following low, average, high, and achievable yields are based on the mission's findings and on data established by the farm accounts information system. Rainfed or Yield in tons per hectare /a Fruit Irrigated Low Average High Achievable Plums irrigated 4.0 6.0 10.0 15.0 Cherries irrigated 2.0 4.0 6.0 10.0 Apricots irrigated 3.0 6.0 8.0 15.0 Citrus irrigated 10.0 25.0 35.0 40.0 Apples irrigated 8.0 20.0 30.0 50.0 Pears irrigated 7.0 15.0 20.0 30.0 Peaches irrigated 6.0 15.0 20.0 25.0 Almonds in shelle rainfed 1.0 1.5 2.0 3.0 Hazelnuts in shells rainfed 1.0 1.5 2.5 3.0 Chestnuts in shells rainfed 1.5 2.0 5.0 10.0 Walnuts in shells rainfed 1.0 1.5 2.0 3.0 Table olives irrigated 3.0 4.0 5.0 10.0 Olives for oil rainfed 0.5 0.75 2.0 2.5 Table grapes irrigated 5.0 10.0 15.0 20.0 Wine grapes rainfed 3.0 7.0 10.0 15.0 Watermelons irrigated 15.0 25.0 40.0 65.0 Melons irrigated 8.0 12.0 20.0 25.0 Strawberries irrigated 8.0 12.0 20.0 23.0 la Figures given for yield are for trees at full development, 10 years for stone fruits; 12 years for pome fruits; 14 years for citrus; 20 years for olives; and 10 years for grapes. ANNEX 4 - 123 - Page 2 II. TOTAL PRODUCTION AND YIELD OF FRESH VEGETABLES 4. Annual production of the main fresh vegetables for the years 1973 to 1980 is given in Table 2. This table shows a stagnant production in the past eight years of around 1.1 million tons per year. 5. Table 3 shows the area, production, and yield of tomatoes for paste processing and of dry beans for the years 1971 to 1979/1981. Production of tomatoes for concentrates has been steadily decreasing from 804,077 tons in 1975 to 430,560 tons in 1982. Yield per hectare was lower in the 1970s (around 28 tons in the years 1976/80) than in the 1960s (around 35.2 tons in the years 1966/70). Dry beans are an important crop associated with maize (258,000 ha in 1982), but the production has been going down slowly from 66,840 tons in 1971 to 33,540 tons in 1982. 6. Yields of vegetable crops depend a great deal on the level of technology used by the farmers and on soil and climatic conditions. The following low, average, high, and achievable yields are based on the mission's findings and on data established by the RICA: Yields in tons per hectare Vegetable Type of Crop Low Average High Achievable Tomato open field 15.0 25.0 35.0 40.0 greenhouse 30.0 60.0 80.0 100.0 Pepper open field 6.0 12.0 19.0 25.0 greenhouse 15.0 20.0 25.0 45.0 Onion open field 15.0 26.0 40.0 50.0 Lettuce open field 4.0 6.0 10.0 12.0 greenhouse 10.0 15.0 20.0 25.0 Pea (fresh shelled) open field 2.0 2.5 3.0 3.5 Green bean open field 3.0 4.0 6.0 7.5 Carrot open field 15.0 20.0 25.0 30.0 Cabbage (green) open field 10.0 12.5 20.0 25.0 Broad bean (in pods) open field 5.0 7.0 10.0 12.0 Dry bean mixed with maize 0.14 0.17 0.2 0.3 (Phaseolus) solid planting 0.8 1.0 2.5 3.0 Potato open field 6.0 10.0 30.0 40.0 ANNEX 4 - 124 - Page 3 III. PLACE OF HORTICULTURE IN PORTUGUESE AGRICULTURE IN TERMS OF AREA AND PRODUCTION 7. In 1980, the area under horticulture crops and the tonnages produced were as follows: Crop Area Production (ha) (tons) Fruit trees 272,924 474,087 Olive trees (excluding scattered trees) 400,000 250,000 Table grapes (6,000) /a 62,050 Wine grapes 355,000 1,003,550 (wine) Field fruit (4,000) /a 26,000 Fresh vegetables 76,395 lb 1,036,850 Tomatoes for processing 18,051 456,638 Dry beans 272,678 50,004 Potatoes 113,849 1,117,920 Total ha 1,518,897 /a Estimate. /b Figure obtained from an average production of 15 tons/ha/year. The total and irrigated areas under horticultural crops in 1980 represented about 49Z of the cultivated land and 56Z of the irrigated area. In terms of quantity and value, winegrapes were the first agricultural product, followed by fresh vegetables, potatoes, and olives; wheat (0.6 million tons) and maize (0.5 million tons) were next. IV. MAIN HORTICULTURAL CROPS BY AGRICULTURAL REGIONS OR DISTRICTS (INCLUDING FLOWERS, TOBACCO, AND GREENHOUSE HORTICULTURAL CROPS) Citrus 8. Among the countries of the Mediterranean Basin, Portugal is the tenth citrus producer, with a 1979-80 total production of 171,000 tons. About 170,000 tons are consumed by the internal market, and 1,000 tons are exported. Portugal is a small citrus producer in relation to the total production of the Mediterranean Basin, which reached 12 million tons in 1979-80. 9. Citrus are grown in all agricultural regions of Portugal as illustrated below: -125 - ANNEX 4 Page 4 Region Area in hectares a/ Algarve 9,000 (7,815) Ribatejo e Oeste 2,318 Alentejo 2,535 Tras-os-Montes e Alto Douro 600 Beira Litoral 500 Entre Douro e Minho 250 Beira Interior 100 Total Citrus area 15,303 ha a/ a/ These figures from the Plano de Mudanca da Agricultura (PMA), 1982, do not match the official statistics (see Table 1), which are considerably higher. The National Institute of Statistics (INE) shows 7,815 ha in the Algarve region for 1982. 10. Except in Algarve and in limited areas of Ribatejo e Oeste, citrus have been grown traditionally in climatically marginal areas. The Algarve region has very suitable climatic and soil conditions for citrus growing (see maps IBRD 17197) and better climatic conditions than several major citrus areas of the world: the incidence of frost is lower in the Algarve region than in Florida (USA), California (USA), Valencia (Spain), and the Bay of Naples (Italy). In comparison with other regions of Portugal, the agricultural development of the Algarve region started late, and in 1950 there were only 1,500 ha of citrus in the region. With new irrigation schemes, the citrus area in the Algarve region could be extended from the present 9,000 ha to 18,000-27,000 ha.'' 11. The breakdown of citrus production according to species is as follows: Oranges 76% (130,000 tons) Lemons 11% (20,000 tons) Tangerines and clementines 11% (20,000 tons) Others 2% 100% Apples 12. The present area under apple trees is estimated to be 17,000 ha and falling. The figure of the National Institute of Statistics (INE) of 27,291 ha in 1980 does not match that of the Plano de Mudanca da Agricultura (PMA) of 17,100 ha. The official production in 1980 was 127,644 tons. I/ See Algarve - Plano de Mudanca da Agricultura - Citricultura (coordinator: J.F.P. Asuncao), 65 pages, 1982. ANNEX 4 - 126 - Page 5 13. Apple trees are grown in all agriculturalregions of Portugal,as illustratedbelow (from the PKA): Area in hectares Region Present Possibleextension Ribatejoe Oeste 7,500 6,000 Beira Interior 3,400 2,600 Entre Douro e Minho 1,700 1,000 Tras-os-Montes 1,050 1,450 Alentejo 350 300 Algarve 100 90 Total apple area 17,100 15,040 14. Climatically,the first four regionsare suitablefor apple growing. However, in Ribatejoe Oeste, Beira Interiorand Entre Douro e Minho, there may exist low areas with too cool winters for normal apple tree growthand for high-qualityapples. Most of the Alentejoclimates and all Algarveclimates are unsuitablefor growingapple trees. The PMA estimatesthe possible extensionof the apple area by 15,040ha and mentionsa total nationalarea of 51,200 ha as suitablefor growingapple trees. However,the first objective should be to increaseproductivity rather than the area. Pears 15. The presentarea under pear trees is nearly 8,000 ha. The figureof the INE for 1980 (see Table 1) indicates9,188 ha, against 7,000 shown in the PMA. The officialproduction statistics for 1980 show 58,602 tons. 16. Pear trees are grown in all agriculturalregions of Portugalas illustratedbelow (from the PHA): Area in hectares ReRion Present Possibleextension Ribatejoe Oeste 4,400 4,400 Beira Litoral 540 540 Beira Interior 490 490 Alentejo 460 460 Entre Douro e Minho 350 300 Algarve 380 380 Tras-os-Montes 270 370 Total pear area 7,000 7,000 17. Climatically,most regionsare suitablefor pear growing. In the Alentejoregion, only small areas with relativelycold wintersare suitable for pears,and only varietieswith low chillingrequirements are suitablefor the Algarve region. The PMA estimatesthe possibleextension of pear area at 7,000 ha and mentionsa total nationalarea of 19,300ha as suitablefor pear growing. There is an intensivepear growingarea northwestof the Ribatejoe Oeste regionnear Alcobaqawhich is highly suitablefor pear growing. ANNEX 4 - 127 - Page 6 Peaches 18. Figures on peach area and production published by the INE (see Table 1) seem to be far from accurate: in 1976, 11,353 ha producing 79,251 tons; in 1980, 10,430 ha and 33,012 tons. The PMA estimates the present national area under peach trees at 8,700 ha. 19. Peach trees are grown in all agricultural regions as illustrated below (from the PMA): Area in hectares Region Present Possible extension - Ribatejo e Oeste 4,600 5,200 Alentejo 1,500 1,700 Beira Interior 700 1,000 Beira Litoral 650 800 Algarve 500 500 Entre Douro e Minho 410 300 Tras-os-Montes 340 500 Total peach area 8,700 10,000 20. Climatically, many zones of the interior beginning 40 km away from the coast are suitable for growing high-quality peaches. Particularly worth mentioning is the outstanding peach area long the dam of the Sorraia irrigation scheme near Montargil, where the climate and coarse sandy-loamy soil are excellent for growing peaches under irrigation. The Algarve region is suitable only for early peaches that have a low chilling requirement. The PMA estimates the possible extension of peach area at 10,000 ha and mentions a total national area of 43,500 ha as suitable for peach growing. Almonds, Hazelnuts, Chestnuts and Walnuts 21. Table 1 shows for 1980 a national production of 4,240 tons for almonds; 1,216 tons for hazelnuts; 20,224 tons for chestnuts; and 6,812 tons for walnuts. The same table indicates for about the same areas a decrease in production from 1976 to 1980 for the first three dry fruits, especially for almonds and chestnuts. This situation could be explained as follows: both almond and chestnut trees are treated like forest trees; they are very old and no new plantings have been done. 22. On a regional basis, the PMA gives the following existing areas worthy of rejuvenating or replanting: ANNEX 4 - 128 - Page 7 Dry fruit area (ha) Region Almonds Hazelnuts Chestnuts Walnuts Tras-os-Montes 13,000 500 9,000 1,000 Entre Douro e Minho - 500 500 200 Beira Litoral 500 8,500 1,500 1,500 Beira Interior 4,500 500 8,000 100 Ribatejo e Oeste - - 1,200 Alentejo 500 - 1,000 500 Algarve 15,000 - - 79 Total 33,500 10,000 20,000 4,579 For hazelnuts, there is a large disparity between the actual total area given in Table 1 (912 ha) and the above-mentioned total estimate to be replanted or rejuvenated (10,000 ha). The PMA estimates for possible extension of dry fruit areas seem very high: 76,500 ha for almonds, 100,000 ha for hazelnuts; 45,000 ha for chestnuts; and 70,000 ha for walnuts. Olives 23. Like most countries of Southern Europe, North Africa and the Near East, the olive crop is traditional in Portugal. Many trees are old, often several centuries old. Tradition and social culture are against pulling out olive trees, so that olive trees are found scattered over most of the country. The last census, carried out in 1954, shows 884,995 ha as the total area covered with olive trees, with 569,634 ha of solid-planting orchards. The same census indicates a total number of 49,495,997 live trees. The average annual olive production for oil processing between 1975/76 and 79/80 was 294,297 tons that ga-:ean annual average for Portugal of 45,966 tons of olive oil (15.6% of the raw product). 24. Statistics on regional distribution of olive area and production are given in Table 4, which illustrates for each of the eighteen districts of the country; the total olive area; the solid-planting orchard area; the number of olive trees; the annual average quantity of olives processed for oil between 1975/7b and 1979/80; and the average volume of olive oil produced per year. Besides olive oil, an average of 20,000 tons of table olives are produced annually, as illustrated in Table 1. Tras-os-Montes is the main region for production of table olives, followed by Alentejo. Figures given in Table 4 are interesting. There are four outstanding olive growing districts -- namely, Beja, Evora, Portalegre, and Santarem -- with more than 40,000 ha of solid-planting orchards, each producing an average of about 40,000 tons of olives annually between 1975 and 1980, or the equivalent of I ton/ha. In the same period, the olive trees with the best yield were those of Beja district, with 12 kb/tree, and those with the lowest yield were from Leiria district, with 1.84 kg/tree. - 129 - ANNEX 4 Page 8 25. The followingfigures illustratethe continuousdownward trend of olive productionin Portugalsince the 1950s. The olive crop area has probablydecreased to some extent in the last three decades,but the main reasons for continuousdecreasing production through the years are the abandonmentof old trees in marginalareas and the worseningof orchard managementbecause of increasingoperation costs. Productionof olives Volume of Oil Year for oil (tons) (1.000liters) 1957 642,776 110,157 1958 370,919 67,262 1959 619,956 99,972 1960 586,881 94,201 1961 770,718 125,779 1962 334,370 57,971 1963 715,621 108,437 1964 255,362 45,040 1965 511,074 78,770 1966 248,287 41,426 1967 547,086 87,922 1968 354,098 58,084 1969 492,027 79,049 1970 433,992 73,475 1971 275,166 45,777 1972 387,469 58,816 1973 211,231 45,749 1974 321,512 52,560 1975 314,661 53,857 1976 259,136 39,148 1977 212,323 32,735 1978 303,715 43,900 1979 389,62 62,480 1980 215,284 34,925 1981 160,900 25,100 1982 185,200 28,890 1983 /a 448,718 70,000 /a Provisionalfigures. The above figuresalso show the alternatebearing habit of the olive groves, which is a normal feature for a winter rainfedand summer dry farmingtree crop. The 1982 olive productionwas exceptionallyhigh, (the highest in the last 14 years), after two years (1980 and 1981) of very low yield becauseof three years of exceptionaldrought. Wine Grapes 26. Grapevinesfor wine are by far the largestcrop in Portugalin terms of productionand value of product,employing 20% of the agricultural workers. Grapevineproducts represent about 13% of the gross agricultural product. Delimitedregions, rather than agriculturalregions, apply to - 130 - ANNEX 4 Page 9 grapevines. The main areas of grapevine production correspond to delimited regions with their own genuine wine name, as wine quality depends much on the local climate, soil, vineyard site, vine clones and the role of local microflora in wine making (see map IBRD 17197). The idea of delimiting regions originated in the Douro valley with the famous Porto wine. Thereafter, delimited regions were organized in the main European grapevine growing countries, with France as the dominant producer of vintage wines. 27. Provisional official and uncompleted figures (March 1983) established by the Junta Nacional de Vinhos for grapevine areas according to delimited regions are as follows: Area Region VQPRD Standard wines Total …------(ha) Vinhos Verdes 15,000 45,000 60,000 Douro 25,000 5,000 30,000 Dao 4,000 16,000 20,000 Colares 17 17 34 Bucelas 96 Carcavelos 17 - - Moscatel de Setgbal 81 Bairrada 1,450 Algarve 5.000 Other regions of continental Portugal 3,200 (rosis) Madeira 800 1,000 1,800 Acores 2,600 2,600 Total ha 59,721 310,445 359,166 Each delimited region with rights for using a genuine wine name (abbreviated by the acronym VQPRD) is surrounded by an area producing standard wines. The number of vine-growers is estimated to be 250,000, each of them owning an average of 1.25 ha of grapevines. Vineyards are producing (according to climate, soil, vine clones, vine age, and management), from 20 to 60 hectolitersk' of wine per hectare. Table Grapes 28. The official production of table grapes in 1980 (see Table 1) was 62,050 tons for the whole country. No recent census of vine area for table grapes exists. In 1973 the following planted area by region had received licenses for producing table grapes: 1/ One hectoliter of wine requires on average 135 kg of grapes. - 131 - ANNEX 4 Page 10 Region Area (ha) Alto Alentejo 2,719 Ribatejoe Oeste 1,550 Baixo Alentejo 1,352 Algarve 1,094 Setcbal e Outra-Banda 230 Others 277 Total 7.222 The PMA estimatesthat, Lththe new vineyardsplanted since 1973, the present total vine area for table grapes is around 10,000ha. This figureappears to be somewhathigh, comparedwith 5,500 ha shown in Table 1 for 1979. No informationis availableon the percentageof the irrigatedarea, except for the Algarveregion when, in 1979, out of a total of 1,170 ha, only 120 ha were irrigated. Figs 29. Figs are a neglectedcrop in the Mediterraneancountries and in Portugal. In the past figs were an importantsubsistence crop. Solid plantingsare rare, althoughthe quantityof figs producedis still high in severalneighboring countries. 30. Fig trees are seen in all seven agriculturalregions of Portugal,but the bulk of the fig tree plantingsare locatedaround TorresNovas (Ribatejo) and Baixa Litoral (Algarve). The last accuratestatistics on fig production date back to 1963, with the followingfigures: Region Tons of Figs TorresNovas 14,026 Algarve 8,070 Other areas 8,561 Total 30,656 Regardingthe area under fig trees,the last census (1957)gave the following data for the Algarve region: Ha Fig trees in solid plantings 16,566 Fig trees mixed with almond trees 16,203 Fig trees mixed with carob trees 1,4c Fig trees mixed with olive trees 80oz Fig trees mixed with other crops 15,058 All fig trees ir the countryare rainfedand fig growingcould not be improved to make figs an economicalcrop. Twenty-fiveyears ago, these plantings,both solid or mixed, were abandonedor a start was made to pull out. In the Algarveregion, pulling out of fig trees startedin the 1950s with the advent - 132 - ANNEX 4 Page 11 of tourism and irrigated crops. The PMA estimates that in 1982 the total area under fig trees in the Algarve region was down to 12,000 ha, including the area where fig trees are mixed with other crops. The Junta Nacional de Frutas puts the production figure in the same agricultural regior.at 10,000 tons in 1970 and down to 4,000 tons in 1980. The official data of the INE do not match the above figures, as Table 1 shows a total unchanged fig tree area of 85,000 ha from 1976 to 1980, and a production of 62,350 and 51,000 tons, respectively, in 1976 and 1980. If the same decline in fig growing occurred around Torres Novas and other regions as in the Algarve region, the total production in 1980 could not have been higher than 15,000 tons. Fresh Vegetables 31. The main fresh vegetables produced in Portugal are, by order of decreasing tonnage: cabbage, tomato, carrot, onion, green beans, broad beans, bell pepper, lettuce, cauliflower, and pea (see Table 2). Accurate statistical data on area and production by agricultural regions are not available. It is estimated that 802 of the fresh vegetables in open-field production are grown on a narrow strip along the coast. On this coastal strip, five main vegetable production areas can be distinguished (see Map IBRD 17197): (a) southern Ribatejo: north of Lisbon near the towns of Loures and Villa Franca de Xira, and south of Lisbon in Outra-Banda and Setcbal Peninsula, which is the most important area for supplying Greater Lisbon with mid-season and winter vegetables; (b) northwestern Ribatejo e Oeste: around Lourinha, Caldas da Rainha, and Alcobaga for supplying Lisbon, Santarem, and Coimbra; (c) northwestern Beira Litoral: around Aveiro, cultivating a large percentage of the total 10,000 ha of the Beira Litoral region and supplying mainly the Porto market; (d) Entre Douro e Minho: north of Porto, mainly near the towns of Villa do Conde and Puvoa de Varzim, where vegetable crops are grown mainly in "maceiras" (troughs) for early vegetables to supply the Porto market; (e) the Baixa Litoral of the Algarve region, where about 4,000 ha of early vegetables are grown to supply the nearby tourist zone and the markets of the country's main cities. 32. It is worth giving a brief description of vegetable growing in "maceiras" north of Porto, as it is probably unique in the world. Maceiras are like huge bread dough kneading-troughs from 2,000 m2 to 20,000 m2 in area, dug in sand dunes. They are from 3 m to 5 m deep, in the past being dug by hand, but in recent years being dug by bulldozers. The depth depends on the water-level which must be 0.5 m to 1.0 m below the soil surface of the "troughs". The soil is dune sand, and the water level (always considerably higher than the sea level) is held close to the surface by a heavier subsoil. The cultivated soil is treated with large amounts of manure and sea algae as well as with nitrogen fertilizer. The irrigation is by sprinklers and a drainage network links the maceiras to drain excess water to the sea. The cropping system is very intensive, with three to four crops a year of various vegetable species grown in rotation. The walls of the maceiras have gentle slopes similar to those of a kneading-trough. The three walls exposed to the sun are covered with vines for making the wine Vinhos Verdes. The fourth wall is covered with grass to hold the sand. The climate inside the maceiras is like that of a well-ventilated greenhouse and therefore early vegetables can be produced. A family seems to make a good living, through hard work, on an average of 0.5 ha. No data on costs of production, yield, and income could be obtained from the maceiras vegetable growers, who elude questions. The total area of maceiras is said to cover 1,000 ha. ANNEX 4 - 133 - Page 12 Tomatoes for ProcessIng 33. Total area, production, and yield of tomato for processing in the 1976/70 period and from 1971 to 1982 are shown on Table 3. For 1980, the INE gives the following data by district: Arca Production Yield Production District (ha) ('000 tons) (tons/ha) () Santarem 5,306 166.9 31.4 36.6 Portalegre 1,474 71.2 48.3 15.6 Lisboa 2,488 64.9 26.1 14.2 Beja 4,312 57.7 13.4 12.6 Setqbal 1,939 43.4 22.4 9.5 Evora 1,546 40.2 26.0 8.8 Castelo Branco 751 7.3 9.7 1.6 Leiria 128 2.9 23.0 0.6 Faro 94 1.8 19.6 0.3 Other 13 0.3 20.5 0.02 Total 18,051 456.6 25.3 100.00 Average yield for most districts is close to the country's average, except in Portalegre, which is higher (48.3 ton/ha), and in Castelo Branco and Beja, where it is lower (9.7 tons/ha and 13.4 tons/ha respectively). These variations of yield by district in 1980 were not by chance. Yields in 1978 and 1979 showed similar trends by district, when they were also high for Portalegre and low for Castelo Branco and Beja districts. Dry Beans 34. Dry beans in Portugal include two botanic6i genera: naamly, Phascolus and Vigna. Total area, production, and yield of dry beans frum 1971 to 1982 are! shown in Table 3. The area, production, and yield for 1979 and the percentages for 1979 and 1979-81 by agricultural region have bccni as follows (from P'IAand MElS): Are.a Production Yield Produetiori Average' Re,ginn (ha) (tons ) Kg/lia 2 % (1979) (1979) (1979) (1979) (1979 -81) Entre Douro e Minho 123,260 15,430 125.0 40.2 S s Beira Litoral 82,811 10,230 131.3 26.6 33.0 Ribatejo c Oeste 23,589 5,940 291.3 14.3 8.6 Bcira Interior 17,278 3,545 205.0 9.2 8.1 Tr@s-Os-NMntes 7,721 1,280 181.6 3.3 2.9 Alentejo 4.679 1,620 341.0 4.2 2.3 Algarve 634 320 505.0 0.8 0.2 Total 259,972 38,360 147.6 100.0 100.0 ANNEX 4 - 134 - Page 13 Most of the dry bean crop is grown in associationwith maize. This kind of croppingsystem explains partly at least the very low yield obtainedin all regions. Potatoes 35. Togetherwith grapevineand olive, potatois one of the three main horticulturalcrops of Portugal. Officialdata from the INE show the followingfigures for the potatocrop: Year Area Production Yield (ha) (tons) (Tons/ha) 1970/79 (average) 113,181 1,096,347 9.7 1979 t08,027 1,020,630 9.5 1980 113,849 1,117,920 9.8 1981 107,600 828,520 7.7 1982 125,000/a 1,000,000 8.0 /a Provisionalfigure. In the past 12 years, the annual area and productionhave varied very little from 100,000- 110,000ha and from I million to 1.1 million tons, with yield close to 10 tons/haup to 1980 and close to 8 tons/hain 1981 and 1982. 36. Accordingto the INE, the percentagesof area and productionby agriculturalregion have been as follows (average1979-81): egion S Area Beira Litoral 27.9 Tr@s-Os-Montes 18.2 Entre Duro e Minho 16.7 Be:ra interior 16.0 Ribatejoe Oeste 15.1 Alentejo 4.9 Algarve 1.2 ,100.0 S These figures illustratethat more than 95S of the potatoesare grown in the five northernagricultural regions of Portugal. Flowers 37. Floriculturein Portugalincludes: cut flowersand foliage,mainly carnation.rose, gladiolus,and asparagusfoliage; potted ornamental plants; propagationmaterial, mainly carnationcuttings; and bulbs and tubers of various plants. The total area of flowers increasedfrom 130 ha in 1977 to around 240 ha in 1982 and flowergrowers numbered approximately 240. Most of the flowerfarms are locatedin coastalstrips in two long areas: one from Viana do Castelonorth of Porto down to Setgbal;and the second in Baixa Litoralin the Algarve. ANNEX 4 - 135 Page 14 Tobacco 38. Tobaccogrowing was prohibitedin Portugal from 1927 to 1975, as the crop had to be grown in the former colonies. Tobacco growing in Portugal started in 1926 on 182 ha with Virginia-typetobacco, from which 336.8 tons were produced (1,846 kg/ha). The area under tobaccowas slowly developedand in 1981, 1,112 tons of Virginia and 41 tons of Burley types were produced. 39. The Virginia tobaccoarea and curing installatio by region,in 1981, were as follows: Number of Curing Installations Area Heated Traditional Region (ha) Chambers Shelters Beira Interior 270 66 5 Ribatejo e Oeste 282 69 4 Alentejo 250 74 2 Total 811 209 11 The Burley-type tobacco has been grown mainly on an experimental basis in some areas of Beira Litoral and Ribatejo e Oeste regions. Greenhouse Horticultural Crops 40. Vegetable and fruit growing in plastic houses and under plastic tunnels started in Portugal around 1965, later than in other southern European countries like Italy, France, Spain, and Greece. Flower growing in plastic houses started in the 1970s. Most of the greenhouses are built a few kilometers from the coast, south of the Tagus river, and mainly in the Algarve region. In 1982, the area under plastichouses by regionwas approximatelyas follows: Region Area (ha) Algarve 450 Ribatejo e Oeste 200 Other regions 100 Total 750 41. lI the Algarve region,where mild winters, high sunshineand absence of frosts (see Maps IBRD 17254 and 17255)allow the cultivationof very early maturing crops, the percentagesof vegetablesand fruit presentlygrown in unheated plastichouses are as follows: Tomato 80 Bell pepper 6 Early table grape 5 Muskmelon 2 Green bean 1 Cucumber 1 Others 5 100T ANNEX 4 - 136 - Page 15 42. In Ribatejo e Oeste and in particular in plastic houses located near Torres Vedras and Caldas da Rainha, tomato is the main winter crop, lettuce for harvesting between October and March is second, followed by cucumber, green beans, muskmelon, and tomato. Yields of around 80 tons of tomatoes per ha are considered high in the Algarve greenhouses. Early table grape is a new crop under plastic, and at a spacing of 2.5 m x 1.2 m between vines, 20 tons per ha are normally obtained. V. SEASONAL FLUCTUATIONS AND STABILITY OF FRUIT AND VEGETABLE PRODUCTION 43. The seasonal fluctuation of main fresh fruit production is illustrated graphically in Table 5. Section I of the table shows that fresh citrus are available on the markets from late October to approximately the end of July with the Valencia late orange. Citrus are not available for 2 1/2 months (August, September, and part of October). 44. Section II of Table 5 indicates that fresh deciduous fruits start to come on the market from the second part of April with early cherries, and end late in October, with fresh apples. The cherry season lasts until the end of August. Early apricots ripen beginning mid-May and late ones ripen until mid-August. Early peach varieties ripen around mid-May in the Algarve region, and late peach varieties can be found on the main markets until the end of September. Early pears begin to ripen in the Algarve region around mid-June, and late varieties are picked in various regions urcil mid-October. Early apples appear on the market in July and the main bulk of varieties are picked from the end of September to almost the end of October, according to region. The plum season starts in June and ends around mid-September. Large quantities of apple and minor quantities of pear are kept in cold storage until the end of March. 45. Section III of Table 5 shows an interesting production season for table grapes, from early June to near the end of October. Cardinal variety is the earliest, and in the Algarve region and in unheated plastic houses it ripens at the end of May, or in very early June in the Baixa Litoral zone from Faro to Gacela. This is probably the earliest grape produced in Europe in unheated greenhouses, and it could be an investment opportunity in view of Portugal's anticipated entry into the EEC (paras. 126 and 131-135). Very few grapes are kept in cold storage to extend the marketing season. The main varieties grown from earliest to latest ripening are: Cardinal, Alphonse Lavallie, Dona Maria, and Moscatel de Hamburgo. VI. FARM STRUCTURE IN HORTICULTURE 46. Due to its particular geographic situation between the Atlantic Ocean and the Mediterranean Sea, Portugal enjoys climatic conditions that are suitable for growing a very large number of fruit and vegetable crops. The preceding sections of this Annex have described the areas, production, and regional distribution of 43 crops (26 fruit, 14 vegetable crops, plus potatoes, flowers, and tobacco). This Annex, which is a genera] survey on the horticultural subsector does not intend to discuss in a detail the extremely varied subsector structure. However, synthesized views or examples are given in the following paragraphs for the major crops. - 137 - - 137 ~~~~~~ANNEXPage 164. Citrus Farms 47. The majority of the citrus farmers in the Algarve region are specialized and as a whole do not grow other crops. The farm size varies from 1 to 30 ha, but by far the largest percentage is in the range of 1 ha to 3 ha. Irrigation water is generally from either shallow or deep wells. Farmers on smaller citrus farm sometimes grow early vegetables in open-field production or in plastic houses. Three to four decades ago the same farmers were growing wheat between fig, almond, and carob trees under rainfed conditions. With the development of tourism, they shifted first to vegetable crops and later to both vegetables and citrus (or for the larger ones, to citrus only). Fresh Fruit Tree Farms 48. Fresh fruit tree farms (apple, pear, peach) are usually irrigated, but sometimes rainfed. In the latter case, they are located in northwestern coastal areas in soils with high water-holding capacity. Basically, there are four types of fresh fruit holdings: the large farm from 30 ha to 300 ha, usually organized in companies and growing together apples, pears, and peaches, or one or two of these only. This farm type represents a very small number. The second type is medium size (from 10 ha to 25 ha), with a private owner specializing in one or two fruits only (apples, pears, and peaches). The third type is represented by small farms from 0.5 ha to 3 ha, for instance in Alcobaga area, specializing in horticultural production of apples, pears, grapevines and vegetables (mainly carrots). The owner is usually a part-time farmer and works in a factory as well. Many fruit farms are of this model. The fourth type is the mixed farming. The farm size is from 3 ha to 20 ha (often close to 3 ha) with about half of the area in fresh fruit (apples or peaches), potatoes in rotation with vegetables, maize and a forage crop, and I to 5 milk cows. Farms with Dry Fruit Trees or Fig Trees 49. This type of farm is not a fruit farm but a traditional farm with field crops and/or pasture, with scattered dry fruit trees under rainfed conditions. Two examples follow. In the Algarve region, the average traditional farm is from 1.5 ha to 3 ha, with pasture and/or wheat, scattered almond and/or fig trees, and some vines. This farm is below subsistence level, and the rainfed crops are being replaced by vegetable and citrus when irrigation water is available. A similar rainfed farm is common in TrQs-os- Montes, where soils are poorer than in the Algarve region, the average size is larger (6 ha), the field crop is wheat or rye, and the scattered fruit trees are almonds. Olive Farms 50. The typical olive farms are located in the Alentejo region, where the size varies greatly from 10 ha to more than 300 ha. The tree density is 50-100 trees per ha. Olive trees are usually old, and clean cultivation is practiced. When the farm size is below 50 ha, the farmer normally owns other pieces of land where wheat is grown and sheep are tended. In the five or six zones of the Alentejo region that are suitable for wine grapes, the typical farm is about 10-15 ha, with two-thirds of the area planted with vines and one-third with olive trees, and the farmers may have a few sheep as well. In this type of cropping system there is a tendency to replace the olive trees by wine grapevines, which are much more profitable. ANNEX4 - 138 - Page 17 GrapevineFarms 51. ln the 250,000wine grape farms of Portugal,there are infinite varietiesof croppingsystems: farms specializedin vines only; or vines interplantedwith fruit trees;or vine rows betweenvegetable fields and betweenfield crops or pastures. In the five main wine regionsof Portugal (VinhosVerdes, Douro, Bairrada,Dio and Algarve),the generalcharacteristic is the extreme land fragmentationwhich resultsin very small plots, sometimes not more than 1,000 m2 each, and the size of the farm is rarelymore than 2 ha. Often farms are not more than I ha in total area and very rarelygo up to 5 ha. 52. An exampleis given here for the Dio wine region where the land tenureis characterizedby an extremefragmentation (an averageof 10 plots per farm) and by the very small size of the farms (an averageof 1.83 ha per farm). The average croppingsystem in this farm is: from 1,000 m2 to 5,000 mz of grapevine;from 500 m to 2,500 m2 of olive trees; the same area with potatoesor vegetable;and from 3,000 m2 to 10,000m 2 of cerealsand legumes (for cattle). This type of farm is generally too small to sustain a family and leads to emigration of the farmers. Fresh VegetableFarms 53. One may distinguishat least four categoriesof vegetablefarms: (a) The first is the specializedvegetable farms. Most of them are locatedin the five main vegetableregions (see IBRD 17197). The vegetablesare grown in rotation,and there are generallytwo crops a year, (sometimesthree in milderclimates, such as in Algarve). The averagefarm sizes vary from 0.5 ha to 2 ha, and most of the labor comes from the family. (b) The second type is the vegetablefarm of the part-timegrower who is a factoryworker. He grows the vegetablesfor the familyand the surplusis sold to the local market. He also normallygrows some deciduousfruit, grapevines for wine, and olive trees. The size of the farm is also very small (from 0.5 to 2 ha), and the area devoted to vegetablesis from 10% to 50%. These first two types together grow close to 100% of Portugal'sfresh vegetableproduction. (c) The third type includesthe farrnersgrowing vegetables (mainly tomatoes)for processingunder contractwith the processing factories,which supplythe seeds or plantletsand buy the production at a fixed price. The areas plantedby these farmersvary from I ha to 3 ha. This type of vegetablefarming started in the early 196Cs with the establishmentof the first tomatoconcentrate factories. It representsan importantpart of the vegetableproduction, as in 1973 tomatowas grown under contracton 26,135ha that produced824,325 tons and in 1980 it was grown on 18,051 ha that produced456,638 tons (see Table 3). (d) The fourth type of vegetablefarm is that of the agricultural productioncollective (UCP) or communalfarm that took origin from the 1976 agrarianreform. The land belongs to the Governmentand the farmingis done by a team of workerswho have a share of the UCP that cannotbe inherited. UCPs establishedin an irrigatedscheme grow ANNEK 4 - 139 - Page 18 vegetables (tomatoes, pepper, lettuce). In the Sorraia irrigated scheme, UCPs established near Mora and Couio grow lettuce, tomato, tobacco, and strawberries on the higher lands and rice in the low lands. In this case, tomatoes are grown under contract with a tomato concentrate factory. This type of vegetable farm makes up a very small percentage-of the national vegetable production. VII. SUPPORT SERVICES 54. The Ministry of Agriculture, Commerce and Fisheries (MACP) is undergsng a considerable reform, and it is not yet clear how the support services to farmers will be reorganized. Research and Extension 55. Both agriculture research and extension are now being integrated in one institute (INIAER). Regarding horticulture, research is carried out in three research stations: The Fruit Experiment Station at Alcobaca (Ribatejo e Oeste), the Wine Grape Research Station at Dois Portos (Ribatejo e Oeste), and the Greenhouse Vegetable Research Station at Faro (Algarve). The Alcobaqa Fruit Experiment Station, created in 1959, has 20 ha of experimental orchards and newly equipped laboratories. Fourteen university graduates work in research and extension at the station, including a fruit growing specialist, a plant pathologist, an entomologist and a biologist (meristem tissue culture), and extensionists. Research work is being done on pome fruit (apple and pear), on stone fruit (peach, cherry), and on nut trees (almond, chestnut, hazelnut, and walnut). The modern techniques on pome and stone fruit developed recently in northern countries are adapted at Alcobaga and applied in local farms. These techniques include high density planting and central axis pruning (1,200 pear trees/ha at 4 m x 2 m spacing; 1,000 apple or peach trees/ha at 4 m x 2.5 m), as well as growth regulators applied to pear trees. Recommended root stocks are MM106 for apples, Quince EMA for pears and GF305 for peaches. High-yielding clones of nut trees have been recently selected: R2gO walnut clone, from which 3 tons of walnut/ha can be expected with 300 treestha, when grafted on Nigra or Rexia, against 1 ton/ha with traditional clones; also 3 tons of hazelnuts/ha can be expected, with hazelnuts at spacing reaching 400 single trunk plants/ha, against 1 ton/ha with traditional clones. Local chestnut clones are good, with the result that the Portuguese chestnut has developed into an important export market (see Table 7). Phytophtora root diseases is an acute problem in chestnut growing, and a solution to it would probably increase the yield from the present 2 tons/ha to 10 tons/ha. There is no commercial nut tree nursery, and a constraint on planting orchards with newly selected clones is the lack of trees for sale. 56. The Greenhouse Vegetable Research Station was established in 1980/81 in cooperation with West German technical assistance. Research is being carried out in various structures to be -used for plastic houses, on types of ventilation and cooling systems, on types of irrigation equipment and on various winter and early spring vegetable production in greenhouses (lettuce, tomato, cucumber, and melon). Action Programs 57. Action programs approved by the Planning Bureau of the MACP are implemented by various services, namely, General Direction of Agriculture (DGA), General Direction of Plant Protection (DGPPA) now partly incorporated ANNEX 4 - 140 - Page 19 into the INAER,and seven RegionalDirections of Agriculture(DRAs). The RegionalDirections have becomesemi-autonomous from the formercentralized Ministryof Agriculture. The dutiesof the regionaland subregionaloffices includeextension and executionof action programs. Definiteterms of referencefor the above-mentionedservices are not yet officially established. Each RegionalDirection has a staff with a number of crop specialists,including fruit tree specialistsand vegetablecrop specialists. 58. Among horticulturalaction programs supervised by the DGA, the only one in operationseems to be the rehabilitationprogram for the olive crop. It is a subsidyprogram to olive farmerswho would accept recommendedand improvedgrowing techniques, such as tree top pruningand grafting with better varieties,chemical fertilization, olive fly and fungus controlwith sprays, as well as new plantingsexecuted with more intensivepractices. It covers four agriculturalregions (Tras-os-Montes, Beira Interior,Ribatejo e Oeste and Alentejo)including a totalof 240,000olive trees ha. 59. Three importanthorticultural action programsnot yet executedand under the responsibilityof the DGPPA which probablywill be includedin the INAER terms of referenceare the CertifiedSeed Potato ProductionProgram, the Fruit Tree NurseryPlant CertificationProgram, and the CertifiedVegetable Seed ProductionProgram. An attemptto set up the first one was made in the 1960s, in which Tras-os-Montesfarmers were invitedto propagatebasic seed under well-definedconditions. Lack of advice to farmers,lack of supervision,and lack of inspectionof the seed potato farms seem to be the main reasonsfor the program'sfailure. A new project for producingcertified seed potatowas started in 1980 with the cooperationof West German technical assistance. A considerableamount of hard currencyis spent each year for seed potato imports:in 1980, 29,363tons; in 1981, 17,086 tons; and in 1982, 53,334 tons. The value of 53,334tons at Esc. 30/kg was around US$18 million. 60. With the objectivethat high-qualityfruit trees be raised by private nurserymen, in 1945 the need for the creationof a_ nationalnursery for supplyinghigh-quality fruit plant materialwas apparent. In 1962, work was started to establishthe NationalNursery in Escaroupim,about 75 km north of Lisbon. For variousreasons and mainly becauseof lack of qualifiedpersonnel and finance,the programwas carriedout very slowlyand todayno fruit plant materialcertified true-to-type and virus-freeis yet suppliedto the nursery men. There are about 450 nurserymen with officiallicenses, plus a considerablenumber of small illegalones, the majorityof them operating around Coimbraand secondarilyaround Porto. The inspectionservice of DGPPA is deficient,and in many cases,the fruit trees (deciduousfruit tree, citrus,grapevines) sold by the nurserymen are neither true to variety nor diseasefree. By comparisonin France,all privatefruit tree nurseriesare inspectedperiodically by a governmentservice and at presentmore than 40Z of deciduousfruit trees and lOOS of citrus trees and vine varietiessold by nurserymen are certifiedvirus-free. 61. However,in Portugal,a grapevinecertification program has been set up. Some work has been implementedin cooperationwith nurserymen: 125 ha of mother stocksfor certifiedvine rootstockhave been plantedrecently, representing25Z of the grapevinenurseries need; and 17 Portuguesewine vine - 141 - ANNEX 4 Page 20 varieties have been submitted to thermotherapy;about four more years are needed before this clean and selected vine plant material can be supplied to licensed nurseries. For deciduous fruit and citrus, the certification program is less advanced; only some virus-free mother trees, eight per variety and mainly of citrus varieties having been planted in the National Nursery at Escaroupim. 62. No vegetable seed certification program has yet been set up in Portugal. Some standard vegetable seeds are locally produced, in particular cabbage and other Brassica sP. seeds by a few farmers for their own use and for sale. VIII. HORTICULTURALPRODUCTION AND HOME CONSUMPTION NEEDS 63. On the basis of 1980 data (para. 7) the total production of fresh fruit (including fresh fruit from trees and from field and table grape), fresh vegetables, and potatoes has been, respectively, 529,645 tons, 1,036,850 tons, and 1,117,920 tons. In the same year import of fresh fruit, fresh vegetables, and potatoes, respectively,has amounted to 3,892 tons, none at all, and 41,884 tons, and export has amounted to 6,145, 2,632 and 14,643 tons, respectively (see Table 7). Therefore, the home consumption of fresh fruit, fresh vegetables, and potatoes in 1980 has amounted to 527,392 tons, 1,034,218 tons and 1,145,161 tons, respectively. 64. Based on a total population of 10 million inhabitants, the Portuguese per capita annual consumption is 53 kg of fresh fruit, 103 kg of fresh vegetables, and 114 kg of potatoes. By comparison, the per capita annual consumption in France is around 63 kg of fresh fruit, 100 kg of fresh vegetables, and 70 kg of potatoes. These figures show that the Portuguese consume less fruit, the same amount of vegetables, and more potatoes than the French. With the increasing standard of living in Portugal, there will be a need for more fresh fruit, for equivalent amounts of vegetables, and for fever potatoes. IX. INCOMEFROM HORTICULTURE 65. Three types of income from horticulture should be distinguished. The first is from rainfed fruit tree horticulture, which is low to very low in terms of internal rate of return. Examples are olive, grapevine, and almond growing, although grapevine growing may be an exception in certain quality wine production cases. The second is from irrigated fruit tree growing (apple, pear, peach, and citrus) and from vegetable growing (lettuce, tomato, pepper, and cucumber), which may have relatively high rates of return when a high level of techr.ologyis used. The third type of income is from growing early horticulturaLcrops (lettuce, tomato, pepper, cucumber, melon, table grape) in mild winter climates or in unheated greenhouses in some climates, which may be very highly profitable under high levels of technology. Rainfed Olive Trees for Oil Processing 66. In traditionallymanaged 50-year-old orchards planted at a density of 100 trees/ha in the Elvas area, the annual operating costs per ha, including pruning, clean soil cultivation by tractor and disc plough, nitrogen fertilization, hand harvesting, and transport to the oil mill, are estimated at Esc. 15,000/ha. The threshold of positive income is situated around a yield - 142 - ANNEX4 Page 21 of 500 kg/ha, since the price per kilogram paid to the farmer is presently Esc. 30/kg. A yield of 500 kg/ha is the national average for off-year production (with the alternate bearing habit of the olive tree), and 1,000 kg/ha is the national average for in-year production. In a rehabilitated and well-managed orchard, such as was described in para. 58, the cost of operation would be about Esc. 30,000/ha and the average yield would reach 2,000 kg of olive per year, returning a net income of about Esc. 30,000/ha (USVIOO/ha). By inference, it pays to farm better. Irrigated Apple Trees 67. The following figures are averages of data received by the mission on two large deciduous fruit farms, one located near Elvas (Alentejo), the other north of Castelo Branco (Beira Interior), both operating with a relatively high level of technology: Costs and Income per ha (1,666 apple trees) in Escudos Establishment costs: Land 300,000 Plants 166,000 Well and pump 120,000 Drip irrigation equipment (including installation) 200,000 Espalier training material (including installation) 100,000 Deep plowing 25,000 Fertilizers 30,000 Labor (planting) 20,000 Total cost of establishment of 1 ha 961,000 or 661,000 of apple trees: excluding cost of land Operating Costs Yield Gross Income (Esc./ha) (tons) (Esc. 15/kg) Year 1: 50,000 Year 2: 100,000 Year 3: 150,000 5 to 20 75,000 to 300,000 Year 4: 200,000 15 to 30 225,000 to 450,000 Year 5: 30 to 40 450,000 to 600,000 Year 6: 35 to 50 525,000 to 750,000 Following years: " 35 to 50 525,000 to 750,000 These figures show that an irrigated apple orchard produces a high-income crop. Irrigated Orange Trees 68. The following figures are averages from data received by the mission in the Algarve region: - 143 -ANEX4 Page 22 Costs and Income per ha (300 oranxe trees) in Escudos Establishmentcosts: Land P.M. (from 500,000 to 1,500,000) Plants 15,000 Well and pump 140,000 Irrigationequipment 100,000 Deep plowing 25,000 Fertilizers 20,000 Labor 20,000 Total 520,000 Operating Costs Yield Gross Income (Esc./ha) (tons) (Esc. 15/kg) Year 1: 25,000 Year 2: 50,000 Year 3: 75,000 Year 4: 100,000 5 to 7 75,000 to 105,000 Year 5: 125,000 8 to 12 120,000 to 180,000 Year 6: 150,000 10 to 15 150,000 to 225,000 Year 7: 150,000 12 to 20 180,000 to 300,000 Folloving years: 150,000 15 to 30 225,000 to 450,000 Yield is probably reduced by 30X due to presence of virus diseases. However, the above figures show that an orange orchard in the Algarve produces a high income crop. Cost of handling and packing is Esc 4/kg and cost of transport from Algarve to Lisbon is Eec 2.5/kg. Open-Field Summer Vegetable Growing (1980) 69. The costs and income established by the RICA in 1980 for the District of Coimbra from pepper, green beans, and lettuce were as follows (per ha): Production Value (Esc.) Pepper Green Beans Lettuce Yield (kg/ha) 9.000 4,000 6,000 Price (Esc/kg) 12 15 10 Value (green) 108,000 60.000 60,000 Extra value (dry) 0 40,000 0 Total value product 108,000 100,000 60,000 Costs of Production (Esc.) Pepper Green Beans Lettuce Seed 13.000 4,000 6,000 Fertilizers 2,772 2,155 2,954 Phytosanitaryproducts 2,565 * 3,363 836 Others 5.760 5,760 3,840 Total costs 24,097 15,277 13,631 Gross profit per ha (Esc.) 83,903 84,722 46,369 Summer Potato Growing (1980) 70. The costs and income established by the RICA in 1980 for the District of Aveiro from summer potatoes were as follows (pe: ha): - 144 - ANNEX 4 Page 23 Production Value Costs of Production Gross Profit per ha (Esc.) (Esc.) (Esc.) Yield 18,000 kg/ha Seed 23,350 Price 5.63 Esc./kg Fertilizers 5,442 Total value 110,187 Phytosanitary products 6,178 Total costs 36,970 73,217 Winter Tomatoes Grown in Greenhouses in the Algarve Retion 71. The following figures are averages from data received by the mission in the Algarve region for winter tomato production in plastic houses: Costs of establishment (Esc.) Cost of Land (from 500,000 to 1,500,000/ha but not taken into account) Cost of greenhouse (cheap wood structure and plastic cover) Esc. 250/m2 Cost of drip irrigation equipment, including well and pump Esc. 501m2 Costs of production, including tomato packing Esc. 1001m2 Average yield 6 kg/m2 Average pr4ce Esc. 30/kg Gross profit per ha Esc. 800,000 72. Tomato production in greenhouses requires a high level of technology: 60 tons/ha is an average yield; 80 tons/ha is a high yield and obtained only with soil heat or chemical treatment, appropriate irrigation, fertilization, and rotation. If these techniques are not properly applied, the yield goes down quickly and yields of 30 tons/ha or less are not profitable. Cases of relatively low tomato yields are seen in Algarve plastic houses after a few years of vegetable production. X. MARKETING FACILITIES FOR HORTICULTURAL PRODUCTS Wholesale Fruit and Vegetable Markets 73. Modern wholesale markets are not yet in operation in Portugal. At least two cities (Lisbon and Porto, and perhaps Coimbra) need modern build,ngs and a government organization for wholesale markets. In Lisbon, agzeement between the city authorities on the location for the new wholesale market has not yet been reached and the traders are still doing business in the primitive structure of a very old market (4 ha). In Porto, an area of 11 ha was purchased by the city in 1977, and a 5,000 mz building was constructed at a cost of Esc. 100 million. Further construction is progressing slowly and all the buildings could be completed by 1985 if money is available. Total costs are estimated at Esc. 400 million. The 5,000 mz building has been functioning for some time, but when the wholesales dealers learned that the Ministry of Finance was fully informed of the volumes sold and that they would have to pay a tax ad valorem of 12Z to 15% according to products, they did not accept these conditions and several months ago they occupied the building. The problem had not been solved in March 1983. - 145 ANNEX 4 Page 24 Marketinx Organizations for Fruit and Vegetables 74. There are 15 fruit and/or vegetable product cooperatives and 18 agricultural cooperatives dealing with fruit and/or vegetables in five agriculture regions. These cooperatives take care of the marketing of fruit and, to a certain extent, of vegetables produced by the members. Besides, there are a certain number of fruit and/or vegetable growers associations, with no compulsory registration in the MACP, taking care mainly of the marketing of fresh products. Between 1960 and 1970, the Junta Nacional de Frutas (JNF) assisted financially in the construction of eight modern fruit packing houses, two for citrus and six for other fresh fruits. These packing houses are run by cooperatives and belong to the JNF. There are also private modern packing houses for citrus and other fresh fruit that are owned by fruit producers who grade, handle and pack their own production as well as the production ! their neighbors. Cooperatives and private persons running apple and pear packing houses always have cold storage rooms. The capacity of this storage seems to be sufficient for the present production. There is one privately owned cold storage facility for table grapes in the Alentejo. Packing houses for fresh vegetables do not yet exist, with the exception of small packing sheds for vegetable export. The JNF has a program for financing the construction of five fresh vegetable packing houses with a capacity of 20,000 tons/year. One is already under construction. 75. Only a fraction of fresh fruit is standardized before marketing through cooperatives or private packing houses and cold storage. The majority is still marketed without adequate handling and packing through traders, who often buy the fruit on the tree a few weeks before harvest, as well as through middlemen. No fresh vegetable product is standardizedand well packed, and the marketing is Cone partly by the producers themselves to the wholesale market or througL retail sales in the village and partly by traders or middlemen. Junta Nacional de Frutas 76. The Junta Nacional de Frutas (JNF - National Fruit Board) is a public institution, semi-autonomous from the MACP, created in 1936 for the production and marketing coordination in the subsector of fresh and dry fruits, fresh vegetables, and potatoes. Its main objectives are to regulate the production, to improve the quality and standardization of the products, and to promote consumption and export. 77. Part of the JNF activities has been devoted to the organization of potato marketing and to regulating the price. The JNF owns a number of potato storage rooms in centers of production (para. 89). These are underused and some have been transferred to cooperatives for fruit storage. For fresh fruit and vegetables, as mentioned in para. 74, JNF helps cooperatives financially in the construction of packing houses. Other JNF activities are control of imports and exports of fresh fruit and vegetable products through licenses and quality control of the same exports. Imports of seed potatoes were liberalized in 1982 after the failure of the national seed potato certification program (para. 59). - 146 - ANNEX 4 Page 25 78. The regular budget of the JNF for 1983 contains the following estimates: Contos 1/ Revenues 1,001,315 Expenses 1,212,799 1/ Contos = 1,000 escudos. Apart from the regular budget, a special budget is allotted as a "financing fund". The estimated 1983 budget for salaries of the JNF's personnel in the main office (Lisbon)and two regional offices (Porto and Castanheirado Ribatejo) is 176,366.6Contos for 558 pErmanentand part-timeemployees. Junta Nacional de Vinhos 79. The Junta Nacional de Vinhos (JNV - National Wine Board), like the JNF, is a public institution,semi-autonomous from the MACP, created in 1933. Its main objectivesare to help improve the productionand quality of wine, to allot quality wine names for wines from delimit i regions and control the quality of these wines, to promote wine exports, and to foster the creation or reorganizationof wine-makingcooperatives of wine grape growers. The JNV's budget for 1983 is 5,341,308Contos and its present staff comprises 1,050 full-timeand part-timeemployees. Managementand FinancialSituation of MarketinR Cooperatives 80. The financialsituation of several of the fruit producer cooperatives is not sound. For example, the CooperativaAgricola dos Fruticultoresdo Cova de Beira has a debt of Esc. 40 million because of difficultiesin reimbursing an "emergencyloan" of Esc. 27 million at 12.52 interest. This loan was obtained from the Government in 1978 to increase cold storage capacity by 2,000 m2 in order to store the very large apple productionof that year. The cooperativenever reimbursedinterest or capital. Its cold storage capacity today is 5,200 tons, which is too large for the average fruit (apple and pear) productionof 400 members who cultivatearound 2,230 ha of apple and pear orchards and 1,000 ha of peach and cherry. In-the same cooperativea controlledatmosphere storage facility of 900 m3 capacity worked properly for one season only. Thereafter,it failed to function because of inefficient insulation,and today it is used as regular cold storage. Percentage of fruit loss is high, said to be sometimes 30S on apples stored until the end of March, with a resultinglow price paid.to the members. The Cooperativados Productoresde Fruta de Guarda is not in any better financialsituation. The cold storagecapacity is higher than that of Cova de Beira and so is the debt. 81. Based on December 1981 census of the Institutodo Azeite e Produtos Oleaginosos,the total number of olive grower cooperativesis 101, owning 106 olive oil mills, with an average oil processingcapacity of 2,088 liters in a 12-hourshift. These cooperativeshave a total of 50,720 members and an average of 502 each. Some of the cooperativeoil mills have modern processing equipment. Apart from the cooperatives,there are 4,370 oil mills, most of them with home-sizeantiquated equipment and a few with industrial-type up-to-date equipment. The total olive oil mill capacity of Portugal is too high and is underuseddue to the continuousdecrease in average yield and productionover the past 20 years (para. 25). There is a need to abandon the antiquatedmills and to concentratethe processing in the modern factories. - 147- ANNEX 4 Page 26 Portuguese Export and Import of Fresh and Dra Fruits and Velgetables 82. Table 7 shows the amounts in tons of fresh and dry fruits and fresh and dry vegetables exported and imported in 1980, 1981, and 1982. Quantities exported were small for all products except chestnuts. Quantities imported were also small for all products except potatoes, especially seed potatoes, and dry beans. XI. PROCESSINGOF HORTICULTURALPRODUCTS AND STORAGE FACILITIES 83. Portugal has a large horticultural product processing industry. Tomato paste is the main processed product. In 1973 and 1982, 824,325 tons and 430,540 tons of tomato, respectively, were processing (Table 3). Table 8 shows the trend between 1962 and 1979 of the Portuguese processing fruit and vegetable industry in terms of types of products and processed quantities. It shows that tomato concentrates, although more important in the early 1970s, still represented in late 1970s about 85% of all processed vegetables and about 50% of all processed horticultural products (carob fruit products are excluded from the percentages). The other important processed horticultural products are: canned vegetables (about 8%), fruit juice (about 6%); and frozen products (about 6Z). The total annual average quantity of processed horticultural products has been around 200,000 tons in the past 10 years. Tomato Processing Industry 84. The tomato paste industry was introduced into Portugal by a multinational firm more than 25 years ago. It grew very fast and in 1967 exports of tomato concentrates from Portugal represented almost one third of the world's exports. However, despite the high quality, the exports began to decrease around 1975 and in 1980 amounted to only about 14% of world exports, as shown below: Exportsof Tomato Concentratesfrom Main ProducinsCountries 1967 1970 1973 1975 1976 1978 1979 1980 Italy 130 105 85 84 129 137 212 231 Portugal 105 130 175 45 123 73 76 84 Greece 8 34 62 68 110 83 103 130 World 332 373 512 552 536 486 572 605 Source: PMA. This downward trend in exports of tomato concentrates from Portugal is due to the mechanization of the harvest in the United States and the tight competition of the EEC producing countries, mainly Italy and Greece, which receive a subsidy from the EEC. For these reasons the United States and United Kingdom, previously the main importers of Portuguese tomato concentrates, became negligible customers, as shown by the following figures: - 148- ANNEX4 Page 27 Main Importers of Portuguese Tomato Concentrates 1962 1963 1967 1970 1973 1975 1978 1979 1980 UK 5 20 32 41 52 17 8 N.A N.A USA - - 41 22 33 2 1 N.A N.A USSR _ - - - - - 36 N.A N.A Total 11 3 105 130 175 45 73 76 84 Source: PMA. 85. The tomato industry is indirectly under the control of the Government. Before installing the crops under contract with small growers or on large areas owned by the processing company itself, the tomato processors receive short-term loans from the bank at Government-subsidizedinterest rates. Number of Processing Plants 86. In 1978, there were 77 factories processing horticultural products in the country. Table 9 shows the location, number by location, and the size of these factories according to the number of employees. Of these 77 plants, 13 were preparing tomato concentrates only; 13 tomato concentrates and other horticultural products, and the others, various horticultural products. In 1977, of the 26 factories preparing tomato paste, 20 were working at a loss, and recently several had to close down (para. 84). It is not only tomato processing plants that work below profitable capacity. The mission was informed that a number of other processing factories work at much below full-equipment capacity. In the Cachao (Tras-os-Montes)agroindustry complex, which processes cheese, wine, fruit, vegetables and other products, the olive oil mill works at 20% of capacity and the fruit and vegetables processing plant at 252 of capacity. Frozen Horticultural Products 87. The processing of frozen products in Portugal seems to be a prosperous sector of the industry processing horticultural product. From 248 tons in 1970, the quantity of frozen horticultural products has increased steadily, reaching 12,637 tons in 1979 (see Table 8). From this total, about 35S consists of peas, 201 of green beans, 181 of peppers and 141 of broad beans. The frozen product industry seems to emphasize peas too much. In areas of Portugal where peas are grown the climatic conditions are sometimes unsuitable. In 1980, 1981 and 1982, 884 tons, 352 tons and 691 tons, respectively, of fresh pea were imported for the frozen product factories (Table 7). The frozen vegetable processing plant of the Cooperativa de Fruiticultores da Lourinha (SCARC), located at Areia Branca near Lourinha, has around 850 members, of which 500 are effective growers, farming from 0.5 ha to 30 ha each (average 2.5 ha). They are specializing in vegetable growing for frozen products (pea, pepper, green bean, broad bean, cauliflower, broccoli, spinach, sliced onion, diced turnip, diced carrot), although they also produce vegetables for the fresh market. Fresh green bean, cauliflower, and tomato have been exported to Holland. - 149 - ANNEX 4 Page 28 Value of Exports of Processed Horticultural Products 88. The value of processed horticultural products in 1978 and 1979 was as follows: Value 1978 1979 (Esc. million) Fruit and Vegetables Table olives 119 179 Tomato concentrates 1,984 2,345 Peeled tomatoes 24 22 Fruit preserves 11 13 Fruit juices 15 25 Wines Ordinary wine 3,077 3,540 Fortified wine (Port) 3,722 5,786 11,910 US$ equivalent (million) 119 Source: INE In 1979 the exports of processed horticultural products represented about a third in value of the total exports of agricultural products (Esc. 11,910 million against Esc. 35,600 million). Wines and tomato concentrates are major Portuguese export commodities, and processed horticultural products make up an important part of Portuguese exports. Wine is exported mainly to countries outside of the EEC. VII. COLD STORAGE FACILITIES AS A SUPPORT IN THE PRODUCTION OF FRUIT AND VEGETABLES 89. Table 10 shows details by district of the cold storage facilities that were available for horticultural products by the end of 1982. Columns 1 to 4 of Table 10 give figures for both private owners and horticultural crop cooperatives, columns 5 to 8 show separately data of cold storage facilities existing in fruit grower cooperatives. The total number of cold storage facilities in the country for horticultural products is 771, with a total 3 volume of 832,933 m . This number does not include the 12 potato cold storage facilities, with a volume of 26,227 m3 and belonging to the Junta Nacional de Frutas. Column 3 indicates that cold storage facilities are concentrated in three districts, (namely, Leiria, Lisbon and Viseu), together making up 72.252 of the total volume. Storage volume with controlled 3 atmosphere is 59,489 m , corresponding to 7.14% of the total. Column 8 shows that the volume of cold storage facilities belonging to fruit grower cooperatives (357,164 m 3 ) makes up 42.91% of the total volume of horticultural products in cold storage. - 150- ANNEX 4 Page 29 90. Total volume of cold storage for horticultural products (832,933 m3) seems to be sufficient for the total fresh fruit production, which in 1980 was around 500,000 tons (see Table 1). However, it is doubtful that the cold storage facilities-have an adequate countrywide spread. Fruit grower cooperatives of Guarda (Estrela area) and Cova de Beira have at present excess storage capacity (para. 80), whereas the apples grown in the Estrela area by noncooperative members cannot be kept because of lack of cold storage. or because the growers do not want to be members of the Guarda cooperative owing to its poor management. 91. The grand total of cold storage facilities for the agricultural sector amounts to a volume of 1,083,167 m3, with the following breakdown: m3 Horticultural production subsector 833,324 Other agricultural products 111,842 Animal production subsector 69,246 Fisheries subsector 68,755 The cold storage facilities available for horticultural products represent 77Z of the total. XIII. HORTICULTURAL FARM PERFORMANCE IN COMPARISON WITH THAT OF OTHER COUNTRIES 91. For comparison purposes, average yield in tons/ha for the main horticultural crops in Portugal, Israel, California (USA), and Turkey are shown as follows: Average Yield Portugal /a Israel California /b Turkey /c Fruit Citrus 25 - - 27 Apples 20 - 45 19 Pears 15 - - 10 Peaches 15 - - 12 Wine grapes 7 - - - Table grapes 10 - 10 10 Muskmelons 12 - 17 - Vegetables Tomatoes: - Open field 25 16 30 39 - Plastic houses 60 - - 62 Peppers: - Open field 12 12 19 19 - Plastic houses 20 - - 29 Onions 25 16 50 Carrots 20 - 13.5 Potatoes 10 - 47 /a Average Portugal yields are based on RICA data and mission findings. /b Average California yields are from the California Agriculture Export Station, Bulletin 847, 1970. /c Staff appraisal report; Turkey - Second Fruit and Vegetable Project, World Bank Report No. 3203a-TU, 62 pages, March 1981. ANNEX4 - 151 - Page 30 92. The traditionalsmall farm (0.5 ha to 3 ha) with mixed crops (wheat, maize, dry beans, deciduousfruit, vegetables)has low yields. In this case, yields are low as sh,wn in paras. 3 and 6, and the main reasons for low performance are the use of low-quality nursery trees and vegetable seeds, as well as inappropriate fertilizer application. In farms specializing in either fruit trees or vegetables, performance is much higher, but the nursery trees used for planting are also unreliableso far as variety and health are concerned,and the vegetable seeds are sometimesnot certified and hence of poor quality. 93. Performancein citrus growingwould be better if virus-free plant materialswere used for planting. It is estimatedttkt the use of virus-free plant material would increase the averageyield from the present 25 tons/ha to 33 tons/ha. 94. In deciduous fruit tree growing (apple,pear, peach), 20 years ago, the specialized Portuguese fruit growers adopted the Italian fruit growing techniques in use in the Po Valley with the result that yields are, in this case, on the high side: 30 tons/ha for apples, 20 tons/ha for pears, and 20 tons/ha for peaches. However, since 1975, very few new orchards have been planted, and the deciduous fruit trees are becoming old. The up-to-date techniques(high density planting with at least 2,000 trees/ha, on central axis training),as developed in northern Europe, are known in Portugal at the experimentstation level and need the assistanceof an extensionservice to be applied at the farm level. Applicationsof fertilizersneed to be on a more scientificbasis. 95. Dry fruit (almond,hazelnut, chestnut, and walnut) growing has a very low performance. In the majority of cases, trees are scatteredon the farm, solid plantingsare rare, the quality of the variety is low. (exceptfor chestnuts),and sometimestkre trees have not been grafted to acceptable varieties. A high percentageof almond trees are not grafted, resulting in a number of low-qualityor bitter almonds and an uncompetitiveproduct on the world market. 96. Performanceof olive orchards is low and even lower than in Spain and Italy. About 80Z of the trees belong to the Galega variety, producing a small fruit with relativelypoor oil processingqualities. The main reason why this variety has been extensivelypropagated is its easy vegetative propagationby cuttings. Many trees are several centuriesold without rejuvenation. Fertilizationand phytosanitarytreatments are inadequate. A rehabilitation program of the olive trees has been initiatedwith government subsidies (para. 58). 97. The performanceof the vineyards for wine, always under rainfed conditions,could be considerablyincreased by pulling out old vines and those planted in unsuitable soils, (for instance,in alluvial soils better suited for other horticulturalcrops), and replantingwith certifiedvirus-free local clonal selections. The rehabilitationwould increase the yield from the present average of 40 hectolitersof wine per ha to 60 hectolitersper ha. 98. Vegetablegrowing in specializedfamily farms is probably the best performinghorticultural operation in Portugal,although too many varieties that are unsuitable for market standardizationare used and the rotationsare not adequate. An example of high performancefor the family vegetable farm is the "maceira"described in para. 31. The land of the maceiras is rented for Esc. 15/m2, which is the highest rental price for agriculturalland in Portugal. ANNEX 4 - 152 - Page 31 99. Tomato yields on small farms udder contract with processingfactories averaged 35 tons/hain 1966-1970,but only an average of 26 tons/ha in 1978-1982. Lower yields are not due to low-qualityplant material, as the highest quality seed and varietiesare suppliedby the factories,but are due to inadequaterotations that do not control disease, and to inappropriate fertilizerstrategies. 100. Dry beans are mainly grown in associationwith maize, with a resultinglow yield, reachingnot more than 200 kg/ha. Solid plantings of dry bean (Phaseolus)with certifiedseed of selected varieties could yield 2.5 tons/ha. 101. Performancein potato productionis low. The country'saverage yield is around 10 tons/ha and in the better farms 15 tons/ha. A good and easily achievable yield would be 30 tons/ha,as the best performancesin northern Europe and in the USA are more than 50 tons/ha. The main reasons for low potato yield in Portugal are the unsuccessful seed potato certification program and hence the use of unsuitable seed,.as well as the lack of appropriaterotation, allowing the build-up of nematode and other parasite populationsharmful to the potato.roots. For example, potato seed production in Tras-os-Montesis carried out repeatedly in nematode-infested soil. 102. Tomatoes grown in greenhouses in the Algarve region produce high yields of up to 80 tons/ha during the first two or three years, but thereafter the yields decrease rapidly down to 30-40 tons/ha. This decrease is due to inappropriaterotations with other greenhousefruit and vegetablecrops (melon,pepper, lettuce, cucumber),with the resultingbuild-up of soil-borne nematode populations. Decreasingyield might also be due to unsuitable fertilizerformulas used in irrigationwater. XIV. CONSTRAINTSIN THE HORTICULTURALSUBSECTOR 103. The lack of organizationfor horticulturalproduction and marketing; the insufficientnumber (or absence) of modern grading, handling and packing houses, with consequentlack of product standardization;a deficient marketing system, as well as the absence of modern wholesalemarkets in the large cities, are the major constraintson horticulturalcrop improvementin terms of area and above all, in terms of quality and standardization. There is no incentivefor the farmer to produce fruit and vegetablesof higher quality when he usually receives the same price from the merchant regardlessof the product quality he offers. The present structuresof marketing facilitiesfor horticulturalfresh products in Portugal are comparablewith those existing in the northern countriesof Western Europe before 1950. 104. There are differencesin the state of developmentof fruit and vegetablegrading, handling, and packing. Practicallyno modern vegetable packing houses exist, whereas several modern packing houses are handling a large fractionof citrus and handling and storing part of the apple and pear crop. However, a high percentageof the fresh fruit is still sold to merchantsbefore it is picked. 105. Other major horticulturalproduction constraints are: (i) lack of healthy budlings ard consequentlc.-productive fruit trees; (ii) use of too many vegetablevarieties, impeding easy standardizationof products; (iii) inefficientlinks and feedbackbetween farmers and applied research and between extensionorganizations and producersliving far away from experimentalstations; and (iv) inappropriateland use and crop rotations. ANNEX 4 - 153 - Page 32 Citrus Production 106. The three main constraintson citrus crop developmentare: (i) the present supplyof unreliableand virus-infestedvarieties by the local licensednursery men; (ii) the scarcityof irrigationwater either from deep well or from surfacein the Algarveregion; and (iii) the high interestrate for agriculturalloans for the productionof a fruit whose price will meet very tight competitionwhen Portugalenters into the EEC. DeciduousFresh Fruit Production 107. The constraintsmentioned above for citrusare also applicableto developmentof apple,pear anidpeach production,although viruses seem to do less damage to deciduoustrees. Furthermore,the apple, pear and peach crop productionis impededby an aging populationof trees which need renewal,and by the lack of farmers'information on the up-to-datecultural techniques, especiallythose relatedto higher tree density,central axis pruning,and the use of growth regulatorson pear trees (para.55). DeciduousDry Fruit Production 108. The main issuesfor almond,hazelnut, chestnut, and walnut crop developmentare: (i) the need for nursery propagationof the clonalmaterial selectedby the NationalFruit ExperimentalStation, and (ii) the need for organizationof links and feedbackto farmerson techniquesof solid plantings of grafted trees. Olive Production 109. The main constraintson olive productionare: (i) too many scattered olive trees (only 570,000ha of solid-plantingorchards in a total of 843,000 ha), the majorityof which are very old; (ii) the traditionand social culture linking the olive tree and its owner,who considersit as a valuablecapital asset althoughtending it has become unprofitablefor severaldecades; (iv) the insufficientbudget allotedfor subsidy to the olive crop rehabilitation programstarted by governmentservices (see para. 58); and (iv) the high cost of hand harvesting,which accountsfor as much as 50% of operatingcosts. Wine Grape Production 110. In the productionof wine grapes the constraintsare: (i) farms are too small, (80% of vineyardholdings are one hectareor less); (ii) a large percentageof vineyardsare more than 25 years old and show a decliningyield; (iii) clones plantedare unhealthyand do not come from selectedvarieties; (iv) part of the vineyardsare plantedin good soil suitablefor more profitablehorticultural crops; and (v) there is insufficientbudget and hence an insufficientnumber of techniciansand equipmentin applied research, causing delay in clonalselection and the developmentof a certification program of local vine clones. Developmentof in Fresh VegetableProduction 111. The major constraintson the developmentof fresh vegetable productionare: Ci) the inadequateland use in irrigationschemes; (ii) the use of too many varieties,impeding the standardizationof products;and above all (iii) the - 154- ANNEX 4 Page 33 lack of market organization from the farm level (handling, packing, and cold storage) to the wholesale market. Decreasing yield in tomatoes for processing for lack of good rotation is another issue. Early Vegetable Production in Greenhouses 112. The very high costs of investment and operation for vegetable production in plastic greenhouses and high interest rates on loans for the production of very perishable products, as well as the fluctuating prices paid to the producers, mainly because of lack of cold storage, are the major drawbacks for development. Proper soil treatment and proper rotations in the greenhouse cropping system are other issues. XV. POLICY AND RECOMMENDATIONS FOR DEVELOPMENT OF THE HORTICULTURAL SUBSECMOR Short-Term Policy Recommendations 113. land use. In order to maximize returns from irrigated land, it is necessary that the Government cease encouraging one type of agricultural development per scheme such as a cereal crop or dairy production alone. Their policy should be to encourage the production of high-return horticultural crops in irrigation schemes in a farming system that includes possibly all three (namely, horticultural crops, field crops and dairy cattle) according to suitability in each irrigation scheme. As a whole, priority should be given to high-income horticultural crops, such as early vegetables and early grape in open-field production and greenhouses, early peaches, winter apples, and pears. 114. Access to Credit. Access to agricultural credit, although recently simplified, is still complicated and is not easily understood by the ordinary farmer. Interest rates are high because of the high inflation, making access to credit for Portuguese farmers more difficult than it is in countries of the EEC where the inflation is lower (such as Spain). Fruit growers taking long-term loans now at such high interest rates will still have a higher relative debt as the present inflation rate (25Z) decreases in coming years. With highly perishable and price fluctuating commodities, as are most of the horticultural products, present credit rules can only attract farmers growing crops that have a very nigh internal rate of return. The policy of the Government should therefore be to make easy access to agricultural credit for all crops that have acceptable marketing possibilities. For perennial crops such as fruit trees, the grace period should extend to 2 years before the full-bearing stage as follows; irrigated grapevine, 4 years; apple and pear, 6 years; peach, 5 years; cherry and citrus, 7 years. 115. Taking Advantage of Opportunities After Portugal's Entry into the EEC. In view of Portugal's impending entry into the EEC, the Government policy should favor the development of horticultural crops having good prospects for export to the EEC countries. These crops are: (a) Citrus. Especially lemons, oranges, tangerines and clementines are outstandingly suitable for the climatic conditions in the Baixa Litoral of the A'garve region, which are better than in several major citrus growing areas of the EEC countries. Therefore, competitive production with lower labor costs is possible. - 155- ANNEX 4 Page 34 (b) Peaches. Productionof very early peachesin the Algarveregion appears to be possible,but a feasibilitystudy would be required. The sandy soils close to Lisbon are expectedto be suitableto produce normal season peaches profitably. (c) Nut fruit crops. There is a high demandin the EEC for hazelnutand walnuts. (d) Early table grapes. The Baixa Litoralof the Algarve region,east of Faro, has suitableclimatic conditions for producingvery early grapes in plasticgreenhouses. The earliestvarieties seem to ripen up to three weeks earlier than those in other areas of southern Europe enjoyingsimilar mild winter climates. (e) New fruit crops. Productionof new fruit crops with good prospects for marketingin the EEC shouldbe encouragedwhere the climatic conditionsare suitable. The kiwi fruit (Actinidiasinensis) finds excellentclimatic and soil conditionsin northwesternPortugal, where rainfallis high and wintersmild, and this fruit has large market potentialin the EEC. Likewise,the pistachionut tree would find suitableclimatic and soil conditionsin the dry and hot continentalclimate of Portugal (Alentejoand CasteloBranco). tf) Winter and early vegetables. Productionin winter of early vegetablesand field fruit (tomato,pepper, lettuce.cucumber, melon and strawberry)under plasticgreenhouses has developedin the past ten years in the Algarve region to approximately500 ha of plastic greenhousesfor supplyingthe local market. Climaticconditions in the Algarveare suitablefor harvestingthese crops at the same time as those in similarclimatic conditions of southernEuropean EEC countries. (g) Potted subtropicaland tropicalornamental plants. These plants can be producedin unheatedgreenhouses in the Algarveat lower cost than in northernEuropean EEC countries,where greenhouseheating is very expensiveand labor cost much higher. Productionof cut flowers (carnations,roses, chrysanthemums,gerberas) for export is not recommendedas they cannotbe producedthe year round, due to too high temperaturesin the sunmer. These crops, if grown in the Algarve in greenhouses,would meet strongcompetition from the same cut flowersproduced at relativelylow cost during the entireyear at about 2,500 m elevationin Colombia,a major world cut-flower exporter. However,flower propagationplant material (carnation cuttingsand variousbulbs) could be producedin Portugalfor export at competitiveprices. Long-TermPolicy Recommendations 116. Creatingand OrganizingModern WholesaleFruit and VegetableMarkets. Completingthe constructionof the Porto wholesalemarket and buildingthat of Lisbon in the shortesttime, as well as the organizationof these markets,are prerequisitesto bridging the gap between the presentprimitive marketing infrastructureand systemsof Portugaland those of more advancedEuropean countries. Once these marketsare establishedand organized,standardization of fruit and vegetablevarieties will come automatically,as presentgrading, - 156 ANNEX 4 Page 35 handling,and packing houses will find incentivesfor improvingthe quality because of the higher prices offered for fruit and vegetablesof higher standardsin organizedwholesale markets, and new packing houses for fruit and vegetableswill be installed. 117. Speedingup developmentof irrigationschemes in the Algarve region in areas with particularlysuitable conditions for sub-tropicalfruit, early temperatezone fruit, as well as winter and early veRetable production. The total irrigatedarea in the Algarve region is now about 21,000 ha, of which 15,000 ha are irrigatedwith undergroundwater and 6,000 ha with surface water from small dams (Silves,Odeaxere, Odemira and others). In the future, two irrigationschemes now under preparation- Beliche-Odeleite-Guadianafor irrigatingabout 6,700 ha in eastern Algarve (Sotavento),and Funcho-Odelouca for irrigatingabout 14,200 ha in western Algarve (Barlavento)-- will increasethe total possible irrigated area to 40,000 ha. Farmers growing citrus, early table grapes, and early vegetablesin eastern Algarve meet difficultiesin obtainingunderground water. The Beliche dam under constructionis due to be completedin 1985, but it will supply water mainly to the towns and only to 200 ha of irrigatedfarms. The full dam and tunnel constructionof the Beliche-Odeleite-Guadianasystem can only be justified by an immediatepossible use of water for irrigatingabout 6,700 ha. A detailed study is needed. Rowever, it may be stated that, if suitable land is available, these 6,700 ha could be used for high-returnhorticultural crops: citrus,early table grapes in open-fieldproduction and in greenhouses,and exotic fruits such as avocado and chirimoya (custardapple) to supply the national market and for export to the EEC countries. 118. Implementinga fruit tree nursery plant certificationprogram. Propagationand supply of poor varietiesand unhealthy fruit tree planting material by privatenurseries is taking a heavy toll on yield, estimated to be decreasedat least by 30X on citrus and probably 201 on fresh deciduous fruit trees. The Government'sprogram for grapevine clone certificationseems to be functioningproperly (para. 61). A similar program for apples, pears, peaches,cherries, apricots and plums which started in 1962 has been delayed for several reasons. The Governmentshould acceleratethis program by providingenough financingfor equipmentand assigningadequate personnel. 119. Developingapplied horticultureresearch. Applied research seems to be sufficientfor deciduousfruit trees, but insufficientfor citrus, grapevines,and vegetables. For citrus and grapevines,growers require more accurate informationon virus diseases and fertilization. There are too many vegetablevarieties impedingstandardization of the products. An experiment station for greenhousevegetable production was recently created in Faro, but there is no experimentstation for open-field vegetables. The policy of the Governmentshould be to increasefinancing for research and developmenton citrus, grapevines,and vegetables. 120. Improvingthe efficiencyof technicaltraining and extension services. Extensionservices have recentlybeen incorporatedin the National Instituteof AgriculturalResearch (INIA) to form INIAER with the result that a certainnumber of extensionspecialists in horticultureare assigned to Regional Directionsand SubregionalDirections of Agriculture. Their number does not seem to be commensuratewith the importanceof the horticultural subsector (49% of the cultivatedland), and it is recommendedthat the Government,while completing the present reorganizationof INIAER, take into account the need for more horticulturalcrop specialists,particularly in citrus and vegetablecrops. Furthermore,horticultural extension specialists need periodic leave to study in more technicallyadvanced countries. - 157 - ANNEX 4 Page 36 XVI. RECOMMENDATIONSFOR STUDIES NEEDED TO DEFINE HORTICULTURAL ACTION PROGRAMS 121. The following studies should be implemented: (a) Citrus and deciduous fruit nursery plant certification program. While the seed-potato certification program is underway with technicalassistance from West Germanyand a similarprogram for producingcertified grapevine clones and rootstocksis being carried out, programsaiming at producingcertified citrus and deciduous nurseryplants have been laggingfor the past 20 years. A detailed study should investigate the present situation of this program and evaluatethe possibleneed for technicalassistance. (b) Another study shouldevaluate the feasibilityof producingcertified vegetableseeds locally. These are importedeach year at a cost of about US$7.0million. (c) In severalirrigation schemes, the possibilityof using a part of the land for fruit tree crops does not seem to have been properly evaluated. A study is needed to determinewhether productionof fruit crops is possible in the particular cases of Mira (total 14,000ha) and Idanha (total8,200 ha) perimeters. (d) A feasibilitystudy for producingvery early maturingpeaches in the Algarve "campina" with a view to export. XVII. PROPOSEDTERMS OF REFERENCEOF THE RECOMMENDEDSTUDIES 122. Citrus and Deciduous Fruit Nursery Plant Certification Program. The study shoulddeal with the followingfruit tree species:citrus (orange, lemon,tangerine, clementine and grapefruit),apple, pear, peach, apricot, cherryand plum, and should include: (a) an evaluationof the certificationprogram startedat the Escaroupim NationalNursery in 1962 and identifythe technicaland/or financial reasonsfor the long delays in programimplementation. (b) a surveyof the privatenurseries and orchardsregarding the propagatedvarieties and their health situation,mainly concerning viruses. (c) on the basis of the findings of points (a) and (b), a definition of a detailedcertification program for the productionof certifiedvirus- free plantmaterial to be suppliedto licensedprivate nurseries, includingbudgets for personneland requiredequipment and supply, with possibleexternal technical assistance. The study shouldbe implementedby a team of three specialists: - a fruit tree certificationprogram specialist; - a citrus tree virologist; - a deciduousfruit tree virologist. Duration: 3 weeks in the field and 3 weeks for reporting. - 158 - ANNEX4 Page 37 123. Vegetable Seed CertificationProgram. This study should include: (a) a survey of species,quantity and quality of vegetable seed produced in Portugal, and an evaluation of the present goverrment program on the subject; (b) a survey on local climates and soils suitable for quality vegetable seed production;and (c) on the basis of the finding. from points (a) and (b) proposals for the productionof certified vegetable seed and seed quality control. These proposals should include details on land, personnel,equipment, and supply required to implementthe program, as well as budget sheets, with possible exterLal technicalassistance. The study should be implementedby a vegetable seed production specialist. Duration of study: 3 weeks in the field and 3 weeks for reporting. 124. Fruit Tree Crops in Mira and Idanha IrrigationSchemes. About 3,130 ha in thl Mira irrigationschese have deep sandy soil with between 5% and 10% loam.y This soil is probably suitable for apricot, Japanese plum, and peach growing. In Idanha, irrigation scheme a part of the area could be suitable for apple (probablyGranny Smith variety) and for pear (Guyot variety). Therefore the study should include: (a) a survey of the perimeters to determine the most suitable areas for fruit growing; (b) the establishment of a list of varieties and rootstocks suitable for the particular ecological conditions of both perimeters; (e) the determinationof the size of the orchards in connectionwith the land tenure and cropping systems used or recomended for the perimeters;and (d) the comparisonof income from fruit crops with that from other crops grown in the perimeters. The study should be implemented by a deciduous fruit crop specialist. Duration: 2 weeks in the field and 2 weeks for reporting. 125. Productionof Very Early Maturing Peaches in the Algarve Region. The study should include: (a) a survey of the climatic conditions in the Algarve, including the number of chilling days (below 79 C) per winter for at least ten years from a maximum number of meteorological stations; (b) a survey of the existing peach orchards in the Algarve and their performance according to varieties; (c) the establishment of a list of low chilling peach varieties that are suitable for the Algarve conditions; l1 In Mira perimeter, a study for rehabilitationwas made. See Perimeters deRRega de Mira. Etude de rfhabilitation,Ministero de Agricultura e das Pescas, Republica Portuguesa,GERSAR, CACG, 65001, Tarbes, France, 40 pages, 1978. - 159 - ANNEX 4 Page 38 (d) proposals for a detailed program for the production of very early maturing peaches in the Algarve, including costs of establishment and of operation as well as expected income; and (e) the possibilities for exporting early maturing peaches to the EEC countries. Duration: The study should be implemented by a peach production specialist in 6 weeks (3 in the field, and 3 for reporting). XVIII. PROJECTS IDENTIFIED DURING THE MISSION 126. The following projects showing investment opportunities were identified. (a) Project 1: Rehabilitation of the Olive Orchards, Olive Harvest Mechanization, Experimenting with Pistachio in Selected Areas. Rehabilitation would include pulling out centuries-old trees and replanting with more intensive olive orchards that can be harvested mechanically and with pistachio nut trees; pruning back unsuitable varieties and top grafting them with similarly improved clones; improving cultivation, fertilization and plytosanitary treatments; and mechanizing the harvest. Rehabilitation would be a subsidized component; mechanization of olive harvesting would be an investment component; and planting pistachio nut trees!! as a cash crop would be subsidized. As in Mediterranean countries, the olive crop in Portugal has a strong social importance and the project is likely to have a considerable impact on a large number of traditional farmers. (b) Project 2: Growing Early Table Grapes in Plastic Houses in the Algarve Region for the Local Market and for Export. This project would take advantage of the particularly mild winters of the Algarve coastal area and would bring a considerable amount of hard currency into the country. Over a short-term period, it is likely to rapidly increase the income of 500 to 1,000 small farmers. (c) Project 3; Growing Kiwi Fruit (Actinidia sinensis) in the Entre Douro e Minho Resion for the Local Market and for Export. This exotic fruit (Chinese gooseberry) finds ideal climatic and soil conditions in northwestern Portugal at low elevations. Demand for this fruit is relatively high in the EEC member countries. In a short time, the kiwi crop could be developed on more than 500 ha and could bring considerable hard currency into the country. Project 1: Rehabilitation of the olive orchards, olive harvest mechanization and pistachio growing in selected areas 1/ Pistachio nut tree is not known in Portugal; it was introduced in Andalusia (Spain) eight years ago, and it is an important crop in Iran, Turkey, Syria, and Tunisia. - 160 - ANNEX 4 Psge 39 127. Project Rationale. The olive crop of Portugal is almost exclusively rainfedi! and covers approximately 850,000 ha (50 million trees) of which 570,000 ha are in solid plantings. In terms of area, it is by far the most important crop of the country; wheat is the second one, with less than 500,000 ha. A to.al of 50,720 members belong to 101 olive producers cooperatives. Olive oil is a high quality food, especially for fresh consumption. The policy of the Government is to regulate the price at 1.5 times the price of seed oils. At this price the traditional olive orchards are no longer profitable, as they produce, on the average, from 500 kg to 1 ton per hectare. Crop management improvement could increase yields to 2 tons per ha, thus again making it a profitable crop. Old trees would be removed from marginal olive growing areas which would be planted to new, more intensive olive orchards, and to pistachio nut trees, a drought resistant crop requiring high pH and calcareous soils. Pistachio nut is a high-priced quality nut with good demand on the world market. The project would cover selected areas in a region where the olive crop is particularly important for farm income, where olive harvesting can be mechanized, and where climatic and soil conditions are suitable for pistachio growing. 128. Project Features Area and Farms: 25,000 ha of olive plantings to be selected from a total of 134,543 ha in Evora and Portalegre districts (see Table 4). The selected area would include about 5,000 olive producers belongin-gto around 10 cooperatives. The size of each farm would be from 5 ha to 20 ha (average 10 ha), of which 5 ha would be planted in olives. Orchard Rehabilitation: subsidized, according to government program just started in 1983 (para. 58). Pulling out 1,000 hectares of old olive trees from the 25,000 ha of the project. Planting New Intensive Olive Plantings: on 500 ha with subsidy from the above-mentioned government program. Planting pistachio nut trees on 500 ha of the driest and more calcareous soil from which old olive trees had been removed. These would be pilot plantings of 0.5 ha each on 1,000 farms, planted with government subsidy. Need for 200 trunk shakers: for mechanical harvesting of olive and pistachio (one for each 125 ha). Need for 200 tractors (50) for operating the shakers.2/ Tractors and shakers would be bought with credit by the 10 cooperatives. Tractors would also be used for other orchard management operations, such as soil cultivation, fertilizer application and chemical sprays. 1/ In the Caia (Elvas) irrigated perimeter, about 200 ha of olive orchards are irrigated; in the Cova de Beira irrigation scheme, about 2,000 ha of olive trees receive supplementary irrigation, and in the Tras-os-Montes project, the program includes the planting of 1,500 ha of table olive trees to be irrigated. 2/ Formerly the power needed for trunk shaking was 100, but a power accumulator recently developed by INIA (Spain) makes a 50 tractor sufficient for operating the shaker. Power is accumulated in the shaker while the tractor moves from one tree trunk to the other. - 161 - ANNEX 4 Page 40 129. Cost Estimates of Project in US dollars: USs 200 trunk shakers at US$12,000 2.400,000 200 5OHP tractors at US$12,000 2,400,000 5,000 harvesting nets at US$40 200,000 10 giant olive winnowing machines at US$40,000 400,000 100,000 pistachio trees at US$2 200,000 Total 5,600,000 _mm------ 130. Estimated Cost and Return of Olive and Pistachio Crops: Escudos/ha Old olive orchards without project (para. 66) cost of operation: 15,000 (a) Gross income at 500 kg/olive (30 Esc./kg) 15000 Net income: 00,000 (b) Gross income at 1,000 kg/olive (30 Esc./kg) 30,000 Net income: 15,000 Old olive orchard with project cost of operation 30,000 Gross income at 2,000 kg 60,000 Net income: 30,000 Cost of establishment and operation of new intensive olive and pistachio tree plantings would be about equivalent for both crops and should be calculated during project preparation. Under rainfed conditions, both would start to bear at 6 years of age and would be in full production at 15-20 years. In adult stage, olive and pistachio would yield respectively about 2 tons of olives and 1.5 tons of pistachio nut in shell per hectare, but the price of pistachio nuts is at present about seven times the price of olives. Project 2; Growing Early Table Grapes in Plastic Houses in the Algarve Region for the Local Market and for Export 131. Project Rationale. The eastern part of the Algarve region has a suitable climate for producing very early table grapes on a narrov coastal strip a few kilometers wide from Faro to Gacela. The earliest variety (Cardinal) is ripening in.unheated plastic greenhouses around the first of June. This date is the sdme, or two to three weeks earlier than the date at which grapes in plastic houses ripen in other southern European countries. Date of maturing varies each year with the temperatures of the winter. The - 162 - ANNEX 4 Page 41 present 20 ha of grapes in plastic house in Faro-Gacela strip proved that a yield of 20 to 30 tons per hectare can be achieved by six to seven years of age. If both underground water and surface water were available in sufficient amounts, it would be possible to develop over a short term, around 1,000 ha of grapevine in plastic houses. At the present average farm gate price of Esc. 60 per kg, 30,000 tons of grapes would earn around Esc. 1,800 million (US$18 uillion) in foreign currency if exported to EEC countries. In early June there are no grapes from unheated plastic bouses on the markets of the northern EEC countries. Therefore, this horticultural venture in the Algarve region has a good chance to be successful. 132. Project Features. The crop would be established on about 500 small traditional farms (from 3 to 15 ha), each farmer establishing from I ha to 3 ha of plastic houses. There would be a need for drilling a number of deep wells (100 to 150 m deep) and accelerating the construction of the BeLiche-Odeleite-Guadiana irrigation scheme. The vines would be trained on three to four wire trellises at a density of 3,000 to 7,000 plants/ha, and the main variety would be Cardinal grafted onto 420 A/nootstock. Drip irrigation would be used, and fertilizer would be applied through irrigation water. Grading, packing and marketing of the grapes would be made through farmers' associations, such as UNIHORTA in the Faro area. 133. Estimated Cost of Establishing One Hectare of Grapevine in Plastic House Escudos Land (farmers are owners of land - cost not taken into account) Well with electric pump (or water from irrigation scheme) 140,000 Plastic greenhouse with wooden structure, made of trested eucalyptus trunks in concrete base, and galvanized wire stretchers 2,850,000 Trellis wade of eucalyptus wood poles and galvanized wires (for training vines) 125,000 Drip irrigation equipment 250,000 Vine plants (6,640) 250,000 Labor and one intercrop of melon 600,000 Other costs 50,000 Tota! establishment cost 4,265,000 Income from melon crop 1,265,000 3,000,000 ==mm.., - 163 - ANNEX 4 Page 42 134. Cost of operation and income 1/ per hectare, of table grapevines in plastic greenhouses are estimated as follows: (Esc.) Cost of Operation /a Income Income /b Net Income (Tomato (Grapes) or Pepper) Year 2 600,000 700,000 420,000 ( 7 tons) 520,000 Year 3 600,000 300,000 900,000 (15 tons) 600,000 Year 4 450,000 0 1,200,000 (20 tons) 750,000 Year 5 450,000 - 1,500,000 (25 tons) 1,050,000 Year 6 450,000 - 1,800,000 (30 tons) 1,350,000 From year 7 to year 20 450,000 - 1,800,000 (30 tons) 1,350,000 /a Renewal of greenhouse plastic roof every two years included. /b This income would be obtained at a vine spacing of 2.5 x 0.6 m or 6,640 plants per ha; achievable yield at this close spacing is 40 tons per ha. 135. Total credit needed for establishing 1,000 ha of table grapevine in plastic houses: Esc. 3 million x 1,000 = Esc. 3 billion, equivalent to US$30 million. Project 3: Growing Kiwi Fruit (Actinidia sinensis) in the Entre Douro e Minho Region for the Local Market and for Export 136. Project rationale and features. New Zealand is implementing a project that will produce, within a short-term period, around 220,000 tons of kiwi fruit per year. This country exports kiwi fruit to many markets of the world and in particular to the EEC countries. Kiwi growing was started in Western Europe about ten years ago. Italy now has more than 1,500 ha in the Po Valley, France about 800 ha in the southwestern part of the country, and Spain has about 100 ha in Galicia. Portugal has a few hectares of I and 2 years of age in Entre Douro and Minho where conditions are very favorable for growing kiwi fruit: cool winters, hot summers, 2 meters of rainfall, a relatively short dry season, requiring irrigation if more than one month dry; light and deep soils with pH around 6. Kiwi is a vine and is trained on high trellises like those for grapevines and is planted at a density of 500 plants/ha. Expected yield is 10 tons/ha beginning at 6 years of age. Retail price per kg of kiwi in the EEC countries is now around US$5. Price paid to farmers will not be less than US$1.5 kg. Therefore, income of foreign currency at the adult stage from 500 ha would be around US$7.5 million. The project should benefit about 1,000 small farmers (owners of 1 ha to 5 ha) who would plant from 0.25 ha to I ha of kiwi fruit each. The grading and packing of the fruits should be done through the cooperatives. 1/ Income does not take into account interest and amortization of investment capital. - 164 - ANNEX 4 Page 43 137. Cost of Establishing and Operating 1 ha of Kiwi Fruit is estimated at Esc. 1 million and cost of operation at Esc. 500,000 per annum. Gross income from Year 6 would be Esc. I million per hectare. 138. Credit required for establishing 500 ha of kiwi vine is calculated to be Esc. 500 million or US$5 million. pRATUGAUL AGRICULTURALSECTOR SURVEY HORTICULTURALSU8SECTOR SURVEY Area J1 and Produetionof Fruit par Year in Portueal from 1976 to 1980 - 1976------1977------1978------1979…------980 Area Production Area Production Area Production Area Productton Area Production Spectes (ha) (t) (ha) (t) (ha) Ct) (ha) it) (ha) (t) 1. Fruit Trees (excl. olive a grape) 267,878 621,577 269.120 466.590 270,546 473.516 271,99S 473,365 272.194 474,087 Fresh Fruit 168,415 361.844 169.336 417,525 170,525 418,284 171,686 439,321 171,700 441,595 Plum 1.560 7.993 1.556 3.676 1.596 3.602 1.641 3.794 1.736 4,136 Cherry 2.953 21,298 2.945 11,714 2,908 10,191 2.903 12.191 2.925 11.157 Apricot 1,733 9,578 1.794 3,640 1,899 4,004 1,989 3,443 2,073 3.718 Persimon 707 2,302 794 2.648 814 2,715 849 2.830 89S 2,961 Fig 85,900 62,350 85,900 48,000 8s,900 48,770 85,900 52,000 85,900 51,000 Sour Cherry 677 2,483 663 1,366 646 1,188 631 1,414 616 1.301 Orange 17,35S 104,403 17.539 115,976 17,853 97,305 18.155 113.924 18,363 91,513 Lemon 3.072 18,758 3.250 20,821 3.399 17.490 3,525 20463 1,691 16.370 Apple 27,212 154,553 27,363 94,471 27.400 117,382 27,543 107,385 27,291 127,644 Quince 1.647 7,517 1.658 4,360 1,669 5.406 1.69S 6.916 1.718 8.223 Loquat 1,418 4,089 1.414 3,930 1,406 3,906 1,400 4,277 1,393 4,486 Pear ;,846 65,014 8,148 44,029 8.502 45,158 8,810 49.277 9,188 58.602 Peach 1,353 79,251 11,201 32,600 11,248 35,701 11,242 30,5S4 IQ,4O0 11,012 Pomegranate 442 2,435 435 2.610 431 1.792 423 2.794 416 2.822 Tangor 621 3,690 648 4,096 675 3,441 702 4,450 729 5.712 Tangarine 3,712 14,988 3,880 22,036 4,027 19,170 4,122 22,429 4.185 17,943 _ Grape Fruit 147 1,140 149 1,265 152 1,063 153 1,244 158 995 Ory Fruit (nuts) 99,463 59,733 99,784 49,352 100,021 55,232 100,312 34.044 100,494 32,492 Almond 40.331 19,146 40.518 11.577 40,640 17.829 40.816 4.000 40,852 4,240 Azelnut 860 1,057 876 1,168 Ba8 1,184 900 1,200 912 1,216 Chestnut 54.000 33,378 54.000 28.705 54.000 28,131 54,000 22,224 54.000 20,224 Waltnut 4,272 6,152 4,390 7,902 4,493 8,008 4,596 6.620 4,812 6,812 2. Table Olive n.a. 18,752 n.a. 20,766 n.a. 20,355 n.a. 20.155 n.a. 20,639 3. Olive for 011 570,000 Uj 259,136 570,000 202,800 570,000 281,410 570,000 410,000 570,000 250,000 4. Table Grape n.a. 33.250 n.a. 28,000 n.a. 41,700 5,500 55,800 n.a. 62,050 5. Wine LI 359,000 9,252,000 359,000 6.586,900 359,0006,362,000 359,000 14.078.200 359.00010,035.500 6. Field Fruit Watermelon 1,000 6,000 1,100 7.000 1.200 5,000 1.500 6,500 n.a. 5.000 Melon 3,500 26,000 3,200 25,000 3,000 1S,OOO 3,000 24,000 n.a. 16,000 Strawberry 680 3.000 680 3.500 700 4,500 750 4.500 n.a. 5.000 Areas of fruit trees, except for olive, includesolid plantingsas well as scatteredtrees. 2i/ Productionsof wine are shown in hectoliters. I/ Last olive trees census was in 1954: 843,395ha of which 169,634ha were In solid plantings. '4 4/ Figuresnot available. PORTUGAL AGRICULTURALSECTOR SURVEY HORTICULTURALSUBSECTOR SURVEY Fruit Tree.Grapevine and VeaetableSubsector Issuesand Strateayfor DevelonMent AnnualProduction of FreshVeaetables /1 in Portucalfrom 1973 to 1980 ('000 tons) Species 1973 1974 1975 1976 1977 1978 1979 1980 Cucumber 2,000 2,000 2,000 2,500 3,000 4,000 5,000 4,500 Tomato 125,000 235,620 123,880 206,800 184,200 168,440 183,000 141,500 Bell pepper 18,000 19,000 16,000 20,000 18,000 30,000 19,000 21,000 Cauliflower 18,000 20,000 22,000 25,000 25,000 26,000 22,000 19,000 Onions 93,784 61,591 71,875 68,980 62,866 69,520 60,000 66,000 Squash,Gourd 8,000 10,000 7,000 8,000 10,000 8,000 7,500 8,500 Letuce 15,000 20.000 22,000 20,000 25,000 25,000 14,000 21,000 Pea 13,500 17,500 18,000 14,000 18,000 18,000 15,000 18,500 Green beans 50,000 50,000 55,000 50,000 5s,000 60,000 50,000 54,000 Carrot 70,000 75,000 85,000 90,000 75,000 90,000 70,000 75,000 Garlic 2,000 1,500 980 1,500 1,000 2,000 2,250 1,900 Leek 150 200 150 100 150 150 180 250 Cabbaoes 590,000 570,000 580,000 450,000 560,000 575,000 560.000 490,000 Broad Beans 70,000 50,000 55,000 45,000 6S,000 68,000 60,000 52,000 Other Vegetables 93.244 62.158 73.829 68.464 87.,092 91..520 78.QQO 63.700 Total 1,168,673 1,194,569 1,132,714 1,070,344 1,189,308 1,234,630 1,145,930 1,030,850 1/ Excludingtomato for processing,dry bean and potato,tomato for processingand dry beansare in Table 3, and potatois dealt with separatelyin the text of Annex 4, paragraph35. Source: Exam Sectorialda AgriculturalPortuguesa, MACP, 1981. Actualizacao N JS -167 - ANNEX 4 Table 3 PORTUGAL AGRICULTURALSECTOR SURVEY HORTICULTURALSUBSECTOR SURVEY Fruit Tree. Grapevine and Vegetable Subsector Issues and Strategy for Development Area. Annual Production and Yield of Tomato for Processing and of Dry Bean Tomato for Processing Dry Bean Area Production Yield Area Production - Yield Year (ha) (tons) (tons/ha) (ha) (tons) (tons/ha) 1966/70 20,823 733,522 35.2 - - 1971 19,038 628,718 33.0 n.a. 66,840 n.a. 1972 22,289 833,111 37.3 n.a. 60,840 n.a. 1973 26,135 824,325 31.5 n.a. 60,480 n.a. 1974 24,244 702,349 28.9 n.a. 47,520 n.a. 1975 23,567 804,077 34.1 301,066 47,160 0.156 1976 17,072 490,296 28.7 269,956 37,560 0.139 1977 21,842 655,800 30.0 266,902 45,292 0.169 1978 21,724 619,767 28.0 281,526 50,227 0.178 1979 19,300 552,719 28.6 259,972 46,032 0.177 1980 18,051 456,638 25.3 272,678 50,004 0.183 1981 18,000 /2 394,200 21.9 /2 241,600 29,000 0.200 1982 18,400 /2 430,560 23.4 /2 258,000 33,540 0.130 N.A. Data not available 1/ Dry bean production figures shown in Table 3 are 20Z above official statistical figures to include self-consumption. 2/ Including fresh tomatoes. Source: Plano de Mudanca da Agricultura - Produto: Tomate para a industria de concentrados; relatorio final, November 1982. - 168 - ANNEX 4 Table 4 PORTUGAL AGRICULTURALSECTOR SURVEY HORTICULTURALSUBSECTOR SURVEY Olive Tree Area and Number. Quantity of Olive for Oil, and Volume of Olive Oil Processed by District Volume of Quantity fo Olive Oil Oliver for Oil Processed Total Olive Solid Orchard Number of (Average) (Average Area Area Olive Trees 1976 to 1975/76 District (1954 Census)/l (1954 Census) (1954 Census) 1980 to 1980 (ha) (ha) (Unit) (tons) (liters) Aveiro 27,082 3,622 684,315 2,019 244,100 Beja 102,398 56,551 3,820,606 46,635 8,084,800 Braga 27,302 1,752 810,055 3,141 354,500 Braganga 65,455 28,852 3,068,459 17,936 3,178,400 Castela Branco 67,037 74,698 5,152,368 27,402 4,425,800 Coimbra 39,558 38,384 3,087,786 11,924 1,544,500 Evora 73,938 42,606 4,216,842 33,307 5x085.700 Faro 50,116 3,135 1,281,561 10,379 1,687,100 Guarda 54,962 19,679 1,960,168 12,919 1,892,900 Leiria 35,158 47,376 4,120,468 7,565 1,017,500 Lisboa 27,619 8,163 1,205,244 2,536 317,500 Portalegra 58,824 71,937 5.781.659 46,892 7,700,300 Porto 22,824 4,123 654,571 1,238 160,300 Santarem 66.892 131.101 8,069,476 40,178 5,890,200 Setubal 51,518 9,532 877,818 4,850 665,700 Viana do Casteli 21,084 744 425,442 3,342 353,700 Vila Real 42,391 9,251 1,574,851 8,564 1,404,100 Viseu 50.188 18,128 2,704,308 13,472 1,986,600 Total 884,935 569,634 49,495,997 - - Average - - - 294,297 45,965,700 Source: Instituto do azeite e Produtos oleoginosos. 1/ Last accurate census on the olive crop was executed in 1954; a new census is due to start soon; however, figures of table 4 are still valid. A very few olive trees have been pulled out since 1954 and a certain number of new olive orchards have been planted, but the average age of the Portuguese olive orchards is probably close to or above one century; an olive tree can live several centuries. -169 - ANNEX4 Table 5 PORTUGAL MRUITTREE, CtAPEVIWE AND VEGETABLESUBSEC1OR ISSUES AND STRATECGFOR DEVEWPNENT Seasonal Fluctustion of Main Fresh Fruit Production: Dates of Harvest Oct. Nov. Dec. Jan. Feb. March ApriI May June JuLY Aug. Sept. I. Citrus Tangera (Tonger) ( Dalon (Was,h ington Navel (Bahia) ...... Orange ( ( Jaffa & Setubolence…_ , (Don Jolo & ., ...... - I Valencia (Setubolence Tange- rine (Wilking Clement ine Lemon !Eril My June July Aus2at Septemnber October II. Delicious Fruit Apricot _ ._ . Cherry - … Peach -, .. Pear ..... _..... Apple _ ...... Plum ______ June Julv August September October November December IIl. Tables Grepe Cardinal (red) -- . . …- Alphonse Lavalle (red) - - -. .---- Dona Maris (w%ite) - - - - !toscatel de Hamburgo (white) Dattier de Beyrouth (wni te) LEGEND: ------Early period of open-field production in Algarve. -Average period of production. -.-.-.-.-.-- Period of plastic house production in Algarve...... W-- Average Period of maximum production. Source: 1. Pri-ncipaux aspects de I 'dcononie fruiti&re et lgutmire au Portugal. by A. Fourel. CIr-L. 51p. 1978. 2. World Bank Mtission Survey. 876E - 170 - ANNEX4 Table 6 PORTUGAL FRUIT TREE, GRAPEVINEAND VEGETABLESUBSECTOR ISSUES AND STRATEGYFOR DEVELOPMENT SeasonalFluctuation of Main Fresh Fruit Production: Dates of Harvest JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEPT. OCT. NOV. DEC. Vegetables Squash & Gourd Lettuce ...... Garlic Potato Eggplant ...... Onion _---_-_ Carrot ...... -.. Calfo e ...... Cauliflower Pea ---- ...... Green bean ...... Cucumber ...... ------...... Bell pepper Tomato ------...... Field Fruits Melon Strawberry ....._._._.__._._ ...... Minimum quantity ...... Increasing quantity -. Maximum quantity Decreasing quantity 0876E PORTUGAL FRUIT TREE. GRAPEVINEAND VEGETABLESUBSECTOR ISSUES AND SIRATEGY fOR DEVELOPMENT Portugueseexport and ;mport of fresh fruit, fresh vegetables,dry fruit and dry vegetables Products Exports (tons) Imports (tons) 1980 1981 1982 1980 1981 1982 Freshfruit Citrus 1,136 139 65 - 856 - Apple 2,051 550 969 - - 6,978 Meton 994 k619 1,096 - - - Strawberry 60 91 65 - - Pear 1,095 920 730 - - , _ Banana _ _ _ 3,892 4,028 998 Fresh vegetables Onion 1,90? 296 502 - 5,327 10,802 - Potato 14,643 3,682 3,498 41,884 - 45,182 Gartic _ - - - 100 244 Dry fruit Chestnut 6,801 3,227 4,455 - - _ Almond (in shetl) 406 553 536 - - _ Almond (shelLed) 444 701 1,169 - - _ Pine nut (shelled) 259 429 355 - - _ Walinut (in shell) - - _ - 202 116 Dry vepetables Broad bean 665 732 1,230 _ - Dry bean 1,387 342 46 7,983 10,151 11,507D 4 Chick pea 597 212 48 215 1,358 3,716 a z Pea - 8_4 352 691 Seed potato 29,363 17,086 53,334 Source: Junta Nacionalde Frutas. EBLr FRUIT TREE. GRAPEVINE AND VEGETABLE SU8SECTOR ISSUEF AND STRATEGYFOR DEVELOPMENT Tvyos and 0uantittas of ProeQssad Fruits and Vmaatablpi Value (Ese Procgsspd Products 1965 1969 1970 1972 1973 1974 1975 1976 1977 1977 1979 HI_lloni 1979 Table olive 5,782 5.815 9.175 9.548 8,727 8,282 8.51S 6.256 6,278 16.400 6.657 6,225 271.2 Compote (stewed fruit) 37 36 5S 46 129 52 17 20 297 19 361 577 39.8 Fruit Concentrate 125 40 482 199 338 331 113 224 314 1,090 6E0 966 80.6 Tomato concentrates 27,086 73,813 126,207 104.057 146,221 140,825 128,092 128,065 88,068 103,830 101.970 86,098 2,658.5 Candied fruit 95 322 488 914 879 1,150 991 1,009 1,058 1.604 1.321 965 66.9 Canned frutt 176 618 959 609 853 778 1,124 847 2,401 1,292 1,615 1.141 70.9 Canned vegetables 578 6,343 9.434 13,718 10,996 11.060 15.878 14.436 16.052 18.103 18,754 13.581 413.3 Vegetables in vinegar 253 270 418 584 566 610 675 479 449 683 634 396 17.9 Kirmelade 1.723 2.025 2.151 2,642 2,623 2,525 3,501 3.441 3,319 4,208 3,737 4,107 185.8 F1g paste 1,787 2,802 1,533 1.547 1,126 5385 2,990 2,385 2,023 348 1.317 2,198 115.8 Pepper 617 705 587 513 375 118 131 297 677 831 622 763 62.4 Fruit past or fruit pulp 1,384 1,763 2,190 3,3S4 3,625 10,935 3,616 3,505 11,751 4,447 5,774 7,542 171.1 Dehydrated products 2,375 2,683 3,466 2,148 4,188 4,051 2,699 1,837 1,941 3,230 1,995 3.366 365.5 Fruit juice 137 1,310 1,995 2,910 4.435 4.414 7,049 6,490 7,845 9.194 11,283 12,637 418.5 Syrup - - - - - 1,223 637 1,546 1,393 1,842 1,512 2.374 169.4 Frozen products - - 248 230 386 290 277 1,405 1,932 2,957 11,976 12.183 401.4 Carob fruit products - - - - - 42.688 30,441 28,203 36,492 24,875 24.743 35,473 517.0 Precooked vegetables ------831 1,746 1,514 - (a)30.7 Concentrated soup - - - 1,528 1,117 1,743 2.538 1,986 2,665 2,773 4.054 - (a1467.1 42,115 98,545 159,348 144,567 186,584 231,599 209,284 202,446 183,854 199,472 201,039 (190,789) 6,532.8 ^ (a) 1978. 9I PORTllGAL AGRICULTURAL SECTOR SURVEY FRUITTREE. GRAPEVINE AND VEGETABLESUBSECTOR ISSUES ANO STRATEGY FOR DEVELOPMENT Location.Number and Sizeof the HorticulturalProducts Processin. Factories (1978) Numberof- Sizeof Factoryaccording to Numberof Employees------Locationof Factories Factories I to 9 10 to 19 20 to 49 50 to 99 100 to 199 200 to 499 500 to 999 Aveiro I ------BeJa 2 1 - I - - Braganga 4 1 - - 2 1 - - Castelo Branco 3 ------Colmbra 1 ------Evora 3 1 - - - 2 - - Faro 5 - 3 1 - 1 - - Leirla 6 1 1 - 1 2 1 - Lisboa 15 6 3 1 2 1 2 - Portalegre 9 4 - 3 I - - Porto 4 2 - I I - - - Santarem 15 1 2 5 1 4 1 1 Setubal 7 - 2 2 - 2 - 1 Azores 1 - - - - Madeira 1 - _ _ _ _ _ w TotalContinent & Islands 77 21 it 15 9 1S 4 2 Source:Estatisticas Industrias. I-I '0* PORTUGAL AGRICULTURALSECTOR SURVEY FRUIT TREE. GRAPEVINEAND VEGETABLESUBSECTOR ISSUES AND STRAT[GY FOR OEVELOPHENT ColdStoriac Facilities for HortiCultural Product$ ti92l1 Total Total Volumeof S of Total Volumeof Number Cold Volume Controlled Cold Stores in FruitGrowers Coomeratives of Stores of Cold Atmosphere Nunberof Volume S of District's X of Total Stores (m3) Stores (m3) Cold Stores (n3) Volume Volume Aveiro 3 1,520 0.18 - Beja 1 9,072 1.09 - - - - _ Braga 8 35,291 4.24 9,810 2 31,442 89.0 3.78 Braganga S 2,982 0.36 - 1 1,686 56.5 0.20 CastelaBranco 10 50,189 6.03 2,380 - _ Coimbra 13 S5.06 0.66 - Evora 1 185 0.02 - - - - Faro 1 120 0.01 - - - - - Guarda 4 47,231 5.67 2,850 3 46,651 98.70 5.60 Leiria S16 327,121 39.30 6,390 S 89,432 27.34 10.74 Lisboa 62 157,643 18.94 15,339 5 72,511 46.00 8.71 Portalegre 1 108 0.01 - - - - Porto 12 10,392 1.32 - - - - - Santarem 46 48,392 S.81 3,444 2 12,093 24.99 1.45 Setubal 7 4,072 0.42 - 1 2,180 53.54 0.26 Vianado Castelo 2 1.388 0.17 - - - - - Vila Real 8 14,506 1.74 3.338 2 13,236 91.25 1.59 Viseu _11 110.6S1 14.01 15.938-A 87L913 75.)a 10.5 Total 771 832,933 100.00 S9,489 25 357.164 42.91 Source: Or. LeonorDurate, Instituto Nacional do Frio. c - 175 - PORTUGAL AGRICULTURALSECTOR SURVEY A NEAR-TERNACTION PROGRAMFOR AGRICULTURE ANNEX 5: AGRICULTURALRESEARCH AND TECHNOLOGICALOPPORTUNITIES Table of Contents Page No. 1. INTRODUCTION ...... * ...... 1 II. INIA - INIAER ...... I III. RESEARCHOUTSIDE OF INIAER ...... 4 IV. TECHNOLOGICAL OPPORTUNITIES ...... 4 Field Crop Production ...... 5 Fodderand Forage Crops ...... 6 AnimalProduction ...... 6 VegetableProduction ...... 7 FruitTree Productiou ... 77...... VineProduction ...... *... ..*****... 8 V. ISSUES IN RESEARCH ...... 9 VI. PROPOSALS FOR STRENGTHENING RESEARCH ...... 9 Priorities...... 9 NationalResearch Plans ...... 10 VII. APPENDICES ...... , ,12 ,,, Appendix 1 - AgriculturalResearch Project ...... 12 Appendix 2 - Subcomponents of a Seed Production Program ...... 20 - 176 - ANNEX 5 Paxe 1 1419t/old PORTUGAL AGRICULTURALSECTOR SURVEY AGRICULTURALRESEARCH AND TECHNOLOGICALOPPORTUNITIES I. INTRODUCTION 1. Agriculturalresearch in Portugal is maioly the responsibilityof INIAER, which was formed in July 1982 through the amalgamation of INIA and DGER. The NationalInstitute for AgriculturalResearch (lNIA)is equivalent to a directoratein the Ministryof Agriculture,Forestry and Food (MAFF)I. and a very recent re-arrangementof responsibilitiestook rural extensionout of anotherdirectorate (General Directorate of Rural Extension- DCER) in NAFF and added it to the researchinstitute to broaden its mandate and to create INIAER. At the same time a number of service laboratorieswere transferredto INIAERas well. The new structureappears as ChartAl. INIA (INIAER)has been the main agriculturalresearch agency and will be discussedin detail. Traditionally,some researchhas beea conductedat universitieswhich have shown an increasinginterest in recent years. II. INIA - INIAER 2. INIA was created by a law of October 1974 to be the institutionto execute,coordinate and control researchactivities and the developmentof technologyas well as relatedscientific and technicalactivities, which could be designatedas researchand developmentin the *griculturalsector. It was, and remains,a sectionof the ARriculturalProduction Secretariat io the MAFF (then the Ministry of ARricultureand Fisheries,MAP). INA was given the followingresponsibilities: (a) to propose to the Ministerof NAFF appropriatemeasures to promote, coordinateand execute researchand developmentin the agric.ltural sectorat the sectoraland national level; (b) to carry out some action plans itselfand ensure that all such actionsplans for researchand developmentthat are approvedby the Ministerof MAFF are carriedout; (c) to promote the scientificupgrading of researchstaff; (d) to developand maintainan up-to-dateinventory of scientificand technicalpotential of researchand developmentactivities for the MAFF; /1 Althougbthe Ministryhas only recentlybeen renamedthe Ministry of Agriculture,Forestry and Food (MAFF)and was formerlythe Ministryof Agriculture,Commerce and Fisheries(MACP), it is referredto in this Annex as MAFF. - 177 - ANNEX 5 Pate 2 (e) to maintain adequate information and documentation of scientific and technological research related to agriculture carried out by public and private, national and international institutions; (f) to develop links with other services of the MAFF that are concerned with scientific and technical activities; (g) to assure that its activities are linked to services of the MAFF that are concerned with extension; (h) to develop links and interchange with universities,and other teaching institutions; the National Board for Scientific Research and Technology (JNICT); research and development activities of other ministries, the private sector, other national and international agencies; (i) to undertake agreements and contracts and to supervise other authorities; public, private, national and international,to carry out studies or research for INIA; (j) to facilitate interchange of staff between services particularlv research and teaching; and (k) to promote and coordinate the dissemination of results of INIAs research and development activities using all possalle means. 3. INIA is composed of: (a) central organs, namely the scientific and administrative councils; (b) supporting bodies, namely, offices of planning, advinistration, scientific and technical information; (c) division of statistics and computation, and a training center; operational services, namely, agronomy, animal production, forestry, plant improvement,viticulture, agricultural products, fruit culture, soil survey and land use, irrigation, economic and sociological studies, vegetable and flower culture; and (d) six local services called Regional Centers for Agricultural Research and Development (CRIDAs) one in each of the agricult-uralregions, except Ribatejo e Oeste, vith the responsibility for adaptive and on-farm phases of research. 4. INfl has described the organization of its scientific activities clearly and in terms which should permit good research management. Research and development activities are organized into programs sud projects designed to address priority issues of the MAFF's agricultural research policy which is directed towards important problems of the sector for the country's development seen in an economic and social context. Work is organized through programs to study ecological resources, utilization of production factors, production itself, and the transformationof products always taking into account social and economic aspects. Programs comprise interdisciplinarysets of projects linked by their of complementarity and conmon purpose. Projects within a program are coordinated by a coordinator who is also responsible for financial management. A permanent program committee composed of leaders of projects, and those in charge of any services involved, advise the coordinator. Projects which are selected according to a specific methodologv are costed and given priority have a limited field of investigation,a specified purpose and a realistic time frame. Projects may include several studies carried out by a team guided by the project leader and supported by specialized services and supporting bodies (pera. 3). The functious and responsibilityare clearly stated. A program coordinating com ittee of the scientific council ensures overall balance of projects and programs. - 178 - ANNEX 5 Page 3 Staff and Budget 5. Staff numbers and distribution among functions for 1980, 1982, and 19°3 are as follows: 1980 1982 1983 /a Total 1,444 1,945 1,548 Scientific 234 395 309 Scientific technical assistants 434 569 492 Ratio Scientific tech. assist. to scientific 1.9:1 1.4:1 1.6:1 /a Does not include staff for the national forestry station which totalled 146 in 1980 and 157 in 1982. The ratio of technical assistants for researchers to the number of researchers is declining as the number of assistants has not increased to the same extent as the number of scientists. 6. The Budget for INI-Ais in four categories: (a) salary budget for permanent staff administered directly by the secretary general of the MAFF; b) ordinary budget for general running costs and capital expenditure for the son-program activities; (c) extraordinary special budget for general running costs and capital expenditure for the research and development projects; (d) "petty cash" budget for expendable and non-expendable items for production in research station activities. In the (b), (c) and (d) categories the percentage used for capital in recent years appears to have been in the order of 35-40%. Totals and individual amounts are not available except for category (c) which funds the research programs, and the percentage this represented of the total. For the period 1978-83 they are as follows in '000s Escudos. Category 1978 1979 1980 1981 1982 1983 (c) Extraordinary special budget 170,050 200,730 150,000 118,000 133,600 190,650 Percentage of total 31 27 19 10.5 11 Total budget by deduction 548,600 743,400 789,500 1,123,800 1,214,500 1,650,000 Expenditure per scientist 3,370 3,075 5,340 Scientists are now well paid relative to other technical staff in the MAFF since an upgrading of salaries three years ago. - 179 - ANNEX 5 Page 4 7. The animal productionstation, the plant improvementstation, the viticulturalstation, the departmentsof irrigation,fruit culture, vegetable and flover culture are locatedaway from Lisbon in country areas, as are the regionalcenters (para. 3). In addition there are eight experimentalfarms, four in the Alentejo, three of which are for irrigation,and one each in Ribetejo,Beira Interior, Beira Littoral and Entre Duoro e Minho regions. INIA then has a nucleus of country locations (para. 23). 8. Extensive philosophicalchanges have occurred in a relativelyshort period. The law creating INIA was promulgatedlate in 1974. The institutionat organizationcame into being in 1975 with two main objectives,namely, to concentratethe means, and to improve planning of activities. The first year of planned programs was 1976. A further organic law in 1979 gave INIA additionallegal support. In July 1982 the Governmentestablished the lav 293/82 which added Commerce to the Ministry of Agricultureand Fisheriesand at the same time brought about the additions to INIA to make it INIAER (para. 1). Although the law has been passed, the regulationsnecessary for the transfer of the administrationof extensionhave not been approved. However, the transfer of three service laboratories,namely, agriculturalchemicals, plant health and phytopharmocology,has occurred. Associatedwith the extensiondirectorate as it is expected to appear in INIAER is a service for professionaltraining with trainingcenters at Conto, Gil Vaz and Pegoes. The staff budget involved in the new directoratesand services are not shown in-the tables in para. 6 as that informationcovers years prior to the implementationof law 293/82. III. RESEARCHOUTSIDE OF INIAER 9. Limited research is undertaken at universities in association with teaching. Lisbon has been the most important,but research in increasing amounts in being carried ouu at the universitiesof Tras-os-Montesand Alto Douro at Vila Real, /1 and Evora. Universitvresearch is coordinatedfor the Ministry of Higher Education by a coordinatingbody the National Institutefor ScientificResearch (INIC). Some research is carried out on experimentalfarms controlledby regional directorates. The national center for fruit growing improvementand studies, animal nutrition laboratory,and the national veterinary institute (the latter two recently incorporatedinto the General Directionof Livestock)are part of the MAFF and have limited research responsibilities.The national board for scientificresearch and technology (JNICT) that reports to the Prime Minister is responsiblefor higher level coordinationof all research for all ministries. IV. TECHNOLOGICALOPPORTUNITIES 10. Independentof the size of the farm, providing that it exceeds a thresholdlevel of resource endowment,farmers who have assured tenure will accept changes that lead to increasedproduction if four prerequisitesare met. (a) an improved farming system:whereby a combinationof materialsand practices that is clearly more productiveand profitablewith an acceptably level of risk, than the one currentlyused, becomes available to the farmer; J1 The World Bank 2:oan,2175-PO, is assisting farm level research for the Tras-os-Montesregiou and a large portion of this research is being carried out by the Instituteof the Universityof Tras-os-Montesand Alto Douro (IUTAD). - 180 - ANNEX 5 Page 5 (b) instruction of farmers: whereby the farmer is shown on his own farm or nearby how to put the practices into use and made to understand why they are better; (c) availability of inputs: whereby the required inputs, and if necessarv the credit to finance their purchase are available for the farmer when and where he needs them and at a reasonable cost; (d) availability of markets: whereby the farmer has access to a nearby market that can absorb the increasing supply of produce without excessive price drops. Each of these is as important as the other, but the discussion focuses now on the first, since although improved technology alone does not assure that change will occur, without it there is no possibility. Furthermore, the extent to which an extension system might be improved and the level of investment that can be made in it, should be a function of the scope for improvement and the availability of appropriate technology. 11. References are made in annexes 2, 3 and 4, to each of the wide range of agricultural products and in all cases the yield per unit of area or animal is less than it could be, notwithstanding the mediocre soils, variable rainfall patterns etc. Opportunities invariable exist to raise yields by applying improved production techniques. Application of better breeds or varieties, improvements in feeding or fertilizing, animal prophylaxis or plant protection are expected to improve outputs. The mean yields of any of these products is very much less than the potential that is constrained by soil, light, temperature and water, considerably less than the best producers are now producing and somewhat less than the averages in comparable countries. The opportunities are discussed in detail in annexes 2, 3 and 4 and are summarized in the following paragraphs. This discussion takes no account of the economic aud social environment that will encourage or discourage farmers to adopt, or from adopting, innovations that lead to increased production. Field Crop Production 12. Annex 2 discusses the important field crops and indicates the level of production increases that could be expected from improvements in technology if there are sufficient incentives for farmers to apply them. In respect of wheat, the Annex considered that for specified areas of rainfed soil classes A to D and for a small amount of irrigated wheat, that overall average yield could be raised from 1.2 tons per ha to 2.3 tons. This gaz increase would require widespread and careful application of several straightforward techniques for seedbed preparation, better varieties and seed, and a logical fertilizer strategy but mostly these still need to be developed at the farm level. Research, development and planning should treat the Alentejo region as a rainfed area of significance and adspt recognized rainfed (dry farming) techniques to it in order to make better use of the available and variable moisture as is done in other parts of the world. Replacement of rye by triticale in a large part of the north east quarter of Portugal and more consistent application of the same elements as are mentioned for wheat could produce grain yields three times as great as are now obtained. Barley and oat yields could be doubled or tripled by following the same lines. - 181 - ANNEX 5 Page 6 13. Opportunities for research and development to contribute to greater yields of maize are discussed in Annex 2 para. 14. Most of the improvements that need to be made to individual components of the production system are known and concern variety, seed quality, planting depth and density, and fertilizer combinations. Although it has not all been done, research of these components is now straightforward to the point of having limited effect unless it is pursued to the level of their interaction in the farm situation. The area of urgency is to examine maize cultivation in the context of other crops in the production system at present which give no flexibility in the crop calendar or compete with it for nutrients and water. Similar research is necessary for the other important summer crop, sunflower, where yields are low and constrained by the production system that has been imposed. The grain legumes are now grown with relatively primitive technology and the opportunity exists to improve their performance to produce at least double present yields. However, consistent with the discussion in paragraph 26, it is doubtful whether the size of this group of crops warrants major investment except for at the level of limited research capability. Fodder and Forage Crops 14. Adequate combinations of fodder crops exist and sound recommendations are being promoted in some regions. It is doubtful whether serious research effort in this area could be justified with the large number of other themes of higher priority. Farming systems development would necessarily incorporate these crops in rotation experiments, and studies of methods of utilization, particularly fodder conservation are likely, to have a substantial impact on livetock production. 15. The most urgent area of work concerns the use of self-regenerating annual forage legumes. There is an immediate potential for a million hectares of pastures based on annual forage legume which would, if properly applied, allow the sheep population of the Alentejo region to be tripled and would almost completely remove the need for nitrogen fertilization of these soils. The usefulness of subterranean clover as the basis of short wheat - clover rotations or as the basis of more permanent pastures has been demonstrated. For its proper application, major issues of variety and location interaction, management and utilization need to be solved in field situations. Animal Production 16. The largest scope for improving animal performance lies in the area of nutrition of ruminants, particularly in rainfed situations, by careful planning of feed needs throughout the year from on-farm resources. Improved yield per animal, the occasional opportunity to upgrade from meat to milk production, and increased carrying capacity can all be expected. Research is required to coordinate the feed production opportunities with the nutritional needs of the classes of animals and to conserve the surplus spring production to feed back in the period of shortage from late summer to early winter. Portugal's rangelaud, and its special grazing situation of permanent pasture among oak trees, although on relatively poor soils, iS expected to yield double the food units per hectare than it now does by improving management of the range and of the animals. - 182 - ANNEX5 Page 7 17. Annex 3 does not give high priority to genetic improvementexcept for the case of hybrid pigs that are able to make better use of farm by-products. It does, however, propose scope for animal improvementby improvedfemale fertilityand control of reproduction. VleetableProduction 18. Within horticulture,vegetable production generally shows the best performance,more throughthe intensityof effort on small specializedfarms than the sophisticateduse of improvedtechnologies. (Annex4 para. 6 shows the range of yields.) The scope for improveuentis greatest in vegetable cultureon small, mixed farms where better seed quality and varietyand appropriatefertilizer strategy would at least double yields. In specialized productionunits inappropriatecrop rotationsand inadequatefertilizer use are causingyields to decline. This is evident in the productionof tomatoes for processingwhere the decline in yield over a ten year period is 25Z while the contractorscontinue to supply high quality seed. Poor crop rotation would be the main reason, along with lack of precisionin fertilizeruse. Plastichouse tomato culturevould respond to the same elements. Dry beans are a major vegetablecrop and a major import yet their productionremains primitive and mixed with maize. Rearrangement of the cultural program would increase yield at least 10 times. The hypotheses for developing these changes appear to clear, but field level testing of them is required. 19. Performance in potato productionis low,with average vields around 10 tons per ha when 30 tons per ha should be easily attained. Unsuitable seed, inappropriaterotations aud poor disease control are the major constraints. The reduced but substantialarea of 100,000ha proposed in the PMA, at this high yield level, certainly justifiesa significantresearch effort. Fruit Tree Production 20. Deciduous fruit tree production,which is almost always irrigatedor in areas of rainfall greater than 700 am, was high yielding 20 years ago when growers copied methods developedand employedelsewhere in Europe. Techniques have not been improved subsequentlyand orchards have aged beyond the optimum stage. Yields can at least be doubled with up-to-datecultural techniques, high densityplantings, central axis pruning,better plant outritionand use of growth regulatorsfollowing appropriate farm level research. For dry fruit and olives which are mainly rainfed,at least a doubling of yield is feasible with the same types of actions when trees are in solid plantings. The technologyfor improvingolive productionis known, whereas more researchat the farm level is required for dry fruit. Citrus yields are constrainedby low quality rootstocksmore than by anything else. This results in continual virus infectionwhich is estimatedto be-epressing yields on averaxe by 25%. Vine Production 21. Uine grapes are produced on very small farms frequentlyon poor soils but generallythe farmersmanage their vines very well in terms of cultural treatments. The major constraintto yield is in the age of the vines and the lov qualityof the original plant material (varietyand susceptibilityto virus). The scope for yield improvementis estimatedto be 50x. Rootstock and clonal improvementis proceedingand materials should be availablefor dissesinationshortly. - 183 - ANNEX5 Page 8 V. ISSUES IN RESEARCH 22. The conclusionsthat are drawn in annexes2, 3 and 4 and summarized in paragraphs12 to 21 are that there is an overall lack of technology appropriateto the productionsituations in Portugal. Even when a crop production system appears to incorporate isprovements in all or some of its componentsthey are rarely appropriateor used efficiently. Hence, emphasis is given to issues in researchand then, recommendationsfor urgent reorientationof research. Research - Isolation sad Orientation 23. The key issues in researchare its isolationfrom the farm and its inappropriateorientation. By orientationis meant the choiceof research themes relative to the national high prioritv needs. By isolation is meant the involvementof farmersfor whom the researchis intended,in the research process. An importantdecision is requiredto ensure that the object of researchexpenditure is to develop the best possibleproduction recomuendationsfor farmers. This would require that emphasisin researchbe directed to derivingeconomically optimum recommendationsfor individual componentsof the productionsystems (fieldstation research); and, the integrationof these optimumrecoruendations for individualcomponents into crop productionsystems and that into the farmingsystem (on-farmresearch). This requiresparticipation of farmersat the definitionstage and at the stage of translatingthe results into recommendations.This farmingsvstems approachto researchis essentialto formulateproduction recommendations that are valid, acceptableto farmersand can be readilyupdated to reflect chantes in the economicand technicalenvironments. This becomesan upstreamapproach to researchplanning and management. Researchstaff should be locatedin the region where 75-852 of the researcheffort is to be focused,at field stations. Ideallythese stationswould be the point at which researchand extension comes together. Adopting this approach of having the major focus on research at the farm level precludes, neither researchthat is often necessary to providea basis for the developmentof nationalobjectives, nor some forms that backstopthe farm level programs. At present in Portugalresearch is isolatedand not orientedin this manner even when it is conductedat the stationslocated outside of Lisbon, paragraph7. Research - Under-Emphasis 24. Although expendituresor researchare relativelyhigh at around 0.6Z of agriculturalGDP (period1978-81) compared with 0.3 - 0.42 for middle incomeand 0.9 - 1.12 for hiF;hincome countries of Asia, North Africa and the Middle East, sib SaharianAfrica aud Latin America,and even though the number of staffedscientist positions is reasonable,the importanceof research appears to be under emphasized relative to other constraints. This probably has to do with the limitedimpact it has had on production,its lack of visibilityand its long term nature. The generalconcensus is that the plannersare unaware of the effectsthat lack of technologyis having on Portugueseagriculture, the urgent need to rearrangeproduction system to meet price and subsidychanges that entry into the EEC would cause and the returns that can be obtained from investmentin well managedagricultural research. - 184 - ANNEX5 Page 9 Research - Staff 25. Although staff numbers seem to be reasonable and show increases, there has been no recent recruitment and among the stations visited there seemed to be a large variation in quality and number. The staff at the department of fruit growing at Alcobacawas growing and had a good mix of young and more experienced scientists displaving enthusiasm, whereas the plant improvement station at Elvas, formerly vell known for its research, had many recognized areas without scientific staff and no young scientists. There is no apparent staff recruiting, training,and allocation policy. The ratio of support staff to scientists is less than it should be at 1.7:1 (para. 6), whereas it should be 2.5 or 3:1 in order to yield greater scientific output per scientist. Research - Size of Some Subsectors 26. Research planning should consider three general types of program, namely, (a) region production system programs which are referred to in the farmingsystems approach to research; (b) discipline programs such as soil conservation, land use, water managerient; and (c) commodity programs. Comodity programs planning is affected by the importance of the commodity nationally, and this general problem of how to cope vith the research needs for comodities produced in small amounts is particularly well illustrated in Portugal. Even after some grouping there are aro4nd 35 comoditY groups. To justify a complete research system a comodity needs a minimum size. This is frequently equated to approximately 100,000 ha in reasonable rainfed conditions. Area alone is a loose criterion, since whether or not the crop or partial production system benefits from irrigation, the value of the product, and the expansion trend should all affect the decision. For that reason estimated farmgate value in round figures and a projection of expansion are included in Table 1. From this table it is clear that about ten commoditY groups cannot on first appraisal warrant complete research systems. Yet thev are important in a restricted way and deserve to have improved technology generated for their producers. Research institute planning needs to develop the limitedresearch capability concept in order to bring in and test appropriate technology developed in the international system or from comparable countries that can support programs. VI. PROPOSALS FOR STRENGTHENINGRESEARCH 27. Taking into account the present situation in research described above, the issues that have been discussed and in view of the technical opportunities that exist a number of proposals are presented. Priorities 28. High priority should go to turaing the research institution into an effective instrument commensurate with its pivotal position in developing farm level technology. It is essential for the rehabilitation of the research to be initiated because:- (a) technology as it is defined in para. 10 (a) is lacking; (b) establishing a flow of research results aimed at giving groups of farmers the best possible technical - economic production recommendations in a farming systems context requires time, and remains a conti.tous process; - 185 - ANNEX 5 PaRe 10 (c) a solid research infrastructurealready exists; (d) no major policy - institutionalchanges are necessary. The justificationfor giving priorityto rehabilitationof research service is partly implicit in points (a) and (b), nasely, the fragility of present situationregarding appropriate technology. Effectiveextension requires linkagesto a reseachservices that can respnd to farmers'needs and these take time to establish. National ResecrchPlans 29. The startingpremise should be that INIAER has been constitutedin a suitableway (paras.2 - 4), that its infrastructureis adequate as a foundation,that a core of steff exist, and that although the budget is in the right order that a real growth of about 6X per year especiallyfor capital and operatingexpense is would be required to facilitateits effectiveness. The major changes that are needed are:- (a) Philosophical (i) to incorporatethe notion of farmingsvstems approach to researchwhich implies: a. massive relocationof the focus to be close to farmers; b. selectionof research themes in close cooperationwith farmersand having in mind their priorityneeds; C. close associationwith the social scientistsat all stages; d. developmentof the iterativeprocess with farmers. (ii) research at all levelsmust be carried out by research scientistseach trained in and for a particulardiscipline which implieshaving scientistsactuallv carryingout research throughto the final stages in farmers fields and not handing down experimentplans to be carried out by assistantsor extensionpeople. (iii) as a consequenceof variation in size of commoditieswhich even when small are important,develop a limitedresearch capabilityfor selectedcommodities (para. 26). This will involvevell trainedscientists who maintain close contact with appropriateprograms outside Portugal and translate hypothesesdirectly to the final stage of experimentationin the farmer's field. (b) Managerial (i) development of a network of field stations. This is unlikely to requiremassive capital outlaysas a good number of stationsand farms already exist, variouslyowned by INIAER, 1AFF and the universities. What is required,is to select from within these on the basis of location,and start an active programof researchstation development. This field station facilitiesshould also providemajor points of contact for researchand extension; - 186 - ANNEX 5 Page 11 (ii) the central level planningunit of INLAERshould be assisted to developgreater capacitYfor staff recruitment,training and deployment; (iii) a functionalunit shouldbe developedat the central level to manage cooperationwith programsin other countriesand the internationalagricultural research centers, and promoteand coordinatecooperation with Portugueseuniversities and the privatesector; and (iv) developa financialmanagement system which allows for the peculiaritiesof researchmanagement. 30. In order to facilitatethis, it would be necessaryto organizean externalreview of agriculturalresearch in Portugaland principallyof the operationof INIAERwhich would led to a uaster plan and the preparationof a defined investmentprogram designed to start the introductionof recosmended change. So that not only would this producea descriptionof all phases of agriculturalresearch and an evaluationof them, but it should also proposethe strategyand steps for improvementand negotiateat a high level in the Ministry of Agricultureany sort of policy and institutionchanges deemed to be necessary. IdeallyISNAR /1 should be invitedto manage this study. Approximately 6 1/2 man-months would be required (4 - 4 1/2 in the field, 2 - 2 1/2 in report preparation). Assumingthat the negotiationsreferred were satisfactorythen the relevsatchanges and investmentswould be made usinR specificarea - comodity projectsas the vehicles. Any central level policy and institutionalchanges would be affected in the first of these area - comodity projects. A projectoutline is containedin Appendix 1. ;1 ISNAR- InternationalService for NationalAgricultural Research, The Hagues,Netherlands. - 187 - ANNEX 5 Yage l2 PORTUGAL AGRICULTURALRESEARCH PROJECT INITIATING PROJECT BRIEF I. INTRODUCTION 1. The need to reorient agricultural research in Portugal was identified during the joint Portuguese - World Bank sector survey uission in March 1983. The major manifestation of the inadequacies in the research facility as it now exists is the serious lack of new technology available to farmers, in which a combination of materials and practices :learlymore productive and profitable with an acceptably level of risk. This is discussed in Annex 5 paras. 12 - 21 and detailed in annexes 2, 3 and 4 of the sector survey 1/. iWbileseveral other factors are constraining agriculture in Portugal as welL, it is urgent to develop and sustain a flow of regularly up-dated technical recommendation and have this coincide with other development initiatives. This is the responsibility of the research institution. II. SUMMARYOF AGRICULTURAL RESEARCH SUBSECTOR CONSTRAINTS 2. Orientation and isolatiou of research; The fundametal linkaXe with farmers and production is missing. Research for Portuguese agriculture should be directed to deriving optimum recomendations for production of the important comodities arranged in a farming systems context. This requires applying 75 - 852 of the researcheffort and locatingcompetent research scientists with adequate facilities in the rural areas, and directing them to on-farm research. 3. Under-emphasis of research: Expenditure on research is less than is required but not seriously so. Re-development as is described will require an approximately 62 annual increase in expenditure. Under-expenditure is likelv due to both budget constraints and under-emphasis. Under-emphasis probably results because planners are aware of the limited impact previous expenditure on research has had on agricultural production but unaware of the lack of technology and the influence this is having on production and the high returns that investment in well-planned and managed agricultural research can have. 4. Research staff: global staff numbers are reasonable and a number of qualified and experienced scientist remain in place. Salaries for senior people are comparable with other senior technicians in the MAFF. However, there is great variation between statious and departments from active well-wotivated staff to quite passive. The ratio of support staff to scientists is narrower than it should be to get the best use from well-trained and disciplined researchers. There is need to appreciate that research at all levels should be conducted by appropriately trained scientists who are located close to their work. The administration lacks a functional unit that studies manpower needs, recruits, trains and deploys research staff. 1/ Portugal Agricultural Sector Survey No. -POR. - 188 - ANNEX 5 AMpg¶egUl I 5. Smallness of many sub-sectors: when viewed from either the commoditv or the area standpointthere are both comodity groupsor homogeneousareas that are importantto some farmers,that have needs coomensuratewith the largercomodity groups or areas, but are too small to sustaincomplete researchsystems. There needs to be a rationalizationof those areas and comodity groups,am veil as creatingpriorities among them to nominatewhich ones justifycomplete research systems. At the same time limitedresearch capabilityneeds to be developedfor those which are smallerbut have priority needs. III. GOVERNMENT'SPOSITION 6. Governmentis aware that net importationof agriculturalproducts bas seriousbudget implicationsand that EEC accessionwill furthercomplicate this and at the same time farmersdo not make best use of the natural resources. Governmenthas committedrelatively large budgetamounts to INIA(ER),and to regionalagricultural services to strengthenextension relatedaspects. In respectof the action chain of technologydevelopment and transfer,the governmentappeared to have emphasizedvarious elements separatelyand has recentlyrealized the need to link them more closely. IV. PROJECTOBJECTIVES STRATEGY AND DESCRIPTION 7. The long-term objective is to stimulate productions of the main crops and livestockproducts to a point as close as possibleto their potential commensuratewith economic,social and environmentalconsiderations. The emphasison productionis entirelyconsistent with nationalambitions. The take-offpoint for this is the need for regularlyupated technologiesthat fit the needs of particularsystems of productionof which there are meny in Portugal. There would be two medium-term objectives addressed by this particular project, namely, isplementation of institutional components of a nationalrev,earch plan at a central level in order to create an effective management;and implementationof a regionalcommodity program to apply and test the concepts in a high priorityproduction situation. This objectiveis very much in line with the approachchosen by the planningcabinet of the NAFF. 8. The strategyis based on the premisethat researchin Portugalcan only be justifiedif it is directlylinked to defininRproduction recommendations and solving priority problems for farmers and that agriculture cannot take off without it. The approachwould be to use a priority regional productionprogram as the vehicle since the justificationfor researchis to allow changes to take place in the farmingsystem. The institutional improvementswould be determinedand carriedout in the frameworkof regional productiongoals to provideproper incentiveand direction. The planning cabinetin MAFF is now directedtowards fewer largerregional projects that addressproduction in a whole farm approachand coordinateactions by all of the concernedinstitutions. The priorityregional commodity program recommendedconcerns wheat and livestockproduction in the Alentejo. 9. The scope of the projectwould be more clearlydefined after a prerequisitenational research plan study and a final identificatienmission. The followingcomponents are most likely. - 189 - ANNEX 5 ~Pge ndlc Research Developmentat the CentralLevel 10. (a) Institutional:Reorganizing the mocagement to overcome the issues referred to in paras. 2 - 5 does not require the creationof any separate structuresbut simply some strengtheningof units that exist. Cbart No. 1 in Annex 5 shova the arrangementof the top administrationof INIAER. Three new initiativesare requiredvithin it:-(i)development of a mao-powerpolice for staff recruitment,training and allocation,with facilitiesto implementit; (ii) developmentof a functionalunit to manage externalcooperation with Portugueseuniversities, foundations and privatecompanies; and programs outside Portugalas part of the limitedresearch capability approach (Annex 5, para. 26); (iii) creationof a research stationdevelopment and management capabilitywhich will most likelyrequire outsideconsulting and training. (b) Training:there should be a heavy componentof graduate training for newly recruitedstaff who show sufficieotaptitude for research. (c) Infrastruc.ureand equipment: limitedprovision would be includedto meet any rearrangementof central scientificservices to provide a backstoppingrole for field oriented research,for example,chemical analysies of plant, animal and soil samples;pesticide evaluation for integratedpest managementprograms, statistical analysis and experimentaldesign. Research Developmentat the Level of the Project Region 11. (a) Institutional:To follow the policy of focusingresearch at the farm levela researchmanagement structure at the regional level will be essential. Strategicallythe region recommendedfor the project is the whole of the Alentejo region. INIAER already has an importantstation, the plant improvementstation, at Elvas, and logicallythis would become the regional management headquarters. This is not to say that the plant improvement stationgroup would be the directorsof regionalresearch or the project's implementingagency. A separateregional managementwould be housed at this station. This regionalmanagement would be responsiblefor planning,assuring resourcesand monitoringprogress, as distinct from supervisingwhich should remain the responsibilityof the respectivecentral level programcoordnUators (Annex 5, pars. 4). The planningresponsibility is a key one since it involvesclose coordinationwith the regionaldirectorate and farmers. (b) Infrastructureand equipment: the concept of field stations is accepted in INIAER with the CRIDA (regionalcenter for agriculturalresearch ad development)at Revilbeira50 kms south east of Evora wbich has Xood infrastructurebut is underused. Possibly 3 other stationswould be necessary to cover both ecologicaltypes and farm populations. These ouXht not to be conceived as large stations with elaboratefacilities. Mainly the field stations should be regarded as the point of generation of extension messages mad the formal link between research sad extension at the action level. This impliesa supportstation (i) to house 5 -10 research scientistsand their assistants, and 2 - 3 technicalsubject matter specialists;(ii) a field laboratorywhich might be equipped for simple soil and water analvses, physicalplant and grain analyses,preparation of soil, plant and anisal samples for forwardingto the central laboratories,silple identificationof pathogens,preparation of nutrient solutions,special fertilizer mixtures, protectionchemicals; (iii) a meeting room for scientificseminars and possiblyextension agent trainiox;(iv) a center for storingand maintaining - 190 - ANNEX 5 Appendix 1 Page 15 field equipment for research and demmontration, and ancillary service buildings. The station would have a limited area of land for essential on-st4tion research and demonstration of new techniques to extension atents. It should be possible to find the additional sites asong underused farms held by the regional directorate or the university provided that they are locsted satisfactorilv for their stated purpose. Production Project Components 12. The agricultural region of the Alentejo is the largest in Portutal having a surface of approximately 2.65 million hectares. It comprises the whole of the administrative divisions of Evora and Beje, appro ixately 852 of Portalegre and 702 of Setubal (see mop 17193) and description in Annex 1, paragraph LI. As such it is 302 of the surface of the country. Of more significance is that it has the most extensive area of arable land with a relatively light agricultural population and hence large farms with less subsistence pressure. Its climate - soils - topography combination gives it the land use capability most suited to winter field crops, forage crops and pasture. Hence, it must be regarded as the most appropriate part of Portugal for vheat and extensive livestock production. 13. There is approximately 1.9 million ha of arable land, an estimated 360,000 ha of pine and eucalyptus forest and approximately 330,000 of non agricultural land. The arabIc land comprises approximately 43,000 ha in irrigated perimeters. Actual use of arable land i* difficult to estimate because in addition to the solid forest mentioned above there is an extensive area of almost a million ha of sparse oak forest that is used also for permanent pasture and infrequent cropping. The area of winter crops planted annually is in the order of 470,000 ha of which half is wheat: crops of lesser importance are shown in Annex 2, Table l. The area of rainfed fruit and vines is approximately 180,000 ha. The PMA divides the arable rsinfed areas according to land classes, as follows: Class A 98,800 ha Class B 206,200 he Class C - best soils 87,500 he - secondarv soils 204,100 ha - under trees 80,000 ha Class D - better soils 36,000 ha - remainder 446,700 ha /a Class E 706,600 he /a /a Much is under sparse oak forest. 14. Land distribution and farm size is changing folloviog nationalization aod the reversion to private ownership. At present there are approximately 370 cooperatively managed fares of an* veroge size of 1,000 ha each. Hence, the remaining 1.7 million bectares is in medium to small farms averaging around 30 hectares each. Some degree of stability in the tenure pattern would be necessary to realize the full potential of the project but this issue is already being addressed. 15. A great opportunity exists to develop an integration (as distinct from an association) of cereal crop production and livestock production. The former would be principally wheat and the latter would be on extensive - 191 - ANNEX 5 Appendix 1 Page 16 production of sheep and cattle based on a feeding regime using crop residues, fodder crops, forages particularly those based on self-regenerating annual legumes, conserved fodder for off-season supplements, and the range. Sufficient preliminary information is available to know that technological opportunities exist for both of these enterprises (Annex 2, para. , Annex 3 paras. 77-82), that increased production could be attained and that to do so would be an important priority for Portugal. Furthermore, field focused research is essentiaL to develop this combination of productions. The technical approaches to increasing and integrating production of these commodities is discussed in Annex 2 , and Annex 3 16. The Project therefore would put in place the essential components of research development described in para. 11 and focus on the following general themes. Disciplines Commodities Wheat: seed bed preparation for maximum stand establishment and soil moisture management; fertilizer strategy; weed control by combining competition, cultural and chemical techniques; interaction of varieties of different maturities and growth patterns with these production strategies; Secondary cereals: yield comparisons of wheat, oats, barlev as second crop and the implications of disease control; Fodder and forage crops: yield comparisons of cereal, grain legume comparisons for grazing, hay and silage; use of standing oats as a feeding strategy; fodder conservation strategies. Annual forage legumes: management of subterranean clover in cropping systems; fertilizer strategy for subteranean clover with particular reference to the molybodenum-lime interaction. Disciplines Rotations - quantify costs and outputs of defined and limited alternatives; soil fertility - residual effects of fertilizers in the systems integrated pest management. This list is not intended to be exhaustive but rather indicative of the necessary research approach. 17. The utilization of results of action oriented research requires a formal mechanism to put them into a framework that is attractive to users. As it is not possible to foresee the type of extension methodology best suited to the Alentejo at this point this Project should simply develop the chain as far as the subject matter specialists. The subject matter specialists would cooperate in the iterative process with farmers for fine tuning the research results a-d prepare the extension messages. - 192 - ANNEX 5 Appendix 1 Page 17 18. The transfer of technology requires that production inputs be available and credit to finance them accessible if it is required. It is expected that the latter would be available and not be required as part of a loan. However, seed and machinery availability should be assured by the Project. Seeds, particularly of cereal varieties and forage plants, are important and the Project should be the vehicle to develop a Portuguese seed program. The integrated agriculture concept needs combinations of farm machinery not common in Portugal. The Project shouLd introduce ana demonstrate machines for tillage, pasture establishment, and management and fodder conservation. Projects Costs - Phase I (4 years) 19. Central level (a) graduate training (40) 2,500,000 (b) infrastructure and equipment 1,800,000 (c) technical assistance for; research 200,000 station development and management; manpower development Regional Level (a) research station: development 2,500,000 equipment 2,300,000 (b) seed production 11 5,500,000 (c) farm machinery 250,000 (d) on-farm investments Incremental Operating Costs (early and decreasing funding of portion of incremental operating expenses is proposed - 100% - year 1, to 25% in year 4) 1/ Seed production program sub-components further elaborated in Appendix 2. Timetable of Actions 20. The following timetable is feasible: (a) Prerequisite studies (components of TA Project): completed by June 1985 (i) research organization and management; (ii) project feasibility and preparation; (iii) seed production sub-component (b) Appraisal September 1985 (c) Board Presentation April 1986 (d) Implementation of Phase I (4 vears) commence October 1986 (i) graduate training: some preselection of first students to start in late 1986 October 1986 (ii) research station development December 1986 (iii) seed production sub-component January 1987 (iv) regional research programs start Mid 1987 (v) subject matter specialists in place Mid 1988 (vi) limited farmer participation Mid 1989 - 193 - ANNEX5 Appendix 1 Page 18 Project Benefits 21. The project should be regarded as a first time slice of a longer program. Project benefits should be linked to farmer participation which would not possibly start until half way through the project. Benefits would build up slowly over a ten year period and should be continuous. In respect of wheat there should be a 75-80% increase in yield over 250,000 ha. Secondary cereals would benefit to a minor extent. The significant production increase would come from livestock. Production costs at the farm level per unit of production are expected to diminish by good integration of enterprise and application of research results. ANNEX-5 - 194 - Appendix-2 Page 19 PORTUGAL SUB COMPONENTSOF A SEED PRODUCTIONPROGRAM 1. It is proposedthat a seed productioncomponent be part of the researchand commoditydevelopment project proposed in Appendix1. However, the seed productioncomponent is virtuallyfree standingand hence could be implementedseparately or as a componentof another project. Hence a brief discussionof what is requiredis presentedseparately in this appendix. 2. All componentsof a productionpackage are importantand interact. Seed has its own importancesince it is the carrier of geneticpotential for higher crop production. If it is seed of an improvedvariety it can introduce change and help achieveagricultural production objectives. This genetic potentialwill arise from the country'sown crop researchor will be introducedfrom some other program. The origin is of little importanceas long as farmershave availableto them the best varieties. At the saue time as having the inherentcharacters, the seed whatevervariety it is, needs to be at least above a minimum quality. The impetusof many plant improvement programsis lost because qualityof seed of improvedvarieties is not availablein the quantitiesor at the locationsrequired. 3. A seed program is first of all a service to farmersand consistsof the measuresand the activitiesto be implementedin a countryto achieve the timelyproduction of the seed of the qualityand quantityrequired. Most countrieshave some sort of seed programanywhere from the plant breedingor plant introductiondepartments distributing small quantitiesof seed to a few farmers,through to, an active national seed policy that gives attentionto commercialproduction and marketing,an effectiveseed law, continuous training,quality control and certification. 4. In order to establishwhere Portugalsits in this respect it is necessaryto constitutea seed review team with the followingobjectives (a) to see what are the seed needs vis-a-visthe broad agriculturalobjectives; (b) to determinethe objectivesand outputsof the plant improvementresearch programs;(c) to understandwhat policiesexist to get new varietiesinto circulationand at what level; (d) to see if there are mecbanismsfor building up commercialand certifiedseed; (e) to see what qualitycontrol measures exist and how effectivethey are; (f) to understandhow seed gets to farmers and the constraints to him acquiring it; (g) to see if the government has a seed industrypolicy; (h) to see how these various sub-componentswork together. 5. The full list of componentsfor a seed programare usuallylisted as follows:- (a) Researchand development; (b) Basic seed productionas part of research; (c) Basic seed outside of the researchstep; (d) Seed enterprises; (e) Seed certification; (f) Seed law enforcement; (g) Seed testing; (h) Educationand promotion; - 195 - ANNEX 5 Appendix 2 Page 20 These are the significant cost items each having capital and operating costs. In all countries and more so in developing countries, the government needs to be involved in some of these components. Items (c) and td) and the second part of (h) can be shifted into the private sector but the government needs to intervene in the others. With time some activities become self-sufficientand the private investment increases. 6. Considering the wide ranging seed needs in Portugal it would be verv easy to become involved in an extremely complex project which could become too difficult to implement. It should be wise therefore to make winter cereal seed the first to be handled. After initial experience the seed program could move into hybrid maize and then forage plants always using the framework set up for cereals.