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Baseline Investigation of Horticulture Value Chain in Upper Egypt Final Report

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Baseline Investigation of Horticulture Value Chain in Upper Egypt Final Report Baseline Investigation of Horticulture Value Chain in Upper Egypt Final Report Presented to The United Nations Development Programme (UNDP) Presented by Entrust Development & Management Consultants May 2011 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report RESEARCH TEAM Technical Team Researchers Khaled Hassanein Lamia Bulbul Agronomist/Horticulture Specialist Senior Researcher/Gender Expert Ussama El Rouby Khaled Abdel Fatah Agronomist/Post-harvest Specialist Senior Researcher Muhammad El Khouly Adel Shaaban Institutional Development Specialist Senior Researcher Christiane Wissa Statistician Ghadi El Helaly Junior Researcher Tamer El-Meehy Team Leader 3 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report LIST OF ACRONYMS GDP Gross Domestics Product GOE Government of Egypt TOR Terms of Reference PHC Post-harvest Center FA Farmer Association HDI Human Development Index UNIDO United Nations Industrial Development Organization ETRACE Egyptian Traceability Centre for Agro-Industrial Exports USAID United States Agency for International Development ACDI/VOCA Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance AERI Agricultural Exports and Rural Incomes HEIA Horticultural Export Improvement Association RPT Refrigerated Perishables Terminal MOU Memorandum of Understanding MALR Ministry of Agriculture and Land Reclamation- Egypt MDG Millennium Development Goals ICT techniques Information Communications Technology NGO Non-governmental organization CAPMAS Central Agency for Public Mobilization And Statistics- Egypt FGD Focus Group Discussion ISO International Organization for Standardization CASP Central Administration for Seed Production CDA Community Development Association UPEHC Union of Producer and Exporters of Horticulture Crops VCA Value Chain Analysis PBDAC Principle Bank for Development and Agriculture Credit SFD Social Fund for Development UNOPS United Nations Office for Project Services NRC National Research Center ARC Agricultural Research Center BRC standards British Retail Consortium ISO International Organization for Standardization, HACCP Hazard Analysis Critical Control Point 4 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report TSS Toxic Shock Syndrome GM General Manager GMP Good Manufacturing Practices PNA Participatory Needs Assessment 5 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report EXECUTIVE SUMMARY The “pro poor Horticulture Chain in Upper Egypt project” is a joint programme between specialized agencies and entities of the United Nations working in collaboration with national counterparts. The overall objective of the project is to enhance the efficiency and productivity of Upper Egypt’s male and female small farmers and agricultural workers, and also to build the capacity of small Farmers’ Associations (FAs). Entrust was commissioned to carry out a baseline investigation of horticulture value chain in Upper Egypt, aiming at providing a better understanding of small farmers’ situation and conducting a comprehensive gap assessment of the local Farmers Associations and PHCs. The baseline investigation was carried out in six governorates in Upper Egypt; Sohag, Minya, Bani Suef, Assiut, Luxor, and Qena, during the period between October 2010 and January 2011. The investigation combined quantitative and qualitative data collection techniques. Key findings The findings of the baseline investigation were organized in accordance with the stages identified in the mapping of the horticulture value chain. These are: input supply, production, harvesting and post-harvesting and marketing. The analysis paid special attention to the relationships between various actors and small farmers. Inputs supply The main problems that inputs suppliers encounter in their work are related to inadequate infrastructure, and inability to respond to growing demand among farmers. Farmers mistrust suppliers because they sell low quality inputs for higher prices The existence of an active FA help farmers to overcome their problems with inputs suppliers, particularly female farmers. Farms & production The main problems facing the farmers & workers are related to the production inefficiencies due to farmers & workers’ lack of expertise and technology in land preparation and crop management; High costs of input supplies; lack of sufficient extension services, market information, labor training, source of finance, and trust in written contracts due to the Egyptian judicial system; rudimentary infrastructure; low wages and limited work opportunities; in addition to the rigid gender division of labor. 6 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report Institutional capacity assessment Farmers’ Association falls under the “Developing Stage”, as they lack leadership, assessment of performance, proper financial recording systems and independent audits or external financial reviews. The research team recommended a number of FAs to serve as partners of the project. As for the PHCs their infrastructure is good but there is a need for developments, maintenance and some constructions that are yet to be completed so as to meet requirements of international standards and customers. Marketing & market Channels Long-term and strong relationship exists between farmers and trader; as they serve as the main source of market information, and financial support. The challenges faced by exporters including: unpredictable variance in crop price, inadequate infrastructure, lack of the quality standards and control systems applied either among farmers or in PHCs. Food processing companies are more likely to work in an area where technical support and efficient extension services are being provided to farmers. For supermarkets, sourcing horticulture crops from Upper Egypt is an advantage to secure continuous supplies all over the year. However, agreeing on the crop specifications (quality) and price remains the main problem in dealing with farmers/traders. Lack of a master plan for agricultural investment, the insufficient incentives for investors, lack of extension training services, insufficient infrastructure, lack of market information, and unidentified investment zones are factors that hinder investors to work in the horticulture sector in Upper-Egypt. All the actors interviewed; expressed their willingness to work with farmers in Upper Egypt farmers provided that that they receive the required training on the administrative and marketing. Key Recommendations FAs Conduct a comprehensive capacity building program for farmers associations according to their needs to include: Establish an agriculture extension department Establish legal department to provide legal support on contracting Farmers Develop and deliver a scientifically-based integrated training and extension program covering all stages of agricultural production, harvesting and post- 7 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report harvesting processes, with specific attention to the seven crops identified in the study. Problems with high cost, unavailability and low quality of supplies can be tackled through active involvement of the farmer’s associations by collective purchase of input supplies from trustworthy sources, thus assuring the quality and reducing the final cost to the small farmers. Conducting joint orientation/training sessions with exporters, input suppliers, traders, food processors, supermarkets …etc. Marketing Improve the market information delivery and dissemination by developing a user-friendly marketing information system and packaging collected information into extension messages on economic returns, where to sell and quality control. Providing training and orientation sessions to farmers on marketing of horticulture products and quality standards of different buyers. Policy measures 1. Government‏ should play a stricter supervisory role in the input supply system 2. Establish‏ an arbitration system for settling disputes between farmer associations and exporters, as well as other buyers. 3. Develop a tax incentive package that encourages businesses to invest in cold chains for horticultural produce in Upper Egypt 4. Reconsider the application of the 15% export subsidies given to exporters. 5. Revise the law governing cooperatives in order to allow them more autonomy. 8 Baseline Investigation of Horticulture Value Chain in Upper Egypt: Final Report TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................... 6 I. INTRODUCTION ............................................................................. 13 1. Project Background ........................................................................................................ 13 2. Purpose of the Report ..................................................................................................... 14 3. Organization of the Report ............................................................................................. 14 II. AGRICULTURE AND POVERTY: THE EGYPTIAN CONTEXT ..................... 15 1. Introduction ...................................................................................................................... 15 2. Horticulture in Upper Egypt ............................................................................................. 16 3. Assessment of Horticulture Projects in Upper Egypt ......................................................
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