1 Session 2: High Quality Products at Higher Prices: The experience of the Taiwan Wax Apple...
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Transcript of 1 Session 2: High Quality Products at Higher Prices: The experience of the Taiwan Wax Apple...
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Session 2:High Quality Products at Higher Prices:
The experience of the Taiwan Wax Apple Development Association
(TWADA)
Wen-Chi HuangDeputy Secretary General, TWADA
President, Taiwan DHRRAAssociate Prof, NPUST
2
Background
• What is TWADA? Brief Background of TWADA, History
• Why it formed wax apple producers into an organization
• Average farm sizes, average production
• Brief description of the market of wax apple
3
TWADA
• TWADA = Taiwan Wax Apple Industry Development Association
• Established in August 31, 1999.
• Initiative by Kaohsiung District Agriculture Research and Extension Station to enhance the ability of the existing “wax apple production and marketing teams” to expand the domestic and export market
4
What is its current operations engaging and linking farmers and
their produce with markets
• wax apple production in 2007
• cultivated areas: 6,792 ha,
• harvested areas: 6,736 ha,
• average output : 12,207 kg/ha,
• total output: 82,223mt.
5
Marketing Initiatives
• Major production season is between late Oct. to early June
• More than 50% go through the production and marketing team to be collected, graded, packaged and send to Farmers’ Association for joint marketing to the top three biggest consumption market in Taipei, however, it is already a mature and stable channel.
• Door-to-Door delivery services by the commercial companies provide a new chance of direct marketing through internet
• Export trade is approximately 5% (compared with the national statistics of 0.05% in 2007)
7
Farm Gate Price
Annual Average Farm Gate Price for Waxapple in Taiwan
0.00
10.00
20.00
30.00
40.00
50.00
60.00
1985 1990 1995 2000 2005 2010
Year
Price
(N
TD
/kg)
10
Performance of the Branded Product in the Wholesale Market
• The product price information in the wholesale market island wide is available (within one month) show that the price can range from US$2.81/kg to US$12.5/kg with an average of US$5.28/kg
12
Major Export Market for Wax Apple
Export Value 1995-2008
0
50,000
100,000
150,000
200,000
250,000
300,000
1994 1996 1998 2000 2002 2004 2006 2008 2010
Year
USD
Total
China
Canada
Hong Kong
Singapore
13
Export in 2008Eport Volumn and Unit Price in 2008
010,00020,00030,00040,00050,00060,00070,00080,00090,000
CHINA CANADA HONG KONG UNITED STATES UNITED ARABEMIRATES
Destination
Kg
0123456789
US$/K
g
Volumn
Price
14
Seasonality of Export
• Between 1995 to 2005 the waxapple are exported only during part of the year, but ever since march 2005 to now, there is continuous shipment made
• The production are timed to different market from different production area, and the decision of the production planning of the farmers
15
Export SupplyYEAR Ja F M A M JuneJY A S O N D Total Value
1995 587
1996 3,093
1997 20,278
1998 102,666
1999 81,670
2000 7,584
2001 14,016
2002 34,241
2003 95,092
2004 10,606
2005 193,726
2006 279,577
2007 204,618
2008 220,506
2009 138,080
16
Import
• Taiwan used to import From Thailand– In 1995 (8,540kg @US$ 0.803/kg)
From Vietnam– In 1995 (263,385kg @ US$0.466/kg)– in 1997 (309,878kg @ US$0.700/kg)– In 1998 (391,350kg @ US$0.588/kg)
• Note: Taiwan started to export in 1995, to US (75kg@US$7.827/kg)
17
How do TWADA address the following issues:
• Economy of scale in terms of delivering products to the market
• How do product quality standards and policies are implemented to ensure consistent quality? What are the mechanisms for quality and food safety control
• What are the policies that govern product quality and food safety standards within TWADA
18
Economy of Scale
• The teaming up of farmers could have tremendous saving on the chemical and fertilizer costs. And to negotiate the term of the trade.
• By knowing the quality and timing of the harvest, the members could plan ahead for the targeted marketing season and channel.
19
Implementation of product quality standards
• TWADA provide technical support for the members. The qualified products are encouraged to be exported to increase the farmers’ revenue.
20
Mechanism for quality and safety control
• TWADA set up the standardized operation procedure based the Global GAP standard
• The quality standard has been set up by TWADA into 3A,2A, and 1A. It is still depend on the visual examination of the fruits to see which level does it fit into.
• More on the quality standard……
21
There are 24 grades of Wax apple
• 4 fruit sizes: XL (120-150g), L(100-120g), M (86-100g), S(75-86g)
• 6 internal quality: AAA, AA, A, BBB, BB, B • Grade A represent sweetness level of Brix 10 or
above; B represent Brix 8 or above.• A represents dark red (black) , B represents
pink; • AAA is bright black, the level of darkness
decrease with AA and A • BBB is red, and the color fades with descending
order with BB and B. B is light red color
22
Policies govern product quality and food safety standards within TWADA
• Good Agriculture Practice (GAP)– They are based on the production and marketing
teams to apply for the government standards
• Traceable Agriculture Product (TAP)– Now focusing on product for export (mandate); other
farmers can participate voluntarily
• Global GAP– Local government helped financing on the
accreditation of the model production and marketing team (of Mr. Tsai) (the first one, globally)
23
Good Agriculture Practice (GAP)
• The GAP logo is a accredited logo for qualified in chemical residual.
Weblink for the GAP authority of the Agriculture and Food Agency of COA: http://agrapp.coa.gov.tw/GAP/JSP/index_1.jsp
24
Traceable Agriculture Product (TAP)
• Logo, production information, accreditation organization, traceability code, and where to obtain the information has to be clearly show on the product.
• The farmer has to follow the product specific operation manual
25
Where does TWADA get support, technical, financial, marketing, etc.?
• The Kaohsiung District Agricultural Research and Extension Station (KDAS) is the responsible government extension branch in providing technical assistant.
• In fact the TGAP for wax apple was complied by KDARES
26
Where does TWADA get support, technical, financial, marketing, etc.?
• TWADA collect membership fees from the members
• Financial and marketing initiatives are grant-based; there is no guarantee of funding.
27
Where does TWADA get support, technical, financial, marketing, etc.? (3/3)
• Successful cases– join in the international marketing by COA to
various export destinations – Grant on packaging materials; – TWADA communicates to local authority on
product show/competition– Wax apple competition is held every year– Wax apple was among the top 10 most popular
fruits in 2007 (voted by consumer over the internet)
28
How does TWADA contribute to the incomes of its members? What are the income levels
of wax apple farmers under TWADA?
• TWADA is not a profit making entity.
• The members annual average revenue is NT$200,000 per 0.1 ha, which means the average revenue per hectare is 2 million.
• The average farm size is 0.7ha-1.1 ha
29
What are the advantages and disadvantages of a commodity-based organization of farmers?
• Advantage: wax apple production need special technique. TWADA has its own technical team to help out other members. It is always important to have alternative channels for marketing the products to be better informed of the situation
30
What are the advantages and disadvantages of a commodity-based organization of farmers?
• Disadvantage: since it is difficult to take of the fruits (typhoon and cold front causes the losses) that some of the members are also engaged in other fruit production to diversify the income source.
• Other Comments:– The members of the TWADA are also members of
the respective farmers associations. The FA provide comprehensive services, and due to concentrated production area of the wax apple, some FA also put their efforts to promote wax apple, but they are not focusing on export market.
31
Other important advice, suggestions for farmers groups, NGOs on small farmers engaging with
markets.
TWADA is not a profit making entity. • But we use our advantage as a data-warehouse
for channeling the trading companies with the farmers who are interested in international marketing, and help to improve on the term of trade.
• Small farmers should try to cooperate with other farmers to enlarge their scale to become more competitive in the market
32
Some News scripts• On Jan, 2003, a local newspaper in Vancouver,
Canada reported that the waxapple from Taiwan is soon to be sold in the supermarket there. The TWADA Chairman, Mr. Chen, M.F. talked to the group of supermarket managers in Vancouver about the marketing plan of waxapple there.
• On Jan 15, 2004 one of the branded high quality waxapple (Lin-bien Township in Pingtung) is able to get the top bid of the Taipei wholesale market ever:
10 wax apples for NT$6,000 (US$182)!