Market of Fresh Fruits and Vegetables
1
Purpose of the Module
- To create awareness and understanding among
National Governments/focal points as well as
producers in countries on Global and ASEAN Markets
on FFV
2
Outcome of the Module
Participants will understand:
- What is the main production of FFV in the
region
- What is the pre-harvest factors influencing
market of FFV
- How to link production and market
- What is the major challenges for FFV market
in the region
3
Overview of the Module
- Contribution of FFV to Human Health
- ASEAN Production of FFV
- Pre-harvest factors for market
- International Trade of FFV
- Production and Market Linkage
- Developments of ASEAN GAP
4
The contribution of Fresh Produce to Human
Health
-Fruits and vegetables are important sources of
essential minerals and vitamins in the human diet.
-Vegetables are essential for the control of
chemical reactions in the body.
-Fruits and vegetables, and to a lesser extent root
crops, are important sources of vitamin C and other
essentials.
5
Production
Fruits
-ASEAN has always been recognized as the centre of
origin for a number of cultivated tropical fruit trees
-The major fruits produced in ASEAN are:
Banana:
Philippines, Indonesia, Thailand and
Vietnam
Mango:
Indonesia, Thailand and Philippines
Pineapple:
Thailand, Vietnam and Indonesia
6
Vegetables
-Over fifty different vegetables species are
commercially grown and traded in the ASEAN region.
-Eleven major vegetables with respect to their
share in total vegetable area are :
Chili pepper, Tomato ,Yardlong bean,
Cabbage, Shallot, Cucumber, Eggplant,
Kangkong, Bulb onion, Chinese cabbage,
Bamboo shoots
7
Pre-harvest factors in produce marketing
1. Pre-harvest influences post harvest performance
-The overall quality and condition of fresh produce
cannot be improved after harvest.
-The final potential market value of produce depends on
producer’s decisions on what and when to plant and on the
subsequent cultivating and harvesting practices.
-if they want to improve the post harvest performance of
produce they may need to refer to the Good Agricultural
Practices (GAP) Scheme.
8
2. Market factors for the produce
-potential purchasers for the produce:
neighbors, townspeople, retailers, jobbers or
middlemen, commission agents?
-quality requirements of the buyer: size shape,
maturity, appearance, perishability of the produce;
-pricing limitations of the buyer
9
3. Influences of production practices
Water supply (irrigation).
-Growing plants need a continuous water supply
for both photosynthesis (the process by which plants
convert light to chemical energy and produce
carbohydrates from carbon dioxide and water) and
transpiration (the giving off by a plant of vapor
containing waste products)
10
Soil fertility and Fertilizers
ขLack of plant nutrients in soil can seriously
affect the quality of fresh produce at harvest.
Cultivation practices
-GAP is important in achieving good yields and
quality of fresh produce
Agricultural chemicals
-There are of two types:
-pesticides and herbicides
-growth-regulating chemicals
11
4. When is fresh produce ready to harvest?
-Normally any type of fresh produce is ready for
harvest when it has developed to the ideal condition for
consumption.
how is harvest maturity identified
- Most growers decide on when to harvest by
looking and sampling.
-Sight: colour, size and shape
-Touch: texture, hardness or softness
-Smell: odour or aroma
-Taste: sweetness, sourness or bitterness
-Resonance: sound when tapped
12
Trade
1. International trade on fresh fruits
-The EU is the leading destination as well as
source of supply in the global fruit and vegetable trade.
-International trade is dominated by temperate
varieties of fruit, that are most heavily consumed in
the large markets such as Europe and the United States
13
-The largest exporters of fresh fruit are Spain,
the United States, Italy, the Netherland, France and
Ecuador, which together account for 54% of sales by
value
-The principal varieties of fruit sold and
consumed throughout the world are oranges, apples,
grapes, bananas, peaches, pears and pineapples.
-Of these, bananas, pears and pineapples are
predominantly consumed in their natural state,
oranges and apples as juice, while most grape
production is transformed into wine or juice, and
peaches into nectar or canned fruit in syrup.
14
-there has been an increase in recent years of
imports of so-called exotic fruit, typically from tropical
climates, such as guavas, mangos, papayas and
kiwifruit.
-According to the FAO international
consumption of tropical fruits should increase by
around 40% between 1995 and 2005, equivalent to an
annual growth rate of 3.5%.
15
-Demand for fresh fruits is concentrated in
Europe and the United States, which absorb around
60% and 11% respectively of international imports.
-The European and US markets are extremely
dynamic, and are notable as major producers and
exporters of fresh fruits.
16
2. International Trade on Fresh Vegetables
-United States has had a major role as both an
importer and exporter.
-The world’s leading exporters of fresh vegetables in
2002 included Mexico ($2 billion), the United States ($1.38
billion), the European Union (EU) ($1.35 billion), China
($742 million), and Canada ($553 million)
-The top 5 fresh vegetable import markets in the
world include the United States, EU, Canada, Japan, and
China.
17
-the EU vegetable market is tightening while the
U.S. market is opening
- The largest single item is tomatoes, which
account for 17 percent of the total.
-The category of beans, peas, and lentils
accounts for another 14 percent.
-Other relatively major commodities in the fresh
vegetable trade include onions, potatoes, asparagus,
mushrooms, and various types of sweet and pungent
peppers.
18
Linking Production and Marketing of Fruits and
Vegetables for Better Farm Incomes
-There are two fundamental routes by which farmers
can increase their incomes from the marketing of fruit and
vegetables.
-With the demand route, there are a number
of options:
• Directly linking with the end buyer
• Better use of better market information
• Fixing incomes by contracting
-With the supply route the basic option is to
establish better economies along the supply chain
19
Demand Oriented Options
-The most efficient way for farmers to learn the
requirements of the markets is to engage themselves in
the value chain.
-A massive percentage of all fresh produce is
now sold by the major supermarket chains.
20
-Supermarkets have increasingly integrated
their operations involving many aspects of the post
farm gate operations.
-There are increased standards of technical,
environmental and social requirements.
-This is particularly true for horticultural
produce.
21
-In simple terms a value chain is a series of
participants along the entire marketing spectrum who
collaborate to satisfy market demands for specific products
or services to their joint and collective mutual benefit.
-The advantages of being a participant in a value
chain are:
• Reduction in the cost of doing business
• Increase in the bargaining power
• Improved access to advanced technology,
information and capital
• Continual exposure to innovation creates its own
momentum
22
2. Contract Farming
-Contracts are an important mechanism to
coordinate production, distribution, and retail
arrangements between different actors in the value-chain.
-Contracts will typically specify various details
regarding:
• Terms of trade such as prices, quantities, delivery
dates, and payment terms
• Input provision
• Production specifications such as specific
production practice
23
-the prerequisites for successful contract farming
include:
• Appropriate government policies in land, price,
credit and exports
• An appropriate dispute settlement mechanism
• Production capabilities, such as suitable soil and
water resources
• Crop characteristics
3. Market Information
-Growers can improve their returns by making
better use of market information. There are two aspects to
this:
24
Supply Oriented Options
The principle supply oriented option for fruit
and vegetable producers to increase their income is
through supply chain management.
Supply Chain Management
-Supply chain management refers to the process
whereby the movement of a product(s) from the initial
supplier to the penultimate user occurs with all nonvalue adding expenses removed
25
Economic Performance of Sectors along Food
Supply Chain
-The sectors belonging to the food supply chain
– agriculture, the food processing industry and the
food wholesale and retail distribution sectors –are
economically important and have many interactions
with other sectors of the economy, either as purchasers
or as suppliers of intermediate inputs.
-the performance of these sectors (in terms of
productivity, price, quality, variety etc.) has immediate
repercussions elsewhere and in particular for final
consumers.
26
AEC and ASEAN GAP
1. Project Origin
-A project on Quality Assurance Systems for
ASEAN Fruit and Vegetables or ASEAN GAP was
prepared by a joint ASEC/AusAID design team in
October 2002.
27
-The project responds to the ASEAN plan to
achieve an ASEAN Community by the year 2020
(ASEAN decided to speed up AC five years earlier-2015)
which would rest on the three pillars of “ASEAN
Security Community”, “ASEAN Economic Community”
and “ASEAN Socio-cultural Community” embodied in
the Declaration of ASEAN Concord II (Bali Concord
II).
-The development of harmonized agricultural
standards is fundamental to achieving this goal.
28
2. Regional Development Challenge to be Addressed
2.1. Enhanced Rural Income and Food Security
-ASEAN witnesses the gap existing among members
in particular, CLMV whereas per capita GDP is still below
1,000 USD
-The production of high value horticultural crops is
a key contributor to rural incomes and has been recognized
as an enterprise appropriate to smallholders
29
-Trade in fresh horticultural produce in ASEAN
is significant as the figures have shown that just over a
decade trade of fruits and vegetables is growing almost
three times
-The production and marketing of fruit and
vegetables provides a means of bringing smallholders
into the mainstream of export-oriented enterprises,
provided they are appropriately guided by QA systems.
30
2.2. Need for appropriate technological
innovations in the region
-ASEAN is faced with the challenge of developing or
sourcing and applying appropriate technological
innovations in its bid to achieve competitiveness in
horticultural enterprises.
-The scale and nature of horticulture production
and marketing gives rise to technological needs peculiar to
this sector.
-Along with other small and medium enterprises
(SMEs) in ASEAN, the markets for their products cannot be
sustained because of their inability to meet quality, safety
and phytosanitary requirements.
31
2.3. Ensuring that human resources contribute
to regional development and shared prosperity
-Regional cooperation aimed at further enhancing
the image of ASEAN as a reliable supplier of qualityassured fruit and vegetables needs to accommodate the
specific requirements of CLMV, while addressing
remaining strategic needs among the more experienced
ASEAN member countries.
-ASEAN has been increasingly confronted by the
need to ensure that the formulation of international
standards and guidelines for these commodities gives
adequate consideration to the unique features and needs of
production and marketing systems in ASEAN.
32
Previous and Ongoing Initiatives
1. ASEAN Context
ASEAN agreed to implement the following
initiatives within the Hanoi Plan of Action (HPA):
-Enhance marketability of ASEAN food and
agriculture products through the development,
harmonization and adoption of quality standards and
regulations for food and agriculture products
-Development of QA systems supports the ASEAN
Free Trade Area (AFTA) vision of easy movement of goods
across boundaries within the region.
33
2. Multi layer QA system
The standards should be divided into three
distinct sections suitable for introduction as desired by
the member countries,
-Awareness program, designed to introduce the
concept of QA, food safety and general product quality
issues on a generic basis.
34
-Generic ASEAN-GAPs based on through chain
food safety requirements with reference to
environment and socio- economic issues suitable for
the ASEAN countries, climate, farming methods and
social fabric.
-ASEAN-GAPs based QA system with third
party auditing system.
The ASEAN GAPs will carry more importance
than individual country GAPs on the international
trade area
35
Generic ASEAN Good Agricultural Practice (GAP)
Quality Assurance (QA) standard (ASEAN GAP)
developed for all member countries
It is important for ASEAN countries to harmonize
standards and a generic ASEAN GAP will assist this in a
number of ways:
Firstly, it will assist with the development of a
harmonized standard across the ASEAN member countries.
Secondly, it will give the ASEAN standard a level of
importance compared to individual country standards.
Thirdly, it will assist by providing common material
in training and delivery of the standards.
36