FINAL Mango Value Chain_Challanges and Opportunities (1).pptx

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1. Organized By Department of Agriculture & Environmental Sciences, National Institute of Food Technology Entrepreneurship and Management (NIFTEM), Kundli -India Ministry of Food Processing Industries, Government of India   Challenges and Opportunities in Mango Value Chain Management in Developing Countries By Sreekanta Sheel , PhD International Food Value Chain Expert Andhra Pradesh Irrigation and Livelihood Project (a JICA funded Project), Vijayawada, Andhra Pradesh, India & International Seed Commercialization and Intellectual Property Specialist Climate Friendly Agriculture Value Chain Sector Project (an ADB funded Project), Ministry of Agriculture, Forestry and Fisheries, Cambodia LinkedIn profile:  https://www.linkedin.com/in/dr-sreekanta-sheel-271a9938/ Cell: [phone] (Bangladesh also WhatsApp); [phone] (India); [phone] (Cambodia) International Webinar On “Mango Producing is Not Enough! Wakeup Call on Postharvest Handling, Processing Technology and Value Chain Management”

2. Scheme for Creation of Forward Backward Linkages 2 The objective of the scheme is to provide effective and seamless backward and forward integration for processed food industry by plugging the gaps in supply chain in terms of availability of raw material and linkages with the market. Under the scheme, financial assistance is provided for setting up of primary processing centers/ collection centers at farm gate and modern retail outlets at the front end along with connectivity through insulated/ refrigerated transport.

3. Scheme for Creation of Forward Backward Linkages 3 The Scheme is applicable to perishable horticulture and non-horticulture produce such as fruits, vegetables, dairy products, meat, poultry, fish, Ready to Cook Food Products, Honey, Coconut, Spices, Mushroom, Retails Shops for Perishable Food Products etc.The Scheme would enable linking of farmers to processors and the market for ensuring remunerative prices for agri produce. The scheme is implemented by agencies/ organizations such as Govt./ PSUs/ Joint Ventures/ NGOs/ Cooperatives/ SHGs / FPOs / Private Sector / individuals etc.

4. Project Components 4 Backward Linkage: Integrated Pack-house(s) (with mechanized sorting & grading line/ packing line/ waxing line/ staging cold rooms/cold storage, etc.) Milk Chilling Centre(s) /Bulk Milk Cooler(s) Pre Cooling Unit(s)/ Chillers Reefer boats Machinery & equipment for minimal processing and/or value addition such as cutting, dicing, slicing, pickling, drying, pulping, canning, waxing, etc. Machinery & equipment for packing/ packaging.

5. Components 5 Forward Linkage: Retail chain of outlets including facilities such as frozen storage/ deep freezers/ refrigerated display cabinets/cold room/ chillers/ packing/ packaging, etc. Distribution center associated with the retail chain of outlets with facilities like cold room/ cold storage/ ripening chamber. Transport: Refrigerated/ Insulated transport / Reefer Vans in conjunction with backward and forward linkages.

6. Pattern of Assistance 6 The maximum grant extended per project is Rs 5.00 crore @ 35% of the eligible project cost for general areas and @ 50% for North East States, Himalayan States, ITDP Areas and Islands respectively. The grant is provided only in respect of technical civil work and eligible plant & machinery.

7. Release of Grant 7 The grant-in-aid under the scheme is released in three installments of 25%, 40% and 35% as per following schedule. The first installment of 25% of the approved grant is released after ensuring that 25% of the promoter’s contribution and 25% of the term loan is spent on the eligible project cost; The second installment of 40% of grant is released after ensuring utilization of first installment of grant released, 65% of promoter’s contribution and 65% of term loan; The third and final installment of remaining 35% of the approved grant under the scheme is released after ensuring utilization of the second installment, 100% of promoter’s contribution and 100% of term loan.

8. The Economic Linkage Effects of Food Processing Industry 8 Linkages is a phenomenon which measures the capability of an industry to generate demand for the products of the other industries. Form the point of view of development strategy, linkages are one of the essential feature of an industry. Linkages are of three types: Forward, Backward and sideways.

9. Pattern of Assistance 9 The maximum grant extended per project is Rs 5.00 crore @ 35% of the eligible project cost for general areas and @ 50% for North East States, Himalayan States, ITDP Areas and Islands respectively. The grant is provided only in respect of technical civil work and eligible plant & machinery.

10. Forward Linkage 10 It is when, the establishment of a processing industry can lead to the development and establishment of the number of advanced stage industries. Example, Forest Industry, when established as a base industry, results in establishment of vast number of advanced processing industries like: manufacturing of paper, paper bags, stationary, boxes made of paper, cartons, wooden boxes etc. There are many other examples: products such as vegetable oils and rubber are used in a wide variety of manufacturing industries; based on the preparation of hides and skins, tanning operations can be started, as can the manufacture of footwear and other leather goods.

11. Forward Linkage 11 The feedback effects generated by a base industry on the development of the base sector is called backward linkage. The development of the food processing industry has many feed back effects on the agriculture sector itself. For Example, once a food processing industry is established, it results in increasing the demand of raw materials provided by the agriculture sector. The establishment of processing facilities is itself an essential first step towards stimulating both consumer demand for the processed product and an adequate supply of the raw material. The provision of transport, power and other infra-structural facilities required for agro -industries also benefits agricultural production. The development of these and other industries provides a more favourable atmosphere for technical progress and the acceptance of new ideas in farming itself.

12. Sideways Linkage 12 Sideways linkages are mostly derived from the use of by products and waste products of the main base industrial activity. For example: many food processing industries using agriculture raw materials produce waste that can be used further in production of fuel, bio-fuels, paper pulp and fertilizer. The production of sugar results in production of molasses as a waste product, which is used by the Alcohol Brewing industry in the production of ethanol. The capacity of Food Processing industry to generate demand and employment in other industries is the important aspect of the processing industry. It works because of processing industry growing potential for activating backward, forward and sideway linkages.

13. Backward Channel 13

14. Forward Channel 14

15. The Growth of Food Processing Industry at Initial Stage 15

16. The Growth of Food Processing Industry at Intermediate Stage 16

17. The Growth of Food Processing Industry at More Advanced Middle Income Stage

18. The Growth of Food Processing Industry at Final Stage Stage 18

19. Pattern of Assistance 19

20. Pattern of Assistance 20

21. Export market sharing performance 21 Data source: https://www.trademap.org/ and https:// ihsmarkit.com /research-analysis/special-report-the-world-is-looking-beyond- india.html Geographical location is an important factor for fresh mango export Processed mango export is a good option for south Asian Countries Food safety and quality assurance for processed mango products would be competitive for the export market Value chain development for processed mango should be given more emphasis for the South Asian Countries

22. Use of Market System Checklist to find out the Challenges in the Mango Value Chain Development Challenges in Increasing the Competitiveness in Mango Value Chain Linking Access to Export Market

23. Let’s give a look on the steps of a typical mango processing value chain as well as market system as an example… To see the critical points where the challenges prevail…

24. Value Chain Actors Area of Operation/Aspects   Prevailing Constraints Value Chain Actors include input suppliers, producers, processors, traders, distributors, wholesalers, and retailers that provide services required to get the product to the final consumer) Still lacks the common effective platform among the value chain actors to develop interfirm relationship Vertical linkage among the VC Actors Weak linkage Lack opportunity for traceability Application of Block Chain Technology not initiated  

25. Service Providers (Private Sector/ Public Sector) Features of Service Providers (Private Sector/ Public Sector) Prevailing Constraints Service Provider (Contractual Private Sector Service Provider for Specific Tasks)   Still lacks proper skill. Technological SP Still lacks Business Incubator Service provider in the developing countries! Business Promotion SP

26. Business Enabling Environment Features of Business Enabling Environment   Prevailing Constraints Formal—laws, regulations, policies, international trade agreements and market standards Compliance gap: Lacking international market standards in most cases Lacks proper policies for pricing There are several kinds of taxes involved during transportation Informal—norms, customs and codes of conduct Lacking quality management system in most cases Public infrastructure and services—roads, education, health services, electricity, Reliable access to water, energy and ICT etc. Still not sufficient! Transportation road to city center damaged or totally earthen Lacks post-harvest, pack house operations in the existing market centers No facilities for women corners at the market centers at al A healthy, appropriately skilled workforce Still not sufficient!

27. Area of Operation/ Aspects Challenges/ Constranits Input Supply Quality fertilizers and insecticides are not sufficient in many cases Training services for the input supplier are not sufficient Production management Traditional production management activities resulting low productivity of the crops Use of improved technologies at lower level Production cost higher in compare to yield Use of the chemical fertilizers and pesticides at improper doses Insufficient farm machinery Lack of ease in financial services Post-harvest Handling (Primary Processing) High post-harvest loss of commodities Deterioration of quality during post-harvest handling Harvesting are also challenging due to lack of mechanized harvesters The harvesting season faces the high temperature that affects the postharvest operations like high rate of respiration that deteriorate their quality. Inappropriate packaging and lacks transit cold storage facilities Absence of maintaining food safety Lacks Packhouse operation facilities in most cases Challenges in Value Chain Operations

28. Area of Operation/ Aspects Challenges /Constraints Secondary Processing Value adding commercial initiatives are insufficient Food Safety and Quality Assurance Handlers not aware about the quality retention, hygiene and sanitation Lack of awareness on quality certification Market Access and Inter-firm Relationship among VC Actors and Service Providers Lack of a farmers’ meaningful horizontal integration Lack of common standard facility for market system Market location is far from field Absence of network among farmers, traders, processors, wholesalers and exporters Lack of access to proper transport system Challenges in Value Chain Operations ( Contd …)

29.   RECOMMENDATION   Benchmarking: Comparing the price, quality and other attributes of a product against those from competing businesses or countries Introduce Business Incubation System Assure Food Safety and improved quality standards Adopt good agricultural practices (GAP): Global GAP is the best option In Kenya the private sector developed KenyaGAP but buyers in the EU and US continued to demand GLOBALGAP as the minimum entry requirement making KenyaGAP redundant for exports to these markets. Introduce quality certification for GHP, GMP and HACCP at pack house and processing enterprises Measure will be taken to upgrade agro -industry to meet international standards: Food Safety Management System (ISO 22000), Sustainable Forest Management System (SFM, ISO 14061) or other equivalent international standards. Establishing a one-stop center to facilitate the compliance on food safety and quality; Private sector-led approach: UK Red Tractor Standards and British Retail Consortium (BRC)

30. Introduction of Blockchain Technology Blockchain enables managing food safety issues by making the system with improved transparency. To avoid fraud, amplify the payment process, the farmers get benefited offering more value and better selling chances by connecting farmers directly to the consumers without any intervention from the intermediaries. Blockchain empowers the agri-food industry to Uberize by reducing transaction charges and intermediaries. Aggregation models: Encourage and promote aggregation models to bring economies of scale in operations Aggregation models such as productive partnership, contract farming, or producer group, among others need to be encouraged to facilitate the delivery of extension services and improve farmer’s ability to access finance, develop joint infrastructure, lower marketing logistics costs and better connect with large buyers and off-takers. Improving marketing infrastructure and logistics services and access to energy Facilitate access to finance for value chain actors Policy Interventions Price fixing of the commodity on the basis of quality using a set of criteria Develop policy for other enabling environment elements where necessary towards smooth implementation of the value chain activities   RECOMMENDATION ( Contd …)

31. CONCLUSION Geographical location is not much favourable for fresh mango export as the larger export market is far requiring huge cost for air cargo transportation Processed mango export is a good option for south Asian Countries Food safety and quality assurance for processed mango products would be competitive for the export market Value chain development for processed mango should be given more emphasis for the South Asian Countries Value Chain Approach that are inclusive of emphasizing PH loss reduction, Quality Assurance with Essential Standards as well as Appropriate Marketing Strategy is required towards enhancing the competitiveness of the mango sub-sector!

32. Thank You