Livelihood diagnosis and value chain analysis:Options for enhancing and
monitoring development impact
IFAD/ICARDA Knowledge Exchange Workshop
26 – 29 October 2009
Knowledge and Technology Exchange for Enhanced Quality of
IFAD/ICARDA Operations in the NENA region
Presented by Aden A Aw-Hassan
Non-farm Livelihoods Strategies
Migration:
• Permanent: importance of remittances
• Seasonal: off-farm income
• Off-farm income = 48%
25 207
31
9
8
0
10
20
30
40
50
60
Countries outside Syria
National Local
% o
ff-f
arm
inco
me
Agriculture Non agriculture
Sources of off-farm income
Productive Asset-based Household Typologies
9 5
239
8476
28
15 9
719
2913
8276
5048
153
0
10
20
30
40
50
60
70
80
90
100
110
Farming Herding No off farmwork
Off farmwork
Off farmwork
No off farmwork
Labourers Agriculturalists Pastoralist
% in
co
me
Crops* Off farm work Animal p. Fattening
Income Source as Indicator of Poverty
Per capita income (USD/a day)
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
Farming Herding No offfarm work
Off farmwork
Off farmwork
No offfarm work
Labourers Agriculturalists Pastoralist
El Bab Syria 2007
Average relative importance of different income sources at village level
Agricultural income(on-farm/ownproduction)Off-farm-income(agriultural wagelabour(domestic))
Off-farm-income (non-agriultural wagelabour(domestic))Off-farm-income(abroad wage labour)
Livelihood Typologies and Income Sources
Income source
Specialized crop farmers
Crop farmer with livestock
Crop farmers with off-farm labor
Livestock keeper
Livestock keeper with crops
Pure Laborers
Laborers with crops
Laborers with livestock
% from off-farm activities
3 6 33 3 5 96 63 63
% from crop farming
94 64 59 2 28 7 30 8
% from livestock 3 30 7 95 67 3 4 29
Share in sample 18 % 6 % 14 % 2 % 3 % 35 % 16 % 6 %
Stunting (Height for Age): Example of a non-monetary measure
Stunting
02.3
1
22.8
17.3
12.5
18.9
28.3
12.5
21.0823
12.5
0
5
10
15
20
25
30
35
Irrigated Barley/Livestock Olive/Fruit tree Urban
Boys (under 10) Girls (under 10) Total
ICARDA
Role of Local Institutions: Farmer associations
Two valleys;• Taddarine has paved road which
stimulated development of apple cultivation and allowed traders to come, compete & offer good price for apple.
• Anougal has no paved road, difficult to access, apple not well developed, thus few traders go to buy fruits on trees, and monopolize on apple trade.But Abougal farmers has strong cooperative which enabed to develp profitable dairy cow production and get high income from this activity
• The dairy cooperativehas now 120 members and increased the milk that is marketed through the cooperative from 1800 liters in 1993 to 30,000 liters in 2004
• The overall income of the two communities are now comparable.
• It is not clear why the coperative did not extend its success to apple.
Poverty Outreach of Micro-credit in Jebel Al Hoss
Interest rates of different credit sources
Source of creditAverage annual interest
rate (%)
Formal 5.3
Informal 50.3
Informal (without credits from relatives or friends)
76.6
Sanduq 12 – 18
informal credit sources are more flexible, have no waiting period, do not ask for guarantors and give higher loan amounts than informal
Sources of Agricultural Finance
8
16 17
6
12
3
10
3
17
10
4
3
0
5
10
15
20
25
30
35
40
Crops and trees Livestock Farm equipment Non-agricultural Consumption
% l
oan
sInformal Formal Sanduq
• Sources: 59% informal, 17% formal, 24% Sanduq
• Many rural houseless are investing in their productive assets
• There is potential, but limited by high capital cost
Main Point about Micro-finance
• There is a substantial demand for rural credit, which traditional systems (formal and informal) are unable to meet. More flexible, innovative methods are needed.
• The sanadiq experience has shown that households are investing borrowed funds to build assets, e.g. new agricultural technologies to enhance productivity.
• Wider availability of credit could bring about an agricultural revolution in the dry areas, if properly designed and sustainably managed.
Technology diffusion
Adoption Lag of Modern Wheat Varieties 2007/08
0
10
20
30
40
50
60
70
2005-2006 2006-2007 2007-2008
Sham 1
Sham 3
Sham 5
0
10
20
30
40
50
60
70
80
90
2005-2006 2006-2007 2007-2008
Sham 2
Sham 4
Sham 6
Sham 8
Sham 10
• Older varieties cham3 (1987) and Cham 6 (1991) are the dominant varieties planted by farmers• The newer varieties of cham5 (1994) and cham8 (2000) have low but increasing adoption levels • The most modern varieties of cham7 (2004) and cham10 (2004) are not available to farmers yet
Durum Bread
% area % area
Distribution of Human Poverty in
Sudan (2006)
• Composite index of deprivation in survival (life expectancy), deprivation in knowledge, and deprivation in material well being measured by access to services (UNDP 1997).
• Based on data from two national surveys; The 2000 Multiple Indicators
Clusters Survey (MICS) The 2006 Health Survey (SH).
Sudan’s Average Rainfall Distribution (mm)
0 - 24
25 - 74
75 - 124
125 - 224
225 - 274
275 - 374
375 - 474
475 - 724
725 - 974
975 - 1474
No Dat
Value Chain analysis
Main Idea behind VCA Approach(Andrew W. Shepherd, FAO, 2007)
• Increased role of supermarkets
• Increased coordinated links between farmers, processors, retailers and others.
• Greater income-driven demand for high value products such as meat, dairy products and fruits and vegetables, and healthy foods, medicinal & herbal plants, etc.
• Increased attention on quality and safety
Small holder farmers Large farmers
Traders /intermediariesLocal market/ retailers
ExportersProcessors
Fresh: wholesale, retailers, shops; hotels Supermarkets
Domestic consumers International consumer
Value chain: Conceptual framework
Institutions, policies, government regulations, etc
Canned food
ACTIVITIES
BY
STAGE
&
ACTOR
L
INKAGES&POWER
Value Chain Analysis
• Movement of products through successive stages
• Transactions through the chain actors- producers, traders, processors, retailers, etc.
• Money and information exchanged, and
• Progressive addition of value along the chain
• The ‘rules of the game’ – laws, regulations, policies and other institutional elements
• The support services, which form the environment where all activities take place
Criteria for Selecting Crops:
• Suitability of their production by smallholders,
• Potential for export
• Their potential to contribute to poverty alleviation and
• Their link to IFAD ongoing projects in both countries.
• There is gap in market research
0
100
200
300
400
500
600
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Year
($/t
)
Farm Wsale Retail Export
Source: CAPMAS
Price trends of Pomegranate and Onions
0
50
100
150
200
250
300
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
($/t
)
Farm Wsale Retail Export
Source: CAPMAS
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Year
Pri
ce In
dic
es (
bas
ed o
n 1
996)
Pomegranate Price Onion Price
176
214
9-20
-50
0
50
100
150
200
250
1999-2003 2003-2007
Year
% in
crea
se P
rice
Pomegranate
Onion
Price % increase
1995-1999
1999-2003
2003-2007
Pomegranate 0 176 214Onion 0 -20 9
y = -3.0351x2 + 62.183x - 56.9
R2 = 0.6295
y = -4.8951x2 + 87.769x + 646.82
R2 = 0.1646
0
200
400
600
800
1000
1200
1400
1600
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Years
Qu
an
tity
(0
00
's t
)
Exports Domestic Consumption
Poly. (Exports) Poly. (Domestic Consumption )
Source: CAPMAS
y = 0.2623x2 - 2.7503x + 6.1006
R2 = 0.8026
y = 0.1314x2 - 1.1077x + 25.239
R2 = 0.6905
-5
0
5
10
15
20
25
30
35
40
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Qu
an
tity
(0
00
's t
)
Domestic Consumption Exports
Poly. (Exports) Poly. (Domestic Consumption)
Domestic Consumption and Export Trends of Onion and Pomegranate in Egypt
1.5
2
2.5
3
3.5
4
4.5
2002 2003 2004 2005 2006
Years
Are
a (
10
00
fe
dd
an
)
15
17
19
21
23
25
27
29
31
33
Pro
du
cti
on
(1
00
0 t
on
)
Total Area (1000 Fed)
Production ('000 t)
Poly. (Production ('000 t))
Poly. (Total Area (1000 Fed))
Pomegranate / Onion Cultivated Area and Production
Pomegranate
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
6.5
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
Are
a (
10
00
fe
dd
an
)
Area Poly. (Area)
Onion
1.5
21.5
41.5
61.5
81.5
101.5
121.5
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
Are
a (
10
00
fe
dd
an
)
Area Poly. (Area)
1.5
2
2.5
3
3.5
4
4.5
2002 2003 2004 2005 2006
Years
Are
a (
10
00
fe
dd
an
)
15
17
19
21
23
25
27
29
31
33
Pro
du
cti
on
(1
00
0 t
on
)
Total Area (1000 Fed)
Production ('000 t)
Poly. (Production ('000 t))
Poly. (Total Area (1000 Fed))
Pomegranate / Onion Cultivated Area and Production
Pomegranate
0
5
10
15
20
25
30
35
40
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
Are
a (
10
00
fe
dd
an
)
Production Poly. (Production)
Onion
0
200
400
600
800
1000
1200
1400
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
Are
a (
10
00
fe
dd
an
)
Production Poly. (Production )
Pomegranate Area and Production in Assiut Governorate
Pomegranate Area and Production in Assiut Governorate
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2002 2003 2004 2005 2006
To
tal
Are
a (
10
00
Fe
d)
Source: MALR.See Table (12): Pomegranate Area and Production in Assiut Governorate
Importance of Exports for Pomegranate and
OnionPomegranate:• Export share of production was stagnant or in
decline in the 1990s, but sharply increased since 2003, reaching 20% in 2006
• Export growth is result of to strong export demand for pomegranate; this will continue given the growing consumer awareness.
• Egypt can increase its market shares in the markets where it has competitive advantage
Onions:• Exports has declined in the 90s, but recovered later
& peaked in 2003 reaching over 45% of production, then dropped in the following year, then again recovered in 2006 at 27%.
• It appears the domestic demand is becoming stronger contributor to onion growth in Egypt.
Pomegranate
54 4
3 3
12
1
6
1716
20
0
5
10
15
20
25
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Ex
po
rt s
ah
re o
f p
rod
uc
tio
n (
%)
Export
Onion
2326 27
12
19
26
39
47
37
23
27
0
5
10
15
20
25
30
35
40
45
50
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Years
Ex
po
rt s
ah
re o
f p
rod
uc
tio
n (
%) Export
Importance of the Main Onion Market for Egyptian Exports
• The Egyptian exports is not diversified enough.
• It relies on one major market-Saudi Arabia
• More effort is needed to diversify exports
Onion
1.7
1.8
2.7
3.2
3.6
4.6
15.1
67.3
0 10 20 30 40 50 60 70 80
Romania
Germany
Netherlands
Italy
Greece
Great Britain
Russian Federation
Saudi Arabia
Quantities (%)
Shares of Exports and Values of Main Onion Market
Importance of the Main Onion Market for Egyptian Exports
MarketsQuantities in
% Price $/TExport
values in %
Saudi Arabia 67.3 129.9 50.4
Russian Federation 15.1 151.5 13.2
Great Britain 4.6 419.9 11.2
Greece 3.6 232.1 4.8
Italy 3.2 120.9 2.2
Netherlands 2.7 475.1 7.5
Germany 1.8 648.2 6.9
Romania 1.7 394.6 3.9
Total 100 173.4 100
Exporters Estimate of the Shares of their Onion Exports to Different Markets 2008
Survey
• The reported increase of share of exports to Eastern Europe could be a reflection of new market for Egypt or only specific to the sample of exporters surveyed
Onion 65
25
10
0
10
20
30
40
50
60
70
Eastern Europe Arab Markets Austria
Qu
na
tity
(%
)
• Egypt dominates the markets of Lebanon, Saudi Arabia and Greece (holding 40-70% market share).
• Has modest share in Jordan and Romanian (13%-below 20%)
• Egypt has increased its market shares in Saudi Arabia, Russia, the Netherlands, UK and, Germany, but decreased its share in the Lebanon market.
Onion Average 1996-2006
0.24
0.64
1.9
2.37
3.56
4.55
12.77
18.87
38.74
52.16
71.87
0 10 20 30 40 50 60 70 80
Belgium
Germany
England
Netherlands
Russia
Italy
Romania
Jordan
Greece
Saudi Arabia
Lebanon
share (%)Onion 1996,2006
54
60
30
13
0.3
2
2.5
0.5
0.1
0.1
0.02
32
17
14
9
6
4
4
3
3
0.3
35
0 10 20 30 40 50 60 70
Lebanon
Saudi Arabia
Greece
Romania
Netherlands
Jordan
Italy
England
Russia
Germany
Belgium
share (%)
1996
2006
Egypt’s Market Share of Onion Export
Markets
Egypt’s Market Shares of Pomegranate Export Markets• Egypt has respectable share of the Saudi market (22%)
• Has modest share in the Lithuanian market
• Egypt’s market shares in all these market has rapidly grown recently,
• The highest growth was in Russia, Lithuania, and the Netherlands markets.
Pomegranate Average 2002-2006
1.302
1.3128
10.828
21.934
0 5 10 15 20 25
Netherlands
Russia
Lithuania
Saudi
share (%)Pomegranate
1996,2006
13.99
0.07
0.003
0.43
19.9
18.01
3.98
2.86
0 5 10 15 20 25
Saudi
Lithuania
Russia
Netherlands
share (%)
2002 2006
Export Markets for Pomegranate
Export markets Sales quantity Average price
(%) (LE/T)
Eastern Europe 70 9 000
Rest of Europe 10 7 800
Arab Markets 20 6 000
All 100 8 280
Competitiveness of Egypt in Onion export markets
ranked Egypt’s market shareRank Market Stronger competitors Weaker competitors
1 Saudi Arabia Turkey Yemen, India, Turkey and Lebanon
2 Greece Turkey Germany, India and the Netherlands
3 Romanian France, the Netherlands, Austria and Germany
4 Italy None Poland, Turkey, the Netherlands and Austria
5 Russia None Netherlands, China, Kazakhstan and Tajikistan
6 The Netherlands Zealand, Poland and Belgium
Spain
7 UK none Netherlands, Spain and New Zealand
8 German Spain, Netherlands, New Zealand and Argentina
none
Competitiveness of Egypt in Pomegranate Export Markets Ranked Egypt’s Market Share
Rank Market Stronger competitors Weaker competitors
1 Saudi Arabia Lebanon Yemen, India, and Syria
2 Lithuania Spain, Netherlands and Turkey
3 Russia Azerbaijan, Uzbekistan, Iran, Tajikistan, Spain, and
Turkey
4 The Netherlands
Spain and Belgium France and Malaysia
Pomegranate
59.9
26.4
10
3.7
0
10
20
30
40
50
60
70
WholesaleMarkets
Exporters Wholesalers Local traders
Buyer
Pe
rce
nt
Sa
les
(%
)
Farmers Market Channels of Pomegranate
1304 LE/t
2691 LE/t
1308 LE/t957 LE/t
Exporters’ Procurement of Pomegranate
• Over halve of the surveys farmers sell through agreed contracts
• But sell only 18% through contracts mainly to exporters due to stringent standards
• farmers’ complains about their relationship with traders including:
delayed payments, high rates of rejected
products due to poor quality, and
traders’ occasional noncompliance with agreements
Pomegranate
40
10
50
0
10
20
30
40
50
60
Advanced Contractswith farmers
Farm (at time of need) Middlemen
Sa
les
qu
an
tity
(%
)
2099 LE/t
2691 LE/t
2350 LE/t
Onion
65
20
5 5 5
0
10
20
30
40
50
60
70
Wholesaler -farm
WholesaleMarket
Kelala totraders*
Retailer (atfarm gate)
Factory(Processor)
Sa
he
s o
f S
ale
s (
%)
1000 LE/t
1100 LE/t
700 LE/t1050 LE/t 1250 LE/t
Farmers Market Channels: The case of Onions in Egypt• Farmers marketing channel of choice
is farm gate sales to wholesalers and other traders
• Second most common channel is sales at the wholesale market with LE100/t higher price
• Sales to traders of the crop in-field (kelala) is less important (5%) but with lowest price practiced by farmers who are in dire need of cash.
• Sales to processors is low but gives the highest prices
• Greater linkage of farmers to market points with highest prices is the goal of value chain analysis
Importance for Rural Employment
CommodityShare of
operational expenditure (%)
Gender & labor
Source of labor (%)
Inputs Labor Male Female Family Hired
Pomegranate
51 49 97 3 2 98
Market Infrastructure
• Egypt has reasonably good road and rail network,
• But there is still general poor marketing infrastructure in Upper Egypt
• Airport cooling facilities at local airports and improvements in Safaga port could enhance access of Upper Egypt products to international markets.
• Upper Egypt has particular advantage in climate, water resource and relatively cheep labor that gives a competitive advantage to produce and export these commodities. But this advantage can be severely eroded by poor marketing infrastructure.
Product Quality
• Pesticide residuals were found to be the most important factor for rejecting pomegranate shipments.
• About 80% of the surveyed farmers consider it as the most important constraint to export.
• This study shows that in both onion and pomegranate, farmers do not practice rational use of pesticides and chemical fertilizers, and they are not fully aware of the relationship between product quality and farming practices.
• Adopting good practices is complicated by the fact that different markets have different standards and what is not sold in one market may be sold in another market, albeit at lower prices
Pomegranate prices:
High quality 1700 LE/t
Low quality 1070 LE/t
Quality of Agro-chemicals
• An important factor affecting farmers’ use of inputs is related to the availability of inputs when needed and the quality of inputs.
• The surveyed farmers complained about both quality of chemicals provided by traders and their availability in the quantity needed.
• The findings point out that input supply is not any more only about increasing production but, even more importantly, it is also about producing a product with right characteristics that is demanded by the market.
Post Harvest Management
• A number of malpractices or lack of information and awareness in post harvest handling of the products are identified. For example,
Fruit picking is done by twisting and sometimes strongly pulling, without any tools. This could damage the fruits as well as the trees.
Unsuitable packing of piling approximately 85 fruits in a container compressing over each other; causing mechanical damages such as cuts, bruises and pressure damage.
Similarly, farmers practice less efficient curing of onions.
• These practices lead to losses that can be avoided by following specific and simple post-harvest management procedures including:
proper harvesting,
shading and
cooling products after harvest,
sorting
packing practices, and
curing practices in the case of onions.
Production Practices
• Provide incentives for drip irrigation
• Adopt more rational and optimal use of agrochemicals (fertilizers and pesticides)
• Improve tree management: through proper pruning and tree canopy development;
• Improve harvesting practices: Improved and careful harvesting practices reducing fruit damage should be encouraged to avoid the induction of any physical damage.
Post Harvesting
• Improve on-farm sorting and grading: on-farm sorting practices need to be introduced to avoid small sized fruits which will not comply with EU standards.
• Introduce improving curing of onions: Curing of onion for 15 days which gave the best results should be introduced to farmers.
Marketing
• Support smallholder farmer associationsThe performance of such associations should be monitored and assistance should be given by a third party, like capable NGO, until they are able to function autonomously.
• Increase competitiveness through improved quality standards: The potential for Egyptian pomegranate in the EU market should be explored. The impediments to export can be classified as:
1) lack of information,
2) lack of technical support services and
3) lack of knowledge on preparation and handling the export produce.
Market Infrastructure
Egypt should review the status of the major market infrastructure such as ports (particularly the Safaga port), airports and the cooling facilities needed for the exportation of fresh produce and horticulture
Main Points for Discussion
• Poverty measurements and monitoring poverty reduction, poverty mapping
• Knowledge transfer systems-agricultural services
• Role of rural institutions –farmers’ associations
• Finance- micro finance
• Marketing issues:
Infrastructure
Product quality standards
Chemical residues
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