Session 3: In-Country Presentations on Value Chain Studies (LSFM Pilot Projects)

Study 1: Value Chain Analysis of Free Range Chicken (Cambodia)
By Sim Kong, General Director, CEDAC Agri-based Enterprise Support Program

The value chain for free range chicken follows a typical product flow. Farmers or producers sell the chicken to middlemen, who add value by incurring transportation costs to bring the chicken to the whole sellers. The whole sellers, who do the slaughtering and processing, then pass this on to retailers such as supermarkets who in turn make the chicken available either directly to consumers or food processors (restaurants) who add even more value by preparing/cooking the chicken before this is finally bought and consumed by their clients. Through this entire process, the price of the chicken is increased from 13,000 Cambodian Riel (KHR) or US$3.29 (from the farmer) to 24,000 – 32,000 KHR or US$6.07 – 8.09 (to the consumer).

As part of the analysis, it was determined that there is a strong market demand for chicken because all classes of people eat this. Some concerns and issues in producing free range chicken that emerged are:

• Farmers do not know/count the cost of raising their chickens
• Small farmers are price-takers, not price-setters when it comes to selling chicken
• Small farmers are not getting much benefits through current market (because they are not producing enough)
• There are no market intermediation mechanisms to help small farmers
• There is no interaction between producers and consumers, though many local people support the product
• There is limited implementation of government policies and regulations on food safety and slaughterhouse management
  

It is being recommended for CEDAC to initiate market intermediation mechanisms for the free range chicken farmers.

Download the Cambodia Free Range Chicken VCA.ppt

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Session 3: In-Country Presentations on Value Chain Studies (LSFM Pilot Projects)

Study 2: Value Chain Analysis of Calamansi (Philippines)
By Mr. Jesus Vicente Garganera, National Coordinator, PhilDHRRA

A market research scanning on calamansi that was done revealed important statistics and information for any farmer or group of farmers interested in producing and marketing. It was found that the production of calamansi in the country has been increasing, with major supplies coming from Central Philippines (although it can only be produced there 4-6 months in a year because of typhoons) and less but more consistent (all-year round) supplies coming from Southern Mindanao. A minimum of half a hectare is required to make calamansi production successful and it costs around 4 Philippine Pesos (Php) or 9 US cents to produce one kilo of calamansi. Potential returns are estimated to be about US$2000/year for one farmer.

The value chain actors are comprised of the farmer, the assembler or distributor (who brings the calamansi to the capital of Manila), the retailer (markets that make the calamansi accessible) and the consumer. The price increase from farmer to consumer is almost 1000%!

One initial realization was that the simple repackaging from sacks to crates can already added value because it reduces the number of damaged calamansi being delivered. Fresh calamansi can also be processed into juices, syrups, powders, etc as alternative ways of consumption (as well as maximizing the plentiful harvests during seasonal months), and there is an industrial use for it as well. Therefore, another important learning was that it would be worthwhile diversity the value chain analysis to go beyond the fresh fruit. In order to do this, however, more research is required such as identifying potential industrial markets (i.e. laundry, soap and noodle industry), and analyzing the market segmentation so that farmers will know where they can make the most profit. It will also be necessary to share such findings to the farmers (through a report) and build their capacities further.

Finally, considering its rich vitamin C content (100% RDA in one fruit), it may also be beneficial to discover the health/medicinal benefits of calamansi as input into future marketing strategies.

Download the Philippine Calamansi VCA.ppt

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Session 3: In-Country Presentations on Value Chain Studies (LSFM Pilot Projects)

Study 3: Market Situation in Vietnam
By Mr. Nguyen Van Tam, Director, Research Department, VNFU

Vietnam is currently transitioning into a market economy. As a new member of the WTO, it is now exporting food products and has diversified some of its economic sectors. However, there are still many challenges ahead before the country can become a 100% market economy:

• Commodity quantities in the markets are still limited and poor
• Production costs are still high and competitiveness is low
• Both entrepreneurs and farmers lack knowledge about the market economy

The value chain analysis that will be done as part of the LSFM project will be on organic tea.

Download the Market Situation in Vietnam.ppt

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