Aga Khan Rural Support Programme
Apple Value Chain Study and Action Plan
Gilgit-Baltistan and Chitral
March 2013
Table of Content
1
CHAPTER ONE: INTRODUCTION ................................................................................................................... 10
1.1
1.2
1.3
1.4
2
BACKGROUND..................................................................................................................................................10
OBJECTIVE OF THE STUDY ...................................................................................................................................10
METHODOLOGY ...............................................................................................................................................11
STUDY AREA ....................................................................................................................................................12
CHAPTER TWO: GENERAL OVERVIEW OF THE SUBSECTOR .......................................................................... 13
2.1
INTRODUCTION ................................................................................................................................................13
2.1.1 Constituents ...........................................................................................................................................15
2.2
APPLE PRODUCTION..........................................................................................................................................16
2.2.1 Apple Production in Pakistan .................................................................................................................16
2.2.2 Apple Production in GBC ........................................................................................................................17
2.2.3 Crop Mix and Apple Situation ................................................................................................................19
2.2.4 Land Usage for Horticulture Crops .........................................................................................................21
2.2.5 Fruit Harvest Calendar ...........................................................................................................................22
2.2.6 Suitability of promoting apple VC in the context of youth employability ..............................................23
3
CHAPTER THREE: VALUE CHAIN OPERATORS, FACILITATORS AND ENABLERS .............................................. 24
3.1
VALUE CHAIN OPERATORS AND THEIR FUNCTIONS ..................................................................................................24
3.1.1 Input Suppliers .......................................................................................................................................25
3.1.2 Producers ...............................................................................................................................................26
3.1.3 Storage operators (on-farm and off-farm) ............................................................................................27
3.1.4 Processors ..............................................................................................................................................28
3.1.5 Middlemen (Intermediaries/Transporters/Local Traders ......................................................................29
3.1.6 Traders at the Auction Yards..................................................................................................................31
3.1.7 Vegetable Vendors/Retailers. ................................................................................................................31
3.1.8 Transporters ...........................................................................................................................................33
3.2
VALUE CHAIN FACILITATION ...............................................................................................................................33
3.3
ENABLING ENVIRONMENT ..................................................................................................................................34
4
CHAPTER FOUR: VALUE CHAIN ANALYSIS .................................................................................................... 36
4.1
INTRODUCTION TO VALUE CHAIN ANALYSIS ...........................................................................................................36
4.2
MARKET ANALYSIS............................................................................................................................................37
4.2.1 Market Share and Production Potentials ...............................................................................................37
4.2.2 Price dynamics .......................................................................................................................................38
4.2.3 Production costs .....................................................................................................................................39
4.2.4 Distribution of Value Addition................................................................................................................40
2
4.2.5 Competitiveness .....................................................................................................................................41
4.3
SWAT ANALYSIS ..............................................................................................................................................44
4.4
EFFICIENCY ANALYSIS ........................................................................................................................................45
4.5
CONSTRAINTS ..................................................................................................................................................48
4.5.1 Constraints related to Marketing...........................................................................................................48
4.5.2 Constrains related to Production ...........................................................................................................49
4.5.3 Infrastructure Regarding Processing and Marketing .............................................................................51
5
CHAPTER FIVE: VALUE CHAIN PROMOTION ................................................................................................. 54
5.1
VISION AND GOAL ............................................................................................................................................54
5.2
YOUTH INCLUSION AS VC OPERATORS ..................................................................................................................55
5.3
RECOMMENDATIONS.........................................................................................................................................58
5.3.1 Formation of Horticulture Value Chain Platform (VCP) and working with partners ..............................58
5.3.2 Shape the Strategy for Apple VC ............................................................................................................58
5.3.3 Entrepreneurship Development Programme .........................................................................................58
5.3.4 Community Based Skill Development Programme .................................................................................59
5.3.5 Support to Input Supplier including Apple Nurseries .............................................................................59
5.4
STRATEGIC GUIDELINES AND PROPOSED ACTION PLAN.............................................................................................60
5.4.1 Strategic Guidelines for formation of Horticulture Value Chain Platform (HVCP) ...............................60
5.4.2 Strategic Guidelines for Shaping Strategy .............................................................................................62
5.4.3 Strategic Guidelines for Entrepreneurship Development Programme ...................................................65
5.4.4 Strategic Guidelines for Community based Skill Development Programme ..........................................67
5.4.5 Strategic Guidelines to Support to Input Supplier including Apple Nurseries ........................................71
CHAPTER SIX: CONCLUSION AND WAY FORWRD ................................................................................................. 73
6
ANEXURES ................................................................................................................................................... 75
6.1
6.2
6.3
6.4
6.5
ANNEXURE – I: CHECK LIST FOR APPLE VALUE CHAIN ANALYSIS .................................................................................75
ANNEXURE – II: CHECK LIST FOR MARKET ASSESSMENTS .........................................................................................76
ANNEX III QUESTIONNAIRE A ............................................................................................................................77
ANNEX IV QUESTIONNAIRE B FOR DETERMINATION OF MARKETING COST OF APPLE .....................................................79
ANNEX IV FOCUS GROUP DISCUSSIONS .....................................................................................................80
3
List of Maps and Figures
Map 1:
Map 2:
Map of Gilgit Baltistan and Chitral
Karakoram High Way
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Production Process and Labour use in Apple VCA
Market Channels of GBC Apple
Apple Value Chain Map
Indicative Map of Apple Flow to Pakistan Markets
Figure 5:
Calculation of Profit to VC operators
Figure 6:
Figure 7:
Figure 8:
Figure 9:
Porter’s Diamond Model of Competiveness
Porter’s Five Forces Model
Shaping a Strategy
Apple flow Chart
List of Charts
Chart 1:
Chart 2:
Chart 3:
Chart 4:
Chart 5:
Chart 8:
Chart 9:
Chart 10:
Apple Production-Pakistan
District wise Apple Production-Gilgit Baltistan and Chitral
Variety wise Apple Production, Consumption and Wastage in Gilgit Baltistan and Chitral
Sale of Apple in District Retail Markets
Sale of Apple Rawalpindi Wholesale Market and District Markets of GBC
Market Share of GBC Apple
The overall situation of efficiencies in the value chain
Graphic Presentation of efficiency level in the Apple value chain of GBC
List of Tables
Table 1:
Table 2:
Table 3:
Table 4:
Table 5:
Table 6:
Table 7:
Table 8:
Table 9:
Table 10:
Table 11:
Horticultural Crops in Gilgit Baltistan and Chitral
District-wise land used to grow major fruits (hectare)
Harvest Calendar for major fruit crops
Value Chain Suitability Criteria for Youth and Context of Youth Employability
Level of Community satisfaction for various inputs
District-wise land used to grow major fruits (hectare)
Market and Storage Facilities in Gilgit-Baltistan
Potential Analysis for value addition in different fruits in GB
Marking Actors in Fresh Fruit
Factor Conditions
Efficiency Level in relation to factors
4
Table 12:
Table 13:
Table 14:
Table 15:
Fresh Apple Market issues
Roads and Communications Facilities
Ranking of Apple Production Issues in Gilgit Baltistan and Chitral
Ranking of Apple Market issues
5
Disclaimer
The views and opinions expressed in this document are those of the author(s) and do not necessarily
reflect those of Aga Khan Rural Support Programme. The information contained in this study has been
derived from sources believed to be reliable. However, no representation or warranty is given in respect
of its accuracy, completeness or reliability. AKRSP does not accept liability for any consequences/loss due
to use of the content of this study.
6
Acknowledgement
The Value Chain Analysis was conducted by Market and Entrepreneurship Development Team of
Gilgit, Baltistan and Chitral Region with technical support of consultant. Although it was drafted by
the consultant, who assumes responsibility for its findings and conclusions, the contributions of
various professionals from AKRSP is acknowledged. Particularly, the intellectual and professional
support of Mr. Muzaffar Uddin, Programme Manager, Market and Entrepreneurship Programme is
appreciable to great extent.
We also thankful to Mr. Noor Khan, Manager Market and Entrepreneurship Development Gilgit
region, Mr. Sajjad Hussain Manager Market and Entrepreneurship Development Chitral Region, Mr.
Mohammad Ali Mutahiri Manager and Market and Entrepreneurship Development Baltistan Region,
Karimullah, Advisor Market Development Core Office, Amjad Wali Coordinator ASF Project, Abdul
Basit and other market development team for their assistance during field surveys RMAs and FGDs.
We are also thankful to all regional team who provided full support in organizing focus group
discussions in their respective regions.
Thanks goes to all producers, value chain agents and traders who provided information and
suggestions related to the apple value chain in . .
We also thankful for the feedback and valuable suggestions of Mr. Nazir Ahmad, RPM-Baltistan, Mr.
Melad Karim RPM Gilgit and Sardar Ayub, RPM Chital, Mr. Mohammad Saleem PM M&E, Mr. Amin
Beg, PM ID.
The AKRSP and LSOs staff who provided support to conduct this study are also worth appreciation
Masood Ahmad
Value Chain Consultant
7
Acronyms
AKF
Aga Khan Foundation
AKRSP
Aga Khan Rural Support Programme
ASF
Agribusiness Support Fund
DOA
Department of Agriculture
FGD
Focus Group Discussion
GB
Gilgit-Baltistan
KKH
Karakoram High Way
KPK
Khyber Pukhton Khawa
Km
Kilometer
KIU
Karakoram International University
LMA
Labour Market Analysis
RMA
Rapid Market Appraisal
FSC&RD
Federal Seed Certification and Registration Department
Gilgit-Baltistan and Chitral
NRM
Natural Resource Management
RMA
Rapid Market Appraisal
VCA
Value Chain Analysis
VC
Value Chain
VCP
Value Chain Platform
HVCP
Horticulture Value Chain Platform
F&V Market
Fruit and Vegetable Market
8
FOREWORD
Agriculture is the main foundation of Gilgit-Baltistan and Chitral economy. It provides the livelihood base
for 54% of total population of GBC. The Apple is among the top most important horticulture sector in GBC
as it provides a livelihood base for a large number of rural households as well as having potential to
become one of the largest sector in terms of revenue to the farmer from selling it in national markets ,
therefore it has been chosen for the study since.
Over the last few years remarkable progress has been made in the field of agriculture development, with
the expansion of road networks, the construction of farm and feeder roads and increased access to
information via cellular phone networks, the farmers are gradually moving from subsistence farming to
commercialization. Areas under cultivation vis-à-vis production of several horticulture products, like
apricot, apple, cherry and grapes have been rapidly growing. Apple is the 2nd most important crop for
farmers, especially for rural households in remote and high altitude areas where it has potential to
become major source of cash income.
This value chain study has been undertaken during August 2012 to February 2013 by Market and
Entrepreneurship Development Section of Aga Khan Rural Support programme with technical assistance
of Value Chain Expert (Independent Consultant) to develop youth centric plan for intervention & upgradation under Enhancing Employability & Leadership for Youth Development (EELY) Programme, funded
by Canadian International Development Agency (CIDA).
The study looked at a full range of activities required to bring a product from producer through
processors/ traders to consumers and suggests measures required for strengthening the value chain
linkages. The main aim of the study was to identify the critical bottlenecks at production, processing and
marketing level that need immediate measures to be addressed to improve overall competitiveness of
the subsector. This study provides a critical overview of the existing production system, product delivery,
trading practices and support services, and presents a descriptive analysis of the market looking at the
production trend, price, demand and supply and comparative advantages of the GBC and suggests
interventions and action plan to remove the constraints to make the value chain functional.
The effort made by the Market Development team of AKRSP in collating and analyzing the information
and bringing out this study in this form is appreciated. The study aIt is hoped that this study will be useful
for development agencies, business development service providers, apple traders and other actors and
supporters in designing and implementing appropriate interventions in the apple subsector.
Muzaffar uddin
Programme Manager
Market and Entrepreneurship Development
Aga Khan Rural Support Programme
9
1 CHAPTER ONE: INTRODUCTION
1.1 Background
Aga Khan Rural Support Programme is Project of Aga Khan Foundation Pakistan and the principal agency
of Aga Khan Development Network (AKDN) for rural and community development. Since its inception in
1982, AKRSP has worked as a catalyst to create and foster community based institutions for participatory
development (institutional development), developed and evolved synergistic strategies for productive
management of natural resources (resource development), and created incentives, multiplier effects and
economies of scale for delivery of development inputs and services (market and entrepreneurship
development). This organizational model of AKRSP includes a catalyst or support organization (itself),
partner organizations of the communities that it serves (Village/Women Organizations), and a
continuously evolving programme of actions (projects and programmes).
This value chain study is undertaken during August, 2012- February 2013 by Market and Entrepreneurship
Development Section of Aga Khan Rural Support programme to develop youth centric plan for
intervention & up-gradation for apple value chain under Enhancing Employability & Leadership for Youth
Development (EELY) Programme funded by Canadian International Development Agency (CIDA) to
address issues of production and income and employment generation. This study looked at a full range of
activities required to bring a product from producer through processors/ traders to consumers and
suggests measures required for strengthening the value chain linkages.
Apple is chosen for the study since it provides a livelihood base for a large number of rural households
and has potential to become one of the largest sector in terms of revenue to the farmer from selling in
national and export market.
1.2 Objective of the study
The objective of the value chain study is developing an action plan for Apple Value Chain by identifying
and prioritizing production, processing and market gaps & opportunities relevant to EELY Programme
(including synergies with other value chains in EELY project)
More specifically, the study looked into the following three broad areas:
Value Chain
• Develop a value chain map and identify the major players in the value chain
• Identify the constrains and opportunities faced by the value chain members
• Identify the competitive advantages/ disadvantages of the subsector players: market
access, technology/ product development, management/organization, input supply
(raw materials), finance, policy and operating environment.
• Identify the Strengths, Weaknesses, Opportunities and Threats (SWOT analysis) of the
subsector
10
Market Conditions
• Identify the present market conditions of the sub-sector: market size, key players,
demand supply gap, pricing trends, imports, exports and distribution networks
• Identify the sector prospects and barriers to growth
Support Services
• Identify and prioritize the business development services needed by the sub sector
• Identify the existing service providers and assess what they are providing to the subsector and their relationship with clients
• Identify further potential service providers and assess their ability and willingness to
provide the needed/missing services
1.3 Methodology
The methodology for the current VC analysis was adopted in line with the objectives set out by the AKRSP
for the study. The analysis covered different level of chain operators, encompassing assessment of the
current production and market situation, identification of constraints and opportunities, assessment of
the support services and service providers and review of the enabling environment including the role of
government institutions.
Primary information
Observation: Data were collected by watching people, production and marketing practices, storage
conditions and other market infrastructures.
Questionnaire: Data were collected by asking questions to the value chain actors (producers/ groups,
middlemen, wholesalers, retailers) and support providers. The different sets of questions and checklists
were prepared for the different group of actors/stakeholders and interviews/interactions held at
following level:
• Apple growers
• Middlemen
• Traders at auction yard
• Retailers/ local vegetable vendors
• Support Service providers/ VC promoters
The information was collected from different areas namely Singal, Ghakuch, Gupis, Chaturkhand, Taus
and Yasin of District Ghizer. In district Gilgit, Danyore, Nomal, Jalalbad. In Hunza-Nagar Districts,
Rahimabad, Hyderabad, Karimabad, Aliabad, Nasirabad, Gulmit, and Astore Town of Astore District was
selected for information collection. In Baltistan region, two FDGs were held, one in each district of Skardu
and Ghanche. To collect market information, RMAs were conducted in Skardu and Khaplu Markets
11
In Chitral region The FGDs were held at four regions of Chitral namely Garumchashma, Karimabad, Booni
and Mastuj regions. Three Focus Group Discussion (FGDs) were held at three different regions of Chitral
1) Garumchashma, 2) Karimabad and 3) Booni region
Review of Secondary Information
The secondary information was collected from project documents, internet data and reports of AKRSP
including Socioeconomic Survey of GBC, AKRSP’s Basic Horticulture Study of JICA, Agriculture Statistics of
Department of Agriculture GB. The full list of publications and websites visited for understanding the apple
value chain in general and marketing systems and support service structures in particular is given at the
end of this report under the heading “References”.
1.4
Study Area
The main geographical focus of the survey was GBC, which includes main apple production areas of 6
districts of GB and Chitral district of KPK. As apple is major horticulture of Balochistan and Swat area of
KPK, secondary information was collected mainly through reading newspaper articles and reports on
internet. Primary and secondary information was collected from Rawalpindi and Lahore Fruit and
Vegetable Market. The map below shows the surveyed areas of GBC.
Figure 1: Map of Gilgit Baltistan and Chitral
12
The programme area of AKRSP is Gilgit-Baltistan and Chitral. The Gilgit-Baltistan (previously known as
northern areas) spreads over an area of 72,496 sq. Km. Out of this area only 1% is cultivated and another
1% is laying cultivable waste. The region is dominated by one of the most mountainous landscapes on
earth, with an arm of the HinduKush to the west, the lesser Himalaya to the south, the Karakoram to the
east and the Pamir to the north. More than half of the Gilgit-Baltistans is located above 4,500 meters.
Climatic conditions vary widely in the Gilgit-Baltistan and Chitral, ranging from the monsoon-influenced
moist temperate zone in the western Himalaya, to the arid and semi-arid cold desert in the northern
Karakoram and Hindu Kush. Temperatures in the valley bottoms vary from extremes of 25°C to 40°C in
summer, less than 0°C to -11 °C in winter while in high elevated valleys the temperature varies 15 °C to
30°C in summer and in winter falls down below 0°C to -17°C. The wide variety of climatic conditions in the
GBC , coupled with the extreme variations in altitude and aspect, has led to an equally wide array of
vegetation and ecological zones1.
The per capita income of the population of GBC as a whole was PKR 29,426 in 2008. The level of income
is still very low with that of the national average GDP per capita, accounting for 49 percent of the national
average2. Furthermore, it appears that there are considerable differences in the per capita incomes
among the districts. The analysis shows that per capita income is much higher in the Gilgit district than
rest of the districts, while the per capita income in the Diamer district is only half of the Gilgit district3.
The average cultivable landholding per household 1.3 acre and is scattered. As a result, from centuries
the farmers’ emphasis has been to secure the food for themselves and their animals from the limited
available land. This has resulted in a highly integrated and intensive farming system. This practice still
continues in majority of the areas and farmers lack the capacity to make any major shift considering it a
risk to their food security. There are, however, some exceptions, as families who own bigger pieces of
land and those who have other stable sources of income, have shifted towards commercial production.
Further analysis within the Horticulture Sector shows that the share of income from fruits is 60% in GBC
followed by potatoes. Apple has 5% share of income in horticulture.
2
CHAPTER TWO: GENERAL OVERVIEW OF THE SUBSECTOR
2.1 Introduction
The apple is the pomaceous fruit of the apple tree, species Malus domestica in the rose family (Rosaceae).
It is one of the most widely cultivated tree fruits. Apples are often eaten raw. The whole fruit, including
1
GBC report WWF
2
SESBG 2008
3
Hudur Valley Baseline Survey 2007 for Diamer district; SESGBC 2008 for the rest of districts
13
the skin, is suitable for human consumption. Apples can be canned or juiced. They are milled to produce
apple cider (non-alcoholic, sweet cider), which is filtered for apple juice4.
The center of diversity of the genus Malus is in eastern Turkey. The apple tree was wild perhaps the
earliest tree to be cultivated, and its fruits have been improved through selection over thousands of
years. Alexander the Great is credited with finding dwarfed apples in Kazakhstan in Asia in 328 BCE those
he brought back to Macedonia might have
been the progenitors of dwarfing root
stocks. Winter apples, picked in late
autumn and stored just above freezing,
Fresh Apples Production by Country in MT
have been an important food in Asia and
Rank Country
Production (MT)
Europe for millennia, as well as in
1 China
38,000,000.00
Argentina and in the United States since
2 EU-27
11,296,960.00
the arrival of Europeans. Apples were
3 United States
4,200,000.00
brought to North America with colonists in
the 17th century, and the first apple
4 Turkey
2,900,000.00
orchard on the North American continent
5 India
1,750,000.00
was
planted
in Boston by
6 Chile
1,310,000.00
Reverend William Blaxton in 1625. The
7 Russian Federation
1,210,000.00
only apples native to North America are
8 Brazil
1,190,000.00
crab apples, which were once called
5
"common apples" .
9 Ukraine
1,050,000.00
10 Argentina
1,030,000.00
There are approximately 7500 apple
http://www.indexmundi.com/agriculture/?commodity=apples
varieties around the world planted in
different climatic conditions. Apple
production ranked at level 17 of total
agricultural production with around 65
million tons in 2011. China is at the highest
rank among apple producing country in world, contributing around 50% (38 million tons in 2011) of world
total apple production. EU 27 is the second biggest producer of apple with production volume of 11.834
million tons and highest export volumes of 1.5 million tons. Whereas China with exports of 1.1 million
tons is second biggest exporter of apple in the world. United States with 4.227 million tons production
and 0.833 million export has third place in the world production and export chart. Russia, Germany and
United Kingdom are top three importers of apple with $667.596 million, $547.175 million and $512.156
million of imports respectively6
4
http://www.indexmundi.com/,
http://www.answers.com/topic/apple#ixzz2NKEJyTGR
5
Ibiid
6
http://www.indexmundi.com/agriculture/?commodity=apples&graph=production
14
The world trend of apple production is increasing, according to the FAO the last year production has
increases by 5% all over the world. The consumption pattern though varies from country to country
ranging from 6 kg to 11 kg per person.
2.1.1 Constituents
Various analyses show that the Apple contains from 80% to 85% of water, about 5%of protein or
nitrogenous material, from 10% to 15% of carbonaceous matter, including starch and sugar, from 1% to
1.5% of acids and salts. The sugar content of a fresh apple varies from 6% to 10% , according to the variety.
In spite of the large proportion of water, the fresh Apple is rich in vitamins, and is classed among the most
valuable of the anti-scorbutic fruits for relieving scurvy. All apples contain a varying amount of the organic
acids, Malic acid and Gallic acid, and an abundance of salts of both potash and soda, as well as salts of
lime, magnesium, and iron7.
It has been calculated that in 100 grams of dried apples, there are contained 1.7 milligrams of iron in
sweet varieties and 2.1 milligrams in sour varieties. It has also been proved by analysis that the Apple
contains a larger quantity of phosphates than any other vegetable or fruit8.
The valuable acids and salt of the Apple exist to a special degree in and just below the skin, so that, to get
the full value of an apple, it should be eaten unpeeled9.
The bark of the Apple-tree which is bitter, especially the root-bark, contains a principle called Phloridzin,
and a yellow colouring matter, Quercetin, both extracted by boiling water. The seeds give Amygdaline and
an edible oil. Apple oil is Amyl Valerate or Amylvaleric Ester. An alcoholic solution has been used as a
flavouring liquid, called Apple Essence10.
7
http://www.answers.com/topic/apple#ixzz2NKEJyTGR
ibid
9
ibid
10
ibid
8
15
2.2 Apple Production
2.2.1
Apple Production in Pakistan
Apple production is Pakistan is 598,804 tones and the total area of apple orchards is 110,411 hectares11.
Balochistan has the largest share in total apple production of Pakistan with production of 360,000 tones
over an area of 101,900 hectares, followed by KPK with production of 127,900 tones over an area of 9,200
hectares. In addition to the local production, Pakistan imports apple from Iran and sometimes from China
and other countries. The volume of imports varies as per local demand due to variation in local
production. In 2011 Pakistan imported around 16,282 tons apple worth $ 3,778,104 in addition to the
unrecorded import from Iran, estimated to be around 28,000 tons. With an estimated 6 kg per capita
consumption per year, the total requirement of Pakistan is 1,080,000 tones12. It can be estimated that
Pakistan has more 50% shortfall of (around 500,000) tons apple per year. The chart below shows the
percent production of each province of Pakistan
Chart 1: Apple Production-Pakistan
11
FASTAT.com
12
Source: http://www.indexmundi.com/agriculture/?commodity=apples&graph=production
16
2.2.2
Apple Production in GBC
The GB produces around 3% of total production of Pakistan with a production figure of 21,459tons.13 This
including Chitral’s production of marketable varieties (estimated to be 380 tons14). In total apple
production of GBC, Skardu has major share of 27% and Hunza Nagar is second with 23% in share in total
production. Astore with 6% of total apple production is at the last rank in production table. The chart
below indicates the production percentages of all districts of GBC.
Chart 2: District wise Apple Production-Gilgit Baltistan and Chitral
Skardu despite of having major share in production, has market share less than Hunza Nagar due to lack
of marketable varieties.
Production of apple through commercial scale orchard is rare practice in GBC; the production of apple
traditionally is done by planting apple trees in scattered manner in all three agro-climatic zones of GBC;
double cropping, marginal double cropping and single cropping zones. The FGDs conducted during survey
revealed that it is the most widely cultivated commercial fruit crop besides apricot. It creates seasonal
employment opportunities in harvest, packing, grading and transportation. Depending on the variety, the
income is comparatively higher than other competing fruits. There exists potential for value addition both
in fresh farm (grading and good packaging) and in processing of apples. Apple because of its low
13
The Agribusiness Project’s Participatory Rapid Horticulture Appraisal Report, GB August 2012
14
AKRSP RMA 2012
17
perishability has been part of local food security system during food deficient months. Apple however is
prone to a number of pests and diseases and therefore needs intensive pest management; although, due
to climatic extremes, the pest cycles are fewer than other apple growing regions in Pakistan, which
substantially reduces the crop management costs and the health and environmental risks related to use
of pesticides.
In GBC , the major production areas in Gilgit are Hunza Nagar, Skardu, Khabpulu, Shigar and some parts
of Ghizer Districts. The production areas of Chitral are Garumchashma, Karimabad, Booni and Mastuj.
Chart 3: Variety wise Apple Production, Consumption and Wastage in Gilgit Baltistan and Chitral
Variety-Wise Apple Production, Consumption
and Wastage in GBC
8000
7000
6000
5000
4000
Tons
3000
2000
1000
0
Golden
Delicious
Dark Red,
Starking
Red delicious
Other
Local
Marketable consumption
Mix Varieties
Wastage
The variety wise production of GB was; Golden Delicious 954 tons, Dark Red, Starking 1,179 tons, Red
Delicious tons 365 tons. Remaining production was of traditional marketable mix varieties of
Ghoharaman, Basooti, Shinee Balt, Kachura apple and Saspalu, Kachura Ambaree, Suspolo, Shakka,
Kosho, Nus kosho, Ambaree Kosho,, Samarqand, Aona Kosho, Bong Kosho,. Skurmo Kosho
The production in Chitral was Royal Gala 125, Kalakola 85 Khurduzhi/Chopush 140 Golden 30 tons. Apart
from the production mentioned above other varieties of apples are also produced in Chitral but not in
large scale e.g. Red chief, silver spur and Basoti.
18
The quality in terms taste and appearance, Royal Royal Gala and Kalakola varieties are considered to be
the good quality apples due to its cosmetic look, aromatic smell, high shelve life, firmness and uniform
size. However, Khurduzhi/Chopush is produced in abundant but this variety is very perishable and could
not be stored, therefore, it is sold at low price as compared to other varieties. Farmers usually try to sell
the khurduzi variety as quickly as possible without taking time in bargaining with the trader. The Golden
variety ripens in late October season and is considered to be the best one in terms of storage and off
season sale.
2.2.3 Crop Mix and Apple Situation
The main fruits grown in GBC include but are not limited to grapes, apples, apricots, peaches, plums,
pears, cherries, mulberries, walnuts, figs, pomegranate and persimmons. Major vegetables grown in the
region include potato, tomato, onion, carrots, turnip, spinach, Chinese cabbage, bell pepper, peas and
cabbage15.
Over the years fruit and vegetable in GBC has emerged as one of the potential sectors in accelerating the
growth of rural economy. Its role in the area’s nutritional security, poverty alleviation and employment
generation has become increasingly important. It offers not only a wide range of options to the farmers
for crop diversification but also provides ample future income and employment opportunities through
the establishment of fruit and vegetable processing industries. It has therefore always been a need to sift
more towards horticultural crops due to its high per unit area income. If done in an organized way Gilgit
Baltistan has the prospects of becoming one of the major fruit and vegetable baskets of Pakistan owing
to its highly conducive climatic conditions, water resource availability, efficient farming community,
increasing market demand and access.
The following table made on the basis of the agriculture survey and the FGDs shows the district- wise fruit
and vegetable mix and the list of the prominent fruits and vegetables grown in all the seven districts of
Gilgit-Baltistan16.
Table 1: Horticultural Crops in Gilgit Baltistan and Chitral
Horticultural crops (in terms of economic value)
District
Prominent
Fruits
Gilgit
1. Apricot
2. Walnut
3. Pomegranate
15
The Basic Horticulture Study –AKRSP for JICA
16
ibid
%
Contribution
20
18
Prominent
Vegetables
1. Potato
2. Tomato
3. Cabbage
%
Contribution
68
14
19
Horticultural crops (in terms of economic value)
District
Prominent
Fruits
4. Apple
Hunza/Nagar
1.
2.
3.
4.
Apricot
Apple
Walnut
Cherry
Ghizer
1.
2.
3.
4.
Apricot
Almond
Walnut
Apple
1. Apricot
2. Walnut
3. Apple
4. Cherry
1. Walnut
Diamer
2. Apple
3. Pomegranate
4. Grapes
1. Apricot
Skardu
2. Apple
3. Walnut
4. Cherry
1. Apricot
Ghanche
2. Apple
3. Walnut
4. Almond
Source: Basic Horticulture Study-GB
Astore
%
Contribution
Prominent
Vegetables
12
10
43
17
15
10
48
15
10
10
4. Onion
33
32
17
6
45
11
9
8
70
14
4
3
78
9
7
3
%
Contribution
1.
2.
3.
4.
Potato
Tomato
Onion
Cabbage
1.
2.
3.
4.
Potato
Onion
Tomato
Peas
6
6
97
1
0.6
0.6
88
6
3
1
1.
2.
3.
4.
1.
2.
3.
4.
1.
2.
3.
4.
1.
2.
3.
4.
Potato
Onion
Tomato
Cabbage
Peas
Potato
Capsicum
Onion
Potato
Onion
Tomato
Peas
Potato
Onion
Peas
Cabbage
93
4
1
1
50
12
11
9
91
5
2
1
91
6
2
1
20
2.2.4 Land Usage for Horticulture Crops
At present, approximately 20,000 hectare of land is occupied by fruit plants and around 10,000 hectare
of land is used for vegetables production in Gilgit Baltistan. It is difficult to relate this figure with over all
cultivated land because fruits and vegetables are intercropped and also two crops are grown on same
land in one year’s cycle and hence it is double counted. Nevertheless, the figures given below demonstrate
a good comparison between the crops and between districts for each crop.
Table 2-District-wise land used to grow major fruits (hectare)
District
Apricot
Apple
Grapes Pears Peaches
Total
12,862
3,682
1,145
393
516
Gilgit
1,194
256
311
43
120
Hunza/Nagar
1,788
715
77
108
92
Ghizer
1,462
513
328
65
84
Astore
557
371
41
18
29
Diamer
518
597
255
31
158
Skardu
4,873
993
128
101
26
Ghanche
2,470
237
5
27
7
Pomegranates
788
271
19
103
23
365
7
0
Cherry
1,172
145
342
147
48
184
266
40
Source: Northern Areas Agriculture Statistics 2007 , Department of Agriculture Northern Areas Gilgit
The data shows that the apricot is grown on maximum area followed by apples. The maximum area under
apricot is in district Skardu (4,873 ha) followed by district Ghanche (2,470 ha). Likewise, maximum area
under apple plants is again in Skardu.
As evident from the table above the type of crop mix changes with the district and within each district
with agro-ecology Some fruits look consistent across the districts like apricots, apples and walnuts.
Furthermore, if we go into their proportionate contribution in overall production, apricots have the
maximum contribution in production followed by apples and walnuts.
The type of the “crop mix” is dynamic in the current times as the improved linkage of certain production
areas with the markets and the market demand for a certain fruit or vegetable has affected the choice of
famers for a particular crop. In this regard, the investigations made during the district wise FGDs revealed
that Apples and cherries are the fruits that are quickly replacing the bulk of other fruit plants. They further
reported that Apricots and walnuts due to their easy management, very high adoption and multiplication
rate and due to their multiple roles in livelihood system will remain the highly grown fruits in the region.
Commercialization of marketable varieties of few fruits like apples, cherries and almonds is a good sign
but is limited to specific areas with certain climatic and marketing advantages. The data also indicates that
the low lying districts like Diamir, Gilgit and lower valleys of Ghizar have major production of grapes,
pomegranates and almonds.
21
2.2.5 Fruit Harvest Calendar
Fruit harvest season in Gilgit-Baltistan commences in first week of May in double cropping zone with
Cherries which is followed by apricot. Similarly, in marginal double cropping zone again cherries are
harvested first in middle of June followed by apricots and early maturing local apple varieties. Almost
same sequence is evident in single cropping zone. In general, walnut is the last fruit harvested in the
season.
Dec.
Nov.
Oct.
Sep.
Aug.
July
Jun.
May
Apr.
Mar.
Zon
e
Feb.
Crops
Jan
Table 3: Harvest Calendar for major fruit crops
D
MD
S
D
Apple
MD
S
D
Pear
MD
S
D
Cherry
MD
S
Pomegran D
MD
ate
S
D
Grapes
MD
S**
D
Almond
MD
S**
D
Walnut
MD
S
Source: AKRSP-Basic Horticulture Study for JICA and reconfirmation from District-wise FGDs
Apricot
Key: D=Double cropping Zone, MD = Marginal Double Cropping Zone, S= Single Cropping Zone
** Climate doesn’t fit for production
22
2.2.6 Suitability of promoting apple VC in the context of youth employability
The FDGs overall ranked the apple VC at second highest priority with regard to youth suitability based
on the criteria mention hereunder in Table 4:
Table 4: Value Chain Suitability Criteria for Youth and Context of Youth Employability
Criteria
Involvement of youth
and women
Acceptable conditions
Unmet
demand
Potential for
employment
market
self-
Environmental
sustainability
Appropriate vis- a-vis
family obligations and
peer perceptions.
Rationale
For EELY to achieve its targeted
outreach, it is important that the
selected sector currently or
potentially involve large numbers
of youth and women. This means
that there must be entry points
that are accessible to these
populations.
Some
subsectors
are
not
appropriate for youth, given
inadequate safety standards, a risk
of labour or sexual exploitation, or
other challenges. To avoid creating
negative impacts on youth, EELY
will only select subsectors with
acceptable conditions.
The unmet market demand creates
a “Demand Pull” which is one of the
biggest factors for increase in
production as well as value
addition,
hence
provide
employment opportunities.
Subsectors with lower barriers to
entry (e.g. technical knowledge,
financial investment) will offer
greater opportunities for youth to
launch their own enterprises.
Selected subsectors should not
cause significant damage to the
environment.
Youth are particularly sensitive to
expectations and opinions of those
they are close to, which can
Context of Youth Employability
Currently apple VC does not poses to be the top
priority sector for youth due to non-scientific
harvesting, poor post-harvest handling and lack
of value addition. The areas are key entry
points with high potential for youth
employability
The apple VC is acceptable for youth and
women as it has no negative concerns
associated with it in terms of safety, health
hazard, sexual harassment and socio-cultural
prohibitions
There is unmet market demand for high quality
properly packed “A” grade apple in high end
markets of Pakistan. This demand result in
increase in production of high quality properly
packed apple hence provide employment and
self-employment opportunities for youth
The apple value chain has low entry barrier in
terms of skills and financial investment It is
likely that the youth involvement in grading,
packaging and trading to high end market has
high potential of employability.
The selected value chain has potential to
improve environment as it will increase the
plantation of apple trees.
The business related to apple VC has no sociocultural taboos associated hence peer
perception will be positive towards youth
engaged in this sector
23
influence their selection of value
chains to engage in.
3 CHAPTER THREE: VALUE CHAIN OPERATORS, FACILITATORS AND
ENABLERS
3.1 Value Chain Operators and their Functions
The VC approach requires clear identification of the VC operators and understanding of level of integration
between operators. The success or failure of a value chain intervention depends principally on the
partnerships that are built between actors and support providers that participate in a particular chain
(Lundy et al, 2004). This information enables the VC supporters involved in the design and implementation
of strategy to increase competitiveness and to promote the fair distribution of income among the VC
actors.
Box 2
Value Chain Operators: The people or enterprises performing the basic functions of a value chain are
operators (also called actors). At one stage in the value chain, they become owners of the (raw, semiprocessed or finished) product. Actors can be grouped by the following functions:
• Producers: Actors whose functions are directly related to basic agricultural production, including precultivation, cultivation, harvest, or extractive activities.
• Processors : Actors whose functions are directly related to post harvest management (grading,
sorting, packaging, etc) or processing of basic goods into value added products.
• Traders : Actors whose functions are related to the buying and selling of the product(s).
Value Chain Supporters: The Associations, Network or Organizations who provide support services
and represent the common interests of the VC operators. They remain outsiders to the regular
business process and restrict themselves to temporarily facilitating a chain upgrading strategy.
Business Development Services: The Services offered by individual actors, organizations, or
companies to the value chain, which can be tangible (transport, machinery, storage, among others) or
intangible (technical assistance, training, etc.).
The apple value chain operators and their functions have been discussed below:
24
3.1.1 Input Suppliers
Generally major apple input supplies are Rootstock, Germplasm, Fertilizer (Farm Yard Manure) and
Chemical sprays (Insecticides/Pesticides, Agri Engineering Tools i,e.Tillage Implements, sprayers). In GBC
the local varieties Shinee Balt, Goharaman, Basooti, Astorijay were replaced by marketable Golden
Delious, Red Delious, Dark Red to some extent. These exotic varieties were introduced in this region during
early eighties by FAO, DoA & AKRSP by supporting rootstocks banks and disease free germplasm sources
in different zones of GBC . These rootstock banks gradually faded away due to low demand.
At present, the input suppliers are of three distinct types. These include suppliers of (i) nursery plants, (ii)
agro-chemicals and (iii) manufacturers of tools. There are only few inputs suppliers in the local market.
Traditionally fruit plant saplings were either produced by the farmers themselves or sourced from
neighboring farmers, the practice which is still found, however in decreasing proportion. The common
agri-tools and implements are available without any modification for apple production and harvesting
Among other inputs, there is almost no application of chemical fertilizer Insecticides/Pesticides in apple
sector in GBC . The level of community satisfaction is highlighted in the table below
Table 5: Level of Community satisfaction for various inputs
Input
Availability
Quality
Seed
14%
14%
Fertilizer
43%
86%
Pesticide
57%
29%
Source: Basic Study of Horticulture-AKRSP for JICA
25
3.1.2 Producers
The producers of apple are small farmers living in dispersed small villages with average landholding is
about 14.75 kanals (approximately, 0.73 ha)/farmer. The Agriculture statistics of 2007 collected by the
DoA shows that the highest landholding per household is in Diamir (18.60 kanals) and the lowest is in
district Ghanche where it is 12.35 kanals/household. According to the AKRSP’s Socio-economic survey
2008, the average number of apple trees per household is six. Each tree produces an average of 50kg
apples and a producer produces around 300 kgs on average.
The limited land resource is used keeping in consideration the food security of household, subsistence
agriculture farming is being carried out by allocating the land for various grain crops, vegetables, fodder
and fruits. The majority of farmers have few trees of marketable varieties of apple with small production.
The small producers range of production is 40 Kgs to 1000 kgs , however, there are some comparatively
bigger famers with more trees produce greater volumes but it is also in the volume of tons. The table
below shows the district wise land used to grow apple and other fruits.
Table 6 : District-wise land used to grow major fruits (hectare)
District
Apricot
Apple
Grapes Pears
Peaches
Total
12,862
3,682
1,145
393
516
Gilgit
1,194
256
311
43
120
Hunza/Nagar
1,788
715
77
108
92
Ghizer
1,462
513
328
65
84
Astore
557
371
41
18
29
Diamer
518
597
255
31
158
Skardu
4,873
993
128
101
26
Ghanche
2,470
237
5
27
7
Source: DOA GOGB Agriculture Statistics 2009
Pomegranates
788
271
19
103
23
365
7
0
Cherry
1,172
145
342
147
48
184
266
40
Production Process
To show the producers activity, in the chart below production process has been highlighted. The
production process starts from plantation of rootstock and ends at harvesting. The post-harvest
handling is considered to be a part of market side. The chart below presents the production process and
labour use at each step of value chain.
26
Figure 1: Production Process and Labour use in Apple VCA
Production Process and Functions
Family Labours
Labours of Contractor/Middleman
Harvesting
Family Labours
Plant Protection,
Guarding,, Watering
Family Labours
Weeding, Fertilizing
Family Labours
Bed Preparation, Planting
Family Labours
Preparation of Rootstock,
Grafting
3.1.3 Storage operators (on-farm and off-farm)
On-farm and off-farm storage is not a common practice across GBC . The only storage done by the farmers
is to use apple for household consumption in winter season. The storage is at the most for 6 months
duration under normal conditions owing to relatively low temperatures in the area. An estimated 20
percent losses are reported during storage period.
Table7: Market and Storage Facilities in Gilgit-Baltistan
Districts
Gilgit
Hunza Nagar
Ghizer
Diamer
Astore
Skardu
Ghanche
Local Markets
Storage facilities
Regulated Market
1
1
1
1
1
3
1
2
1
1
1
0
1
1
1 under process
0
0
0
0
0
0
Source: DoA Agriculture Statistics GB
27
3.1.4 Processors
Apple processing is limited to dehydration for making instant drink powder for household consumption
except one business in whole where dehydration is taking place at very small level for export purpose,
few business are in planning and development stage to process apple in the form of puree and pulp
making for national market. In Chitral, during late 90s AKRSP had trained some individuals in processing
of apples to make jams and juices at household level but no traces of this activity found at the moment.
As such there has not been intervention for processing apple in bulks for commercial purposes. Some
producers have been making apple pulps with the support of other NGOs but currently they are not
functional due to lack of information about the market demand.
The Public sector Agriculture Department, PCSIR and Karakorum International University are offering
trainings regarding fruits preservation. The total less than 1% of fruit is being processed at the moment17.
During FGDs potential for apple processing has been assessed and presented in the table below.
Production volumes
% pre/post-harvest losses
Current processing capacity
Potential for drying
Potential for juice making
Potential for improved
Incremental
value
packing
Increase in average hh
Input/output
ration
income
H
M
L
M
M
M
M
M
M
Source: Basic Horticulture Study ARKSP for JICA .
17
H
H
M
H
L
M
H
H
H
M
L
L
L
L
L
L
M
L
M
L
L
L
L
L
L
M
L
M
M
L
M
M
L
M
M
M
L
L
L
L
L
M
M
L
L
M
M
L
L
L
H
M
M
M
L
M
L
L
L
M
M
L
L
Pear
Peach
Cheery
Mulberry
Grapes
Walnut
Almond
Apple
Factors
Apricot
Table 8: Potential Analysis for value addition in different fruits in GB
L
L
L
L
L
H
M
L
L
AKRSP RMA Gilgit 2012
28
3.1.5 Middlemen (Intermediaries/Transporters/Local Traders
Marketing is mostly done by agents, both from local area or from major markets. The categorization of
market operator has been discussed below
Contractors: They buys apple crop in the field and undertake picking, grading and packaging
Group Marketers: These are interested groups of small entrepreneurs and deal marketing as joint
venture.
Commission agents or auctioneers: They are based in main markets of the country and auction
the produce in wholesale market on commission basis.
Wholesalers: they sell on consignment or commission basis they are based in wholesale market.
Secondary Wholesalers: who buy at the wholesale market and transport the produce either to
sell to retailers or at another wholesale market where prices are higher,
Retailers: Who sell to final consumer such as street hawkers, stall holders, retailers etc
Processors: They generally deal in processing of apple (dehydration, Instant drink powder)
The number of middlemen and agent is given in the chart below
Table 9: Marking Actors in Fresh Fruit
Marketing Actors
Pre Harvest
Group
Marketing
Contractor
Local Traders
Commission Agent
Wholesaler
Self-Marketer
GB
33
35
40
33
14
56
Gilgit
10
4
6
2
1
8
Hunza
10
8
2
4
1
6
Ghizer
6
4
8
2
1
10
Astore
1
1
6
8
1
10
Diamer
1
2
6
2
1
10
Skardu
1
10
4
6
8
2
Ghanche
4
6
8
9
1
10
Source: Basic Horticulture Study ARKSP for JICA
29
The market channels through which apple flows to en market has been highlighted in diagram below;
Figure 2: Market Channels of Apple
Market Channel 1
Market Channel 2
Producer
Producer
Producer
94%
Farmers
Sales to trader at
farm- gate or at
pre-harvest stage
Market Channel 3
1%
Farmers
Sells to local market
(Gilgit, Chilas,
Skardu)
4%
Farmers
Sales to Southern
market (Rawalpindi,
Peshawar)
Source: FGDs of all three regions
In market channel 1 farmers sell their produce at farm gate to a local contractor/commission agents or to
contractors from down market usually Pathans, majority of producers follows this system. This channel
also includes the farmers selling their orchard at pre-harvest stage most usually at flowering stage. The
price at farm-gate is Rs.15-18/kg, at wholesale level at town markets was Rs. 25-35/kg in 201118
In market channel 2 farmers sell their produce by themselves in local markets (Gilgit, Skardu, Ghakuch,
Hunza, Astore, and Chilas). Around 1% percent of producers use this channel
In market channel 4 farmers carry their produce directly to down market by themselves. Currently around
1% of farmers follow this system.
18
AKRSP RMA 2011
30
3.1.6 Traders at the Auction Yards
The traders, commission agents (Arhtees) in fruit and vegetable market (Subzi Mundi) Rawalpindi are from
mostly from Punjab, the Peshawar market the traders are from KPK (Pathans), there is no GBC native
commission agent or trader at any of the above markets. There seems less integration between local
traders and trader at auction yard resulting in price instability and low information flow related to market
trends. About 80 per cent of apple sold at pre-harvest stage to contractors reaches to this market. These
contractors who are buying apple at pre-harvest stage are mainly working for the traders at auction yard.
3.1.7
Vegetable Vendors/Retailers.
The apple in the local markets sold through local vegetable shops and vendors. In Gilgit market, there are
9 wholesalers but they primarily deal with fruits brought from down country markets. The apple is sold to
retailers directly by farmer and the local middleman. The chart below shows the quantity of apple sold in
the local markets of all districts of
Chart 4: Sale of Apple in District Retail Markets
14
12
Tons
10
8
6
4
District Retail Markets
2
0
Districts
Source: RMA 2012
Gilgit market with more than 11 tons per year is the biggest market for apple whereas Hunza-Nager has
the least sales volume. The reason being the household level production and availability for home
consumption is highest in Hunza Nagar region. Diamer is the second largest market for apple as local apple
production is less then local demand.
The major wholesale markets of fresh apple are Lahore, Faisalabad, Multan and Dera Ghazi Khan in
Punjab, Karachi and Hyderabad in Sindh, Quetta and Peshawar in Balochistan and NWFP respectively. The
marketing system works mostly in the same way in all these market. Growers or contractors in the
31
producing areas transport shipments to commission agents in these markets and then receive a net price
once the sale is completed. For smaller urban and regional markets, retailers and venders purchase apple
from wholesale traders and merchants of major urban centers
The apple from GBC is destined to Fruit and Vegetable Markets. The Chitral apple is mainly goes to
Peshawar market where as GB apple primarily goes to Rawalpindi market. Some B grade apple has been
traded in small markets like Dir, Tamirgrah, Bisham, Chilas and Dasu markets. The supply to super markets
and store has been at the infancy stage. A farmer group with support of AKRSP has been able to develop
linkages with METRO Pakistan and Shipped 5 tons in 2012.
Chart 5: Sale of Apple Rawalpindi Wholesale Market and District Markets of
6000
5000
Tons
4000
3000
Production
2000
Wholesale Market Rawalpindi
1000
District Retail Markets
0
Districts
Source: RMA 2012
32
3.1.8 Transporters
The main transporters of goods carrying from Rawalpindi to are known as ‘good forwarding agencies’,
the well-known are Hunza Goods Forwarding Agency, Chitral Goods Forwarding Agency, Kohistan Goods
Forwarding Agencies and Gilgit Baltistan Goods Forwarding Agency. There are many other good
forwarding agencies with their main office in Rawalpindi like AK Transports. The 8 and10 wheelers trucks
are the carrier of apple. These trucks take 4 to 5 days from farm gate in Gilgit to Rawalpindi. Same is true
for Chitral apple as well. These trucks are not particularly made for fresh fruit carriage therefore the
wastage is high during transportation of fruits to main markets.
3.2 Value Chain Facilitation
The value chain facilitation is mainly done by public and private sector extension service providers and
donor assisted programmes implemented by both international and national NGOs. In the past, he donor
assisted programmes on extension services had been implemented by AKRSP, Department of Agriculture
and Agribusiness Support Fund. Since 2012, Agribusiness Support Fund is the only organization having
mandate to develop private sector extension service providers. The research farm of Government
Agriculture and Research Department are mainly having experimental trials by the ongoing development
programmes. The extension department is constrained with lack of funds and capacity to reach out to the
farmers.
In the past, Tree Management trainings were given by AKRSP during different NRM projects to number of
farmers at village level, their skills were polished in tree management practices like grafting, budding,
and pruning. These trained farmers are less efficient due to age factor and the youth is not properly
trained. The Focus Group Discussion Hunza reveled that youth can be interested to learn orchard
management skills provided that they are paid. Currently, the apple production is not considered to be
high value cash crop due to malfunctioning of market system.
33
3.3 Enabling Environment
The Horticulture sector has come a long way to graduate from subsistence to commercial level in .
Horticultural products at present not only contribute to food security but also to poverty reduction
through creation of opportunities of employment and income earning. The sector is now in take-off
position. It however requires policy interventions to provide skilled labor force, production inputs, wellfunctioning and competitive markets, and a notable market demand. GB due to its special constitutional
status has been kept outside the main policy framework. The relevant government ministry is the Ministry
of Agriculture GB. At GB level the agriculture and horticulture policy and support mechanism to develop
this sector yet to be announced by the government. Federal Level Ministry, the MINFA has been dissolved
in the wake of devolution of powers to provincial government. Prior to its desolation, it had done some
crucial work as mentioned below
Department of Agriculture and MIFA funded projects in Agriculture
Agriculture extension services in Gilgit-Baltistan were started by the Government in 1952 with the
establishment of Agriculture Extension Department (AED). The mandate of AED was to provide
agricultural services to the farming communities in GB through demonstration of improved agriculture
management practices aimed at boosting productivity. The AED was upgraded in 1985-86 to Directorate
of Agriculture (DoA) by creating the post of Director of Agriculture at the GB level and the posts of Deputy
Directors of Agriculture at district level. Currently, Department of Agriculture has over 500 staff with
central directorate in Gilgit and offices in all the district headquarters. It is entrusted by the government
to deliver the following services to the farmers of Gilgit-Baltistan:19
 Provision of disease-free seed potato
 Provision of high quality fruit plants
 Provision of cereal & vegetable seeds
 Research and demonstration of off - season vegetable production
 Insect pest and disease management (IPDM)
 Agriculture extension and education
 Adoptive research for varietal evaluation
 Improvement of irrigation infrastructure in Gilgit Baltistan
In addition to the regular activities, the DoA also has the mandate to design and implements the projects
funded directly by the Federal Ministry of Food and Agriculture (MIFA), Islamabad. At present there are
five such projects under execution in Gilgit-Baltistan out of which following four are directly implemented
by the DoA:20
 Sustainable Development of Agriculture. (SDA)
 Mountain Agriculture Research Systems (MARS)
19
Source: Agriculture Secretariat, GB
20
ibid
34



National Programme For the development of water Courses (NPIWC)
Improvement of water Management practices (IWMP).
A brief description of these projects is given in the table below:
Of the above listed projects, the five year project entitled “Establishment of Mountain Agriculture
Research System in GB (MARS)” is of great significance for the future of technology development in the
region since it is launched as a step towards establishing an independent Agricultural Research Wing in
the region. The project is nearing its conclusion but the intended goal of creating a research wing does
not seem to be within reach due to funding constraints and lack of interest from GB Government.
The Chitral district is under Ministry of Agriculture KPK. KPK has well developed extension service
provision but being remote Chitral farmers cannot get advantage of the extension service provision of
Agriculture Department
Some important areas for creating enabling environment that needs attention are; (i) certification of
rootstock (ii) Establishment of a regulated fruit and vegetables market at Gilgit and Skardu and Chitral,
and (iii) Agriculture Policy, regulatory framework for quality control of inputs.
35
4 CHAPTER FOUR: VALUE CHAIN ANALYSIS
4.1 Introduction to Value Chain Analysis
The apple value chain analysis has been carried out to systematically identify strengths and weaknesses,
opportunities and constrains, competiveness and maximization of market share, value distribution among
all operator of value chain keeping in consideration the perspective. The value chain map below depicts
the flow of apple in the market, activities carried out at each stage of the value chain, the structure of
actors and the support involved in the value adding process
Figure 3: Apple Value Chain Map
Figure: Map of Apple Value Chain
Consumers
Marketing
Procurement/purchase,
Storage at shop,
Retail sale
Procurement through
bidding in Rawalpindi
Peshawar
Cold Storage at down
Sale in local markets,
Fruit & Vegetables
Retailers
Wholesaler/
Traders
Contractors from
((pathans)
Local
Contractors
Informal & private
nurseries
Ministry of Agriculture, Irrigation and
Livestock
Pesticides/Ag
ro-chemicals
sellers
Nursery Growers
Association
Tools/ Equipment
Manufacturer
Department of Agriculture
Fruit Plants/seedlings
Agro-chemicals
Farmyard Manure
Tools/Equipments
Small Farmers with Scattered Plantation
Agriculture Research Station
Input
Supply
Fertilizer application
Irrigation
Pruning
Picking
Sales on Farm gate
Agribusiness Support Fund
Production
Grading/Sorting,
Storage
Aga Khan Rural Support Programme
Processing
36
4.2 Market Analysis
4.2.1 Market Share and Production Potentials
The main wholesale markets of Fruits and Vegetables in Pakistan are located in each provincial capital and
the Islamabad whole sale market serves the twin city of Islamabad and Rawalpindi. Apart from the main
market mentioned herein, almost each city and town has its own whole sale market for fruit and
vegetables. The apple is main destined to Peshawar and Rawalpindi Market where it faces competition
with Swat apple. An indicative map developed by Market Development team after consultation with local
market operator is given below to understand apple trade flow in major markets of Pakistan.
Figure 4: Indicative Map of Apple Flow to Pakistan Markets
Chitral
Swat
Legend: Black Arrow Show Trade Flow of Apple
The marketing channels for apple in Pakistan are mostly destined to Wholesale Markets of Fruits and
Vegetables (Subzi Mandi). There are very limited direct supply to chain stores and super markets.
37
Chart 8 : Market Share of Apple
Название диаграммы
Others
12%
GBC
3%
KPK
25%
Balochistan
60%
Source: Pakistaneconomist.com
4.2.2 Price dynamics
During the FDGs, the framers in districts of Gilgit, Ghizer, Hunza, Skardu and Ghanche reported that the
properly graded and packed apples of commercial varieties like Red Delicious, Stark Crimson, Kala Kulu,
Golden Delicious fetch almost 100-120% higher prices compared to the loose packed apples. The farmgate price of apple is about PKR 25-30, whereas the price of properly graded and packed apple is PKR 6070. According to the AKRSP’s Socio-economic survey 2008, the average number of apple trees per
household is six. Each tree produces an average of 50kg apples and hence the average apple per
household is 300 kg. Assuming that 50% of this is available for marketing, then the total apple available is
150 kg and if it is sold at an average price of PKR 50/kg, the average income per household will then be
PKR 7,500. It was also learnt during from the respondents that some traders from some regions buy
premium quality apples from at a comparatively low price and sell it in down-country with other regional
labels. The farmers complained about such practices and narrated the stories that how they confiscated
the boxes in Hunza labeled as “Swat Apples” and compelled the trader to re-pack them as “Hunza Apples.”
38
4.2.3
Production costs
The production costs of apple vary between area to area and farmer to farmer depending upon cultivar
and knowledge. On average the cost is calculated as Rs. 6 to 10 per kg. The breakdown of the average
production costs shows that harvesting cost is the largest input component (around 50% of total input
costs), followed by labour costs (32 %), FYM (13%) and pesticide sprays costs (2%). A summary of average
production costs with calculations based on the survey carried out in the year 2009 is provided in Table
16.
During the survey, it was noted that the most apple growers do not keep a record of labour inputs used
for production. They generally use FYM prepared by themselves and do not keep a record of the number
of baskets of FYM used in the farm. Similarly, there is a general trend of providing food and drinks beside
their daily wage to the labour hired other than family labour. Hence, it is difficult to calculate the exact
cost of labour inputs.
Table 10: Cost of Inputs
Component
Cost * (Rs/kg)
Remarks
Cost of Picking Apple
Labour Cost
FYM
Pesticide
4
3
1-2
1
9-10
Cost of Harvest is around 50%
Cost of Labour is around 30R%
Cost of FYM is 10 to 20%
Cost of Pesticide is around 10%
Total
Source: Calculated based on figures provided by the respondents during the survey carried out in
Aug-Sept 2012
39
4.2.4 Distribution of Value Addition
Figure below shows the distribution of value addition across the value chain actors. Value addition is the
difference in sales price and cost of inputs and raw materials at each stage of the value chain. In , the role
of local traders and middlemen is negligible, and there are very few actors who receive a share of the
value addition and profit margin. Very few apple growers form groups and act as integrated value chain
operators and perform two or more functions in the chain. They produce apple, harvest grade and pack
and transport the apple to the auction yard for sale. Mainly the non-local agents and traders purchase the
whole fruit prior to harvest and do rest of post-harvest activities like picking, grading, packaging and
transportation to market.
Figure 5: Calculation of Profit to VC operators
Apple
Growers
Agents/
WS/Traders
Retailers
contractor
Sales Price (Rs.)
18-20
25-30
80-90
Cost of Material
8-10
20-25
70-80
(Rs.)
Transportation
10
Cost
Gross Value
8-10
5
5-10
Added (Rs.)
% value Added
50%
25%
16-30%
Source: Calculation on the basis of information provided by Traders in FGDs
120-150
100
5
10-15
20-25%
40
4.2.5 Competitiveness
The competitiveness of the apple subsector was analyzed using Porter’s Diamond Model. According to
Porter there are four conditions that support or hinder the organization from being competitive in the
market:
• Demand Conditions
• Factor Conditions
• Related and Supporting Industries
• Firm strategy, structure and rivalry
Demand Conditions: High level local market demand creates a national advantage. The total demand
estimated considering the per capita consumption in the region is 10,08000 tons per year. Therefore the
demand for apple in Pakistan market is high. In addition, the potential for exports to Bangladesh, Srilanka
and neighboring Middle East countries is also high; therefore export market demand is also high. So as
per Porter’s Model, demand conditions can be seen to be highly favorable.
Figure 6: Porter’s Diamond Model of Competiveness
Demand
Condition
(High)
Factor
Conditions
(Medium)
Related and
Supporting
Industry (low)
Firm Strategy,
Structure and
Rivalry (low)
Factor Conditions: Factor conditions are basically the production factors that include the suitability of
agro-climatic conditions, availability of raw materials, skilled human resources, technology and
Capital. In the table below apple has been ranked by FGD participants to assess the factor conditions in
comparison with other GB horticulture products
41
Almond
Walnut
Grapes
Pomegranat
e
Cheery
Peach
Pear
Geography and Climate
Geo-distribution
Resource base
Off season
Economic
Multiplier affect
Income
Processing/Value Addition
Market demand
Employment generation
Food Security
Social
Collective action
Women involvement
Youth involvement
Poor involvement
Environment
Source: FGDS 2012
Apple
Factors
Apricot
Table 10: Factor Conditions
H
H
M
H
M
N/A
M
M
N/A
H
M
N/A
L
M
L
L
L
L
H
L
M
M
L
L
M
M
L
H
M
H
H
H
H
M
M
M
M
M
M
L
H
M
H
M
M
L
M
M
M
M
M
M
M
L
M
L
L
L
H
L
H
L
L
M
H
M
H
M
L
L
L
L
M
M
L
L
M
L
H
L
M
H
H
M
H
H
L
M
M
M
L
L
M
L
M
M
L
M
L
L
M
L
L
L
L
M
L
L
L
L
M
L
L
L
M
M
L
L
L
L
L
L
L
L
L
M
Key: H= High, M= Medium, L=Low N/A= Not Applicable
Except for the shortage of labour and limited access to transportation, all other conditions
are highly favorable for the apple value chain in .
Related and Supporting Industries: In terms of supporting industries, the competitiveness of the Apple
subsector is rated as medium. The involvement of logistical service providers and private business firms
is very minimal in the Apple business. Support services are very poor and supporting government lack
resources and capacity to carter to services. However, the strong focus of AKRSP in promoting apple sector
by involving youth to become active operators of the value chain will help making the value chain
functional
Industry strategy, structure and rivalry: The number of firms/enterprises, the size of enterprises and
domestic rivalry all affect the level of competitiveness. While the particular firm or industry may prefer
less rivalry, more local rivalry is better for the growth of subsector as it puts pressure on firms to innovate
42
and improve. In GBC, local rivalry in the apple subsector is very small; there are not many competitors in
the business.
According to Porters Diamond model, the competitiveness of the apple sector is high in
terms of demand and medium in terms of factor conditions and low in terms of related support industry
and industry strategy, structure and rivalry. The strategy needed in this situation has been discussed under
4.4 Development of Vision, Goal and Strategy.
43
4.3 SWAT Analysis
Strengths and Opportunities
Functions

Marketing
Demand for high quality apples
in national market particularly in
high end markets




Unskilled and Semi Skilled
Labour available

Suitable climatic condition for
production of high quality
Marketable varieties are already
introduced by AKRSP
Production
Raw material available for
processing
Processing



Lack of entrepreneurship
Lack of Financial capital


Un planned plantation
High pre and post- harvest losses
due to lack of skills and
infrastructure conditions;
Poor holding capacity of the
farmers resulting in gluts at the
market;
Pest and diseases (codling moth,
trunk borer); and,


Availability of farm yard manure;
Availability of pesticides,
chemical fertilizers

Input
Supply



Poor
Access
to
true
type/certified rootstock
Poor
Access
to
true
type/certified rootstock
to
to
Weak institutional services primarily related to technology development, extension and its adoption,
access to market information and business advisory and financial services and absence of coordination
among government agencies.

Weaknesses and Threats
(Constraints)
Wastages at market due to
inappropriate packaging (used
cartons) and faulty handling;
Weak market linkages and limited
participation of producers in
marketing function;
Absence of grading practices and
processing functions in the value
chain;
Inappropriate transportation that
causes losses.
44
4.4 Efficiency Analysis
The FGDs view about efficiency of various functions of VC, their expectation of after project interventions
and improvement based on their suggestions to explore chain store and export market has been
presented in the chart below:
Table 11: Efficiency Level in relation to Factors
Efficiency Level (-100 to +100)
Functions
Factors
Current
10
After Intervention
20
25
-20
5
30
-20
10
50
50
50
5
10
40
Quantity
Quality
Cost of Production
Post-harvest handling
10
30
50
10
20
40
40
40
50
80
60
80
Packaging
15
50
90
Farm level storage facility
Market level storage
facility
0
50
50
0
0
0
Processing
5
5
10
Demand
Market
Transportation
Existing market
Market Information
Profit
Production
Storage
Processing
Export/Super
Market
20
Source: FGDs 2012
Market: The FGD participants have evaluated the current and future efficiency in relation with existing
F&V market and potential niche market on the basis of existing supply. The participants ranked the
existing market in negative. According to them the fruit and vegetable markets of Pakistan (Subzi Mandi)
are highly dynamic, except the big market players of Subzi Mandi, the small traders mostly cannot get
right price for their product due to lack of understanding and non-transparent auction practices. The local
traders mostly moderately literate are usually unhappy with the market system. This marketing system
has poses the biggest hindrance in the growth of apple value chain and it has been given negative marks21.
The efficiency ranking suggest that the demand for apple remained unmet due to inefficiencies in supply,
transportation, entry barrier in the F&V market, lack of market information. The quality is considered to
21
FGD Gilgit
45
be high but the cost of production in comparison with price is also high. The post-harvest handling was
also considered to be inefficient. The packaging was also in appropriate. The non-availability of storages
at farm level and lack of processing also a contributed to increase the inefficiency of value chain
The FGDs suggest AKRSP to develop linkages with chain stores/ Super market or export market
particularly to Kashghar China through Sost border. As per their ranking, the chart above reflects
incremental value in all value chain functions due to demand pull by export market/ chain store. The
production of the quality marketable apple is likely to increase in case of higher profit margin to farmer
as compare to other fruits i,e. apricot and cherry. The inclusion of youth at all level of value chain will
possible only if they get income comparable to market rates. Routine chain after intervention shows little
growth due to malfunctioning of existing marketing system.
Production: Random, haphazard and un-planned cultivation, poor post-harvest contribute heavily to the
fruit losses. Conservative estimates of these losses are in the range of 40-50 percent. The current harvest
can be increased by controlling these losses; the resultant produce available for sale per hectare would
increase by 30%.
Most growers do not grade on farm and grading is not common in the marketing chain, although some
growers, harvest contractors, and wholesalers grade apples based on either colour or size. Retailers may
also sort out high and low quality fruits before sale. Price differences observed in primary and wholesale
markets are primarily based on visual inspections of the boxes in the lots Being traded
Packing sizes of boxes are roughly 15-20 kilograms. Different packing materials are used, including thin
wooden crates with straw packing, corrugated cardboard boxes and trays of various qualities. Use of highquality boxes and trays with sufficient rigidity to protect the fruit is limited. Overstuffed boxes containing
significant quantity of bruised fruit are common and that also add to post harvest fruit losses.
Apples from GBC are transported in un-refrigerated trucks over poor roads. It takes 2-4 days to reach
Rawalpindi market. Trucks are often overloaded. In combination with poor quality packing materials,
overloading damages the fruit during transportation. Lack of refrigeration, longer journey times and poor
packaging reduces the quality of GBC apples in the markets. All these inefficiency deprived the famers and
other actor in value chain from an income of Rs. 43 million22
Lack of Controlled Atmosphere Storage facilities and inappropriate on-farm and off-farm storage
conditions undermines the intention of famers to withhold supplies. It is estimated that lack of Storage
facility causes a loss of 20% of the produced. The monitory value of this loss is estimated to be 29 Million
Rupees23
22
Calculation is based on wastage figures of DoA Agriculture Statistics 2009
23
Abid
46
Processing: The absence processing function significantly lowers the price competition for lower grade
and dropped apples. In some instances, 40-50% of the apple harvested by dropping it to the ground are
damaged and bruised. Mostly these apples are consumed at home or fed to livestock. Whereas through
improved orchard management, this percentage of on-farm losses can be drastically reduced, it is
estimated that there will be still 40 percent of the total produce in the available for processing.
Chart 10: Graphic Presentation of efficiency level in the Apple value chain of
100
80
60
40
Efficiency Level (-100 to +100)
Current
Market
Production
Processing
Market level storage…
Packaging
Post harvest handling
Cost of Production
Quality
Quantity
Profit
Market Information
Existing market
-40
Transportation
-20
Demand
0
Farm level storage…
20
Efficiency Level (-100 to +100)
After Intervention
Efficiency Level (-100 to +100)
Export/Super Market
Storage
Processing
Source: Graphical Presentation of FGDs ranking
47
4.5 Constraints
The inefficiencies in value chain mentioned under 4.4 are due to production and market related issues
and constraints. The key constraints are presented hereunder.
4.5.1
Constraints related to Marketing
Not availability of suitable packaging
The standardized packaging suitable for long distance (more than 600 km mountainous road)
transportation is not available in . The available cardboard packaging cannot sustain the jerks of
bumpy road leading to F&V market hence wastage of fruit and loss in terms of money. The
packaging considered to the top most important constraints as shown in the table below
Non availability of suitable transport
The transportation is made in the carriage trucks which carry goods from south. These trucks are
not made for fresh apple transport. They are exposed to rain, sun, dust and takes considerably
longtime to reach market. The temperature controlled trucks are not available locally and if
specially booked from southern cities, it cost double as it has to travel two. This is second biggest
constraint as disclosed during RMA and FGD 2011.
No Commercial Scale Processing
There is no commercial scale processing of apple in GBC therefore no market for ‘C’ grade apple;
bruised or damaged during harvesting.
Quality and Volume Issue
Available of small quantities in scattered and additional time and effort required to make volumes
of single truck load. The collection from different location and number of farmers put the trader
to keep a quality standard therefore has to compromise with the quality
48
The table below shows that lack of packaging and non-availability of Mandi (market place) are the most
important issues of marketing vegetables in Gilgit-Baltistan, followed by low volume of production to
compete in the market. The top ten issues identified and ranked by the respondents are mostly in the
supply side. The only demand side issue they identified were low local demand that reflects both lower
purchasing power and small population.
Table15: Ranking of Apple Market issues
Issues
GB
Non-availability of suitable
57
packaging
No Commercial Scale Processing
50
Quality and Volume Issue
51
Non availability of suitable
35
transport
Issue of Fruit and Vegetable
30
Market (F&V Mundi)
Gilgit Hunza Ghizer Astor
7
7
9
10
Diamer
7
Ghanche Skardu
9
8
9
8
1
9
8
0
8
8
0
6
7
9
5
4
9
5
7
10
8
9
6
10
10
10
0
0
0
0
Source: FGD and RMA 2012
4.5.2 Constrains related to Production
The average cultivable land, which the households own in the area, are very small (1.3 ha/hh) and is
scattered. As a result, from centuries the farmers’ emphasis has been to secure the food for themselves
and their animals from the limited available land. This has resulted in a highly integrated and intensive
farming system. This practice still continues in majority of the areas and farmers lack the capacity to make
any major shift considering it a risk to their food security. There are, however, some exceptions, as
families who own bigger pieces of land and those who have other stable sources of income, have shifted
towards commercial production, but still the ratio of change is very low owing to consistent fragmentation
of existing lands and low emphasis of government on large scale land development projects.
Poor Access to true to type/certified rootstock
The absence of a market driven input supply system particularly provision of certified and trueto- type rootstock of marketable varieties
Lack of Pruning and Picking Technology
There is no technology for pruning and picking of apple available in . The farmers have neither
know-how of pruning and picking of apple neither market based services are available to carryout
these tasks resulting low productivity and poor quality of apple
Quality and Volume issue
49
The production is scattered deep in the valleys and no proper facility for aggregation. The farmers
are unable to make bulks and sale after grading therefore get low rate.
Knowledge Gap Regarding Fruit and Vegetable Processing
The farmers in Gilgit-Baltistan lack the knowledge regarding the possibilities of processing various
fruits and vegetables produced in the region. Following hereunder are the main reasons for this
gap of knowledge:
 Limited local culture of fruit and vegetable processing
 Extremely low exposure of the farmers to modern fruit processing environment
 Lack of opportunities to learn modern fruit processing techniques; and
 Quality issues in the available training opportunities.
Table 14: Ranking of Apple Production Issue in Gilgit Baltistan and Chitral
Issues
GB
Gilgit H/Nagar Ghizer Astor
Poor Access to true to
40
5
10
4
8
type/certified rootstock
Lack
of Pruning and Picking 57
10
10
9
7
holdings
Technology
Low Volumes and Mix Quality
42
5
6
5
8
Knowledge Gap Regarding 25
5
4
4
3
Fruit and Vegetable Processing
Diamer
0
Ghanche Skardu
5
8
8
6
7
7
2
3
3
8
4
Source: AKRSP RMA-2010
50
4.5.3 Infrastructure Regarding Processing and Marketing
Compared to the rest of the country, Gilgit-Baltistan has the least and is nascent in provision of
infrastructure to support the markets. This challenge is coupled with the peculiar geographic condition of
the area, with high mountains, remote valleys, isolated population and scattered production of
horticulture.
Since in the basic infrastructure like roads, Gilgit-Baltistan has been recently linked with rest of the market
through the construction of KKH, which runs along the Indus. whereas most of the population resides in
the deep valleys and very few have taken advantage of this road.
Table 13: Roads and Communications Facilities
Types of Facility
Asphalted Roads
KKH (Km)
KKH Skardu (km)
Other Roads (km)
Non Asphalted Roads
Shingle roads Km)
Bridges all types (Nos)
Air Ports (Nos)
Skardu -Boeing jet
Gilgit (ATR)
Other Communication Services
Radio Stations(Nos)
Telephone and mobile service (No.)
T.V.Re-Broad casting Stations
Bus Transport Services (Nos.)
Numbers
616
171
574
3,636
380
01
02
02
05
02
12
Source: MTDF (2005-10), P&DD, GB
Besides the KKH, most of link roads are non-asphalted and are in bad shape as the region is mountainous
and rugged hence the cost of transportation is comparatively high and make the local product noncompetitive. There is no specialized transportation for fresh fruit to take the produces to bigger national
markets. The nearest national market is in Mansehra, around 500 kilometers away from market in Gilgit
(center). Most of the respondents, in this connection, opine that the cellular phone services are playing
key role both in terms of converge of the area and range of services to market related activities. Access
to up-to-date market information is critical for traders to minimize the risk.
51
Map 2: Karakoram High Way
Infrastructure related to processing industry
There is no industrial and export processing zone having state of art infrastructure like building, road,
power, water and sewerage system at level for processing horticulture produces. There are however
some micro level enterprises which deal with the preservation of fruits such drying apricot and kernel oil
extraction. At household level, some dehydration tunnels were constructed for apricot drying.
52
Furthermore, the available storage facilities in few districts are mainly government owned and not
available for private sector use, but none of these storages have temperature control facility.
53
5 CHAPTER FIVE: VALUE CHAIN PROMOTION
The Value Chain Promotion Strategy developed here is to plan and carryout a set of activities to increase
the competitiveness of a subsector with the active participation of a value chain’s diverse actors to achieve
common objectives, around which one or more business organizations and/or interest groups are linked.
VC promotion strategy basically focuses on two areas: 1) market orientation or better end price gained
and 2) youth employment or income increased
The VC promotion strategy for the Apple subsector has been developed by mapping and carrying out
detailed analysis to identify (i) the comparative advantages of GBC apple and (ii) the most pressing
constraints that are hindering the growth. Some of these constraints are related to functions, actors and
linkages among them, government policy and infrastructure while others are related to external factors
such as terrorism and sectarianism
AKRSP in close collaboration of stakeholders will address these challenges in a systematic manner and
contribute to achieve its development goal by promoting economic opportunities through broad-based
growth and boosting enterprises in apple VC that are important for the youth employability in GBC .
5.1 Vision and Goal
The following vision, goals and areas of interventions have been suggested for the apple value chain.
Vision: Sustainable and more equitable integration of economic actors into effective market systems to
improve youth livelihoods through provision employment and self-employment opportunities.
Overall Goal: The GBC apple reaches to high end market and captures 60% market share in 2 years.
Specific Goals:




Stakeholder sit together and develop a strategy for the development of Apple VC
Youth entrepreneur successfully start selling apple in high end markets
Youth entrepreneurs start processing businesses
Sustainable provision of market based support service by youth
To achieve the above mentioned goals, it is important to address the most pressing constraints and
challenges with appropriate set of actions. It is obvious that no one single organization can overcome all
the problems nor it is advisable to have a huge crowd of supporters at a particular level of the value chain
when there is no-one working at another level. The first pre-requisite is therefore to clarify the roles
among the support service providers as to which organization can best provide which services. The
54
identified organization as support service providers and their role has been discussed in (5.3) under
Strategic Guidelines
5.2 Youth Inclusion as VC Operators
The value chain analysis provide basis for youth inclusion at different stages of value chain where
potential exist for adding value to explore new markets with higher margins. The proposed activities
within the value chain to remove the key constraints provide opportunity for the youth to become an
important operator of value chain. The detail action plan is given in the tables below:
Table: Constraints and Recommended Actions
55
Constraints
Consumer
Non availability of suitable transport
Quality and Volume Issue
Lack of knowledge to produce value
added product
Market Level
Not availability of suitable packaging
Lack of Pruning and Picking
Technology
Quality and Volume issue
Production Level
Constraints
Youth Inclusion as VC
operators to remove
constraints
Youth as operator of packaging
manufacturing enterprise
Support youth to establish local
manufacturing business of standardized
packaging suitable for long distance
(more than 600 km mountainous road)
Youth as transporter
Support youth groups to conduct and
feasibility study and start of operation as
transporter for Apple other fresh fruit
Youth as Pack house operator
Support youth in Establishment of
Business Parks/ Pack House in the Fruit
Production areas
Skill Development of youth in Fruit
Processing
Technical and business training to youth
at village level to start basic level
process (pulping, drying) and linking
with processing business
Youth Inclusion as VC operator
to remove constraints
Youth as Input and Extension Service
Provider
Support agriculture graduate to start
input supply businesses with provision
of extension service including the
technology for pruning and picking
Youth as progressive farmer
Provision of technical information
related to development orchards of
commercial verities
56
Poor Access to true to type/certified
rootstock
Youth as nursery operator
Support youth to establish nurseries
of certified and true- to- type rootstock
of marketable varieties
57
5.3 Recommendations
Based on the above analysis, the following recommendations and interventions are proposed under
broad categories, specific intervention recommended have been discussed under strategic guidelines
(5.3)
5.3.1 Formation of Horticulture Value Chain Platform (VCP) and working with partners
Value Chain Approach emphasizes on collaboration and partnership with stakeholder of a particular value
chain as it is not possible for one organization to remove all hurdles alone. Formation of VC Platform will
serve the purpose of sensitization of stakeholders by presenting facts and figures of a selected value chain.
Since the stakeholders of all fruits and vegetable are same therefore formation of one Horticulture Value
Chain Platform (HVCP) is recommended for GB and one for Chitral to bring together all the stakeholder
of horticulture sector under one roof to look into opportunities, constraints and assume responsibility as
per their mandate. The main objective HVCP is to develop a strategy for each key value chains of
horticulture sector starting with Apple VC.
5.3.2 Shape the Strategy for Apple VC
Since market operates on the basis of completion between suppliers and buyers. The demand/supply
situation usually determines the price for particular products. The product attributes remain a key factor
in determining the product position and price parameters in a particular market. The GBC apple said to
be having some special attributes in terms of taste and appearance. It also has some weakness in terms
of supply of mix quality to market en due to poor grading which lowers it ranking from “A” grade in
majority of cases. The low market share due low supply to market refrain it from being “Price leader”. in
addition the non-transparent auction practices have made this market channel least attractive to the GBC
youth. To tackle such a situation where a product has low market share due to low volume to supply,
having attributes superior to its competitors, a focus strategy (differentiated) is being recommended by
market experts. In this, this regard, Michael Porter’s Strategy based on his Five Force Model has been
discussed under heading ‘5.4.2 Proposed Strategy for Apple VC’ to shape a apple VC strategy for GBC
Apple.
5.3.3 Entrepreneurship Development Programme
To address the constraints, particularly market constraints including non availability of suitable packaging,
no commercial scale processing, non-availability of suitable transport (carriage), quality and quantity issue
and no processing business to use ‘C’ Grade apple as raw material. Apple VC requires operators with new
set of skills to address these constraints. To develop/polish new set of skills in existing VC operators or
bringing youth into VC as new operators, launching of a tailor made Entrepreneurship programme is
recommended in collaboration of Gilgit base existing service provider like KIU at Core Office level to
include selected regional youth from all three region for class room training and placement with a
58
business matching to their planned business. Technical Assistance should be provided to the service
provider to develop training module if needed. In addition AKRSP should also build the capacity of trainers
of selected service provider as per recommendation of Labour Market Analysis (LMA).The proposed
strategy has been presented under heading ‘5.4.3 Entrepreneurship Development programme’
5.3.4 Community Based Skill Development Programme
To address the quality issue, it is recommended that basic level post-harvest training particularly to
young women should be imparted at all apple production areas at mass level. Service provider from
down country having expertise to develop skills in Apple VC including picking, grading, waxing/polishing
and packaging on international standards (as mentioned in the Box 1 below) for export market should
be engaged for this skill development programme. The training should have two phases;
1) Training of youth through down country service provider to create local service
providers (ToT) in Apple VC
2) Training of youth through newly create local service providers to develop skilled labour
force.
.
The strategic guidelines and action plan has been given under ‘5.4.5 Community Based Skill
Development Programme and 5.4. 6 Action Plan’.
5.3.5 Support to Input Supplier including Apple Nurseries
The input suppliers in the villages and apple production areas including apple nurseries are either do not
exist or very weak, however, there are input suppliers and nurseries in Gilgit, Baltistan and Chitral cities.
It is recommended that these input supplier and nursery owners should be support to increase their out
by franchising their respective business to youth of the apple production areas. It is recommended that
AKRSP should organize record keeping and inventory management training in collaboration of KIU and
franchiser should give a two weeks placement to give practical exposure of their business. These input
supplier should also be linked to Gilgit, Baltistan and Chitral city based nurseries for sale of apple plants
during planting season on commission basis. The detail strategic guidelines and action plan is given under
“ 5.4.6 Strategic Guidelines to Support Input suppliers”
59
5.4 Strategic Guidelines and Proposed Action Plan
5.4.1
Strategic Guidelines for formation of Horticulture Value Chain Platform (HVCP)
Two HVCPs should be formed; one in Chitral and one in GB involving all stakeholders from Public, Private
Civil Society relevant institutions. The following key stakeholders should be included for GB and the
Stakeholders for Chitral may be decided by AKRSP Market Development team Chitral
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Selected Existing VC Operators
Selected Progressive Farmers (apple producers)
Student Representative from Food Processing Department KIU
Representative of Chamber of Commerce Gilgit
Representative of Agribusiness Support Fund (ASF)
Representative of FSC and RD
Representative of Department of Agriculture
Representative of MARC
LSO Network Representative
Selected MLA
Representative of AKRSP
Representative of Financial Institutions
AKRSP should develop Terms of References for the proposed VCP to have coordinated efforts for the
promotion of the value chain. The stakeholder should identify the key constraints at production process
land market level and start deliberation for developing Value Chain Development Strategies for key
horticulture value chains including Apple VC. The platform will identify the roles and responsibility of each
stakeholder and develop an action plan.
Action Plan and Timeline
S.#
Description
1
1
2
3
4
5
6
7
8
2
3
4
5
Months
6 7 8
9
10
11
12
Identification of Stakeholders
Stakeholders Workshop to finalize membership
1st Stakeholder Meeting
2nd Stakeholder Meeting
3rd Stakeholder Meeting
4th Stakeholder Meeting
5th Stakeholder Meeting
6th Stakeholder Meeting
60
AKRSP will prepare detail TOR of HVCP, assign one staff and provide secretariat office for day to day
activities. AKRSP as host organization will bear the refreshment cost of the workshop. The cost has been
reflected below under heading budget.
Budget
The cost implication of this programme has been detailed below:
S.#
1
2
3
4
5
6
7
8
Activity
HVCP Secretariat (at ARKSP core office)
Stakeholders
Workshop
to
finalize
membership
1st Stakeholder Meeting
2nd Stakeholder Meeting
3rd Stakeholder Meeting
4th Stakeholder Meeting
5th Stakeholder Meeting
6th Stakeholder Meeting
Type of
Unit
Office
workshop
Units
workshop
workshop
workshop
workshop
workshop
workshop
1
1
1
1
1
1
1
1
Unit Cost
(Rs.)
Total Cost
(Rs.)
0
25,000
0
20,000
20,000
20,000
20,000
20,000
20,000
20,000
Total (Rs.)
20,000
20,000
20,000
20,000
20,000
20,000
140,000
The cost of each workshop is estimated to be Rs 20,000 including lunch and light refreshment and
stationary for the workshop. There will be 7 workshops in the first year; however, the number of
workshops may be increased/decreased on need basis. Total cost of one HVCP is estimated to Rs. 140,000.
Same cost may be applicable to Chitral as well hence total cost for 2 HVCP per year will be Rs. 280,000
per year
61
5.4.2 Strategic Guidelines for Shaping Strategy
Though the HVCP’s prime objective will be developing of strategies for key VC of Horticulture Sector, yet
analysis of key finding related to opportunities and constraints in Apple VC with regard to unmatched
attributes of GBC apple and potential for inclusion of youth as VC operator suggest to follow a strategy
influenced by Porter’s Five Forces Model which advocates for a focus strategy (differentiated) to
concentrates on a narrow segment and within that segment attempts to achieve advantage or
differentiation. An analysis of porter model with regard to Apple VC is presented below:
Figure 7: Porter’s Five Forces Model
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry
THREAT OF
NEW ENTRANTS
Barriers to Entry
Absolute cost advantages
Proprietary learning curve
Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
THREAT OF
SUBSTITUTES
-Switching costs
-Buyer inclination to
substitute
-Price-performance
trade-off of substitutes
BUYER POWER
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
DEGREE OF RIVALRY
-Exit barriers
-Industry concentration
-Fixed costs/Value added
-Industry growth
-Intermittent overcapacity
-Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes
Since the differentiation is already taking place in market with brand name of HUNZA and Chitrali apple,
therefore the customer’s loyalty, particularly the customer of high end market can be ensured provided
that consistent supply in the apple season of high quality through proper grading, waxing and packaging
in a marketable package. To achieve success in a narrow market segment with low volume of high quality
62
product, he porters model suggest a focused strategy is needed to differentiate the product as depicted
in the diagram below.
Figure 9: Shaping a Strategy
Advantage
Target Scope
Low Cost
Product Uniqueness
Broad
(Industry Wide)
Cost Leadership
Strategy
Differentiation
Strategy
Narrow
(Market Segment)
Focus
Strategy
(low cost)
Focus
Strategy
(differentiation)
It is suggested that without disturbing existing market channel of F&V market, a new market channel
should be explored for high quality apple of GBC and associate a brand name of geographical identity with
it. The high quality apple with a brand name will a differentiated product in marketing terminology hence
could get access to high end market. In this scenario the super markets and chain stores are the said to
be high end markets. Once a differentiated product reaches to ultimate consumer, the chances of securing
band loyalty increases. Therefore, it is recommended that two option suggest belwo should be discussed
in the HVCP.
1. working for improving existing Apple VCP of F&V Market (Subzi Mandi)
2. Developing a new value chain for a differentiated Apple with a brand name for a narrow segment
of High End Market.
In case of approval of option 1 by HVCP, stakeholders design a strategy to develop the capacity of existing
VC operators through Skill Development Programme for existing VC operators as the youth has shown low
interest to work as market operator in the existing VC system.
In case of selection of option 2 by HVCP for developing an Apple VC with a differentiated product, it is
suggested to launch two tailor made programmes for youth as mentioned below:
63
1. Customized Entrepreneurship Development Programme to develop new operators in the Apple VC
2. Community bases Skill Development Programme by a down country market based service providers
A brief strategic guidelines and proposed action plans have been provided for entrepreneurship and skill
development programmes below.
64
5.4.3 Strategic Guidelines for Entrepreneurship Development Programme
A tailor made result oriented Entrepreneurship Development Programme with aim to support youth to
become Apple VC operator should be launched at Core Office level in collaboration of Karakoram
International University. The target should be:
i.
ii.
iii.
iv.
v.
Youth with interest and has knowledge of Manufacturing of Packaging (card board packaging)
Youth interested in Transport Business for Fresh Fruits
Youth having interest in trading of apple in high end markets
Youth with interest in developing pack house/grading facility for apple
Youth with a plan to start a processing business of pulp/puree and nectar/juice
The KIU may be considered to give a 15 days class room training on Business Management and
Entrepreneurship training to 20 youth with focus on how to start and manage a business. After
completion of class room training the youth will be placed in a business that matches with planned
business of each youth. These kinds of business are not available in GBC therefore AKRSP and other
stakeholder should arrange placement in down country prior to starting the training.
Interested youth to start a missing business in VC should be selected through transparent selection
process. Selection criteria must be developed in the HVCP involving all stakeholder of Apple VC. The
criteria must include financial standing of the interested youth as the success of this programme will be
measured on the basis of actual businesses started at the end of programme. At is expected that 50% of
youth trained in the programme will start their own business. The action plan and timeline is given in the
table below:
Action Plan and Timeline
S.#
Activity
1
1
2
3
4
5
4
5
6
7
8
2
3
4
5
Months
6 7 8
9
10
11
12
Identification and Selection of youth
Identification of Service Provider
Capacity Assessment of Service Provider
Capacity building of service provider if needed
Delivery of Training
Arrangement for placement with down country
businesses
Placement with down country businesses
Provision of financial support by ARKSP as token
of incentive and risk sharing
Start of Business
Support by other stakeholder (ASF, DOA)
Monitoring
Budget
65
The cost implication of this programme has been detailed below:
S.#
Activity
Type of Unit
1
Advertisement of EDP
News paper
2
2
Capacity Building of service provider (if
needed)
Training Manual Development
3
Trainers Fee
Service
Provider
Training
Manual
Days
4
Training hall charges
Days
5
Refreshment and lunch
Days
6
Stationary
Lump sum
7
Travel Cost of trainees to down country for
placement and Back
Daily Allowance during placement (20 trainees
X 2000 per day)
Trainees
8
Days
Units
3
Unit Cost
(Rs.)
Total Cost
(Rs.)
10,000
30,000
1
100,000
100,000
1
100,000
15
100,000
15
15
1
20
30
100,000
150,000
3,000
45,000
1,000
15,000
15,000
15,000
10,000
200,000
40,000
Total (Rs.)
1,200,000
1,855,000
It is expected that after graduating from entrepreneurship training and returning from placement 10
trainees will be able to start their own Business es. AKRSP should provide a financial support to these
entrepreneurs as token of appreciation and risk sharing grant to help them raise working capital during
initial vulnerable stage of business. The suggested amount is Rs. 300,000 per business. 10 businesses will
cost Rs. 3000,000 (3 million rupees)
The entrepreneurs once start their business should be linked to ASF and DoA-GB for grants for scaling up
of their business. Currently ASF with support of USAID has mandate to support these kind of business in
Horticulture sector. DoA-GB is also coming up with a matching grant support entrepreneurs in
Agribusiness.
Expected Result
The expected result of this activity should be initiation 5 types of startup businesses in three regions of
AKRSP.
i.
Manufacturing of Packaging (card board packaging)
ii.
Transport Business for Fresh Fruits
iii.
Trading Business of apple to high end markets
iv.
Pack house business/grading facility for apple at apple production areas
v.
Apple processing businesses
66
5.4.4
Strategic Guidelines for Community based Skill Development Programme
To differentiate GBC apple, intervention right from the field level is suggested through imparting technical
skills of picking, grading, waxing, polishing and packing to the youth to bring consistency in graded apple
in term of quality to target high end market. (Currently filled with mainly imported apple from China and
EU countries). The youth must be trained on international standards to penetrate into national high end
markets, the export standards have been summarized in the box below for reference.
Box 1
General International Standards for Apple
Minimum quality requirement
Practically free from pests
Sound (rotted or deteriorated product is excluded)
Clean (practically free from any foreign matter)
Intact
Free from damage caused by pests
No abnormal external moisture
Free of any foreign smell and / or taste
Carefully picked
Classification of Apple
Extra Class: Superior in shape, size, coloring and the stalk must be intact.
Class I: Flesh must be perfectly sound. However slight defects in shape, development, and coloring
allowed.
Class II: Flesh must be free from major defects. However defects in shape, development, and coloring allowed.
Sizing
Uniformity
Product must be of same origin, variety, quality, size and degree of ripeness
For “Extra Class”, uniformity also applies to coloring
Visible contents must be representative of the entire contents
Packaging
It should protect the quality of the product
It must be new and clean
Printing or labeling should be done with non-toxic ink or glue
Presentation
“Extra Class” fruit must be packed in layers.
European Communities Extra Class I Class II
 Large Fruit Varieties 70 mm 65 mm 65 mm
 Other Varieties 60 mm 55 mm 55 mm
Other Countries Extra Class I Class II
 Large Fruit Varieties 65 mm 60 mm 60 mm
 Other Varieties 60 mm 50 mm 50 mm
The packing of apples are carried out as per requirement. Mostly apples are packed in 5Kg and
10Kg (corrugated carton packs) for each variety of the graded fruit.
Source: Pre-feasibility Study Apple Processing Unit,BAL-PREF-19/November 2009
67
The apple flow chart destined to export market is presented below to understand the key value addition
steps at different stages:
Figure 10: Apple flow Chart
The skilled development programme should have two phases:
Phase 1: Training of youth through down country service provider to create local service providers
(ToT) in Apple VC
Phase 2: Training of youth through newly created local service providers (as a result of phase 1) to
develop skilled labour force in GBC
.
68
In the first phase training to local youth to become service providers (Local Trainers) in Apple VC
through a well-known service provider of skill development of Horticulture from national market like
STAR FARMS.
In the second phase, avialing the services of these newly developed service providers, a skilled force
should be developed in the apple production areas. The first training of these newly developed local
service providers should be subsidized to help them in developing good will in local market as service
provider
Action Plan and Timeline
S
Activity
.
1
#
1 Identification and Selection of youth to become
2
3
4
5
6
7
2
3
4
5
Months
6 7 8
9
10
11
12
local service providers to give trainings of picking,
grading, waxing and packaging
Identification of skill development service
provider from down country
Developing Master Trainers/( Developing new
service providers)
Training of youth in selected apple production
areas using the service providers (Master trainers)
Linking the trained youth with Pak house/grading
places
Linking the train youth with the Apple traders
Monitoring
69
Budget
The cost implication of this programme has been detailed below:
S.#
1
4
5
6
7
8
Activity
Hiring of Service providers from Down Country
through service Providers from national market
Developing new service provider (ToT ) [(Training
Material, Meal and Refreshment during training (10
trainees X Rs 1000 per days)]
Travel of trainees to down Country and back
Daily Allowance (10 trainees X Rs. 2000 per day)
Short training on quality control at national market/
at buyer side
Training of youth in selected apple production areas
through newly developed local service providers
Type of
Unit
Units
Days
10
Unit
Cost
(Rs.)
10,000
Total Cost
(Rs.)
100,000
Days
10
Trainee
Days
Days
Trainee
10,000
100,000
10
7
6,000
20,000
60,000
140,000
5
10,000
50,000
5,000
Total (Rs.)
600,000
1,050,000
120
.
70
5.4.5 Strategic Guidelines to Support to Input Supplier including Apple Nurseries
To strengthen weak input supply particularly pruning equipments, pesticides, spray machines and
improved marketable variety apple rootstock it is proposed that the existing Gilgit, Skardu and Chitral
based inputs supplier should be supported to increase their outreach to the apple production areas by
opening their franchise businesses . This franchised businesses should be managed by youth duly trained
through record keeping and inventory management training organized by AKRSP in collaboration with
KIU and having completed placement with the franchiser for a month. The franchisee get the input
supplies from the franchiser on cash bases and pay an agreed fee per on the top of invoice amount of the
supply. AKRSP should provide one time matching grant of Rs. 30,000 to the youth (franchisee). The
franchisee refurbish the stock on cash payment on regular basis to maintain the inventory with cushion
period keeping in consideration the fragile road infrastructure to their respective area
Similarly the existing nurseries in Gilgit, Chitral and Balitsan should be evaluated and supported to improve
their rootstock base or import the new rootstock of marketable varieties from Swat or Baluchistan on
need basis. These existing nurseries should be linked to the input supplier of the apple production areas
to sale in the planting season on commission basis or profit sharing basis.
Action Plan and timeline
S.#
Activity
1
1
2
3
4
5
6
7
8
2
3
4
5
Months
6 7 8
9
10
11
12
Identification and selection of Gilgit, Baltistan and
Chitral based input supplier on the basis of
carefully developed criteria
Dialogue with the input supplier for opening
franchises in apple production areas
Dialogue with KIU for delivery of customized
record keeping and inventory management
training to youth
Delivery of Training by KIU
Placement with the Franchiser
Matching grant to youth
Start of business
Monitoring
71
The cost implication of this programme has been detailed below:
S.#
1
2
3
4
5
6
Activity
Development of training manual
Trainer Fee
Refreshment and Stationary (15 trainee X Rs.1000 per
day)
Travel and Daily Allowance for trainee for 10 days KIU
training and 15 days placement (15 trainees X Rs. 2500
per day)
Matching grant to youth
Monitoring
Type of
Unit
Manual
Trainer
Days
Units
1
1
10
Days
Trainee
Days
Unit
Cost
(Rs.)
50,000
25000
Total Cost
(Rs.)
50000
25000
15000
150000
37500
937500
30,000
10,000
Total (Rs.)
450000
50000
25
15
5
1662500
72
CHAPTER SIX: CONCLUSION AND WAY FORWRD
The comparison of the proposed activities in this study to address the constraints in the apple VC with
EELY Programme activities revealed that EELY programme has amicably comprehended the needs of
Horticulture Value Chains and has designed appropriate activities and sub activities to address these
needs, however some modifications may be required at activity and sub activity level to make them
customized for the Apple Value Chain get better result. In the recommended action plan, the relevant
activities of ELLY Programme have been consolidated under one broader programme as mentioned in the
table below:
EELY Programme
Output
1.1.2: Existing and new
skills development
services for young men
and women
strengthened, based on
labour market analysis
Activity/Sub
Activity
Activity
1.1.2
Sub Activity
1.1.2.3
Activity
1.2.2
Output 1.2.2
Sustainable and youth
appropriate support
services and products
provided
Sub Activity
1.2.2.1
Sub Activity
1.2.2.2
Sub Activity
1.2.2.3
Description
Strengthen existing and new skills
development services for young men
and women, based on labour market
survey
Support community-based youth
accelerated skill development
Programme
Provide sustainable and youth
appropriate support services and
products
Support Lead enterprises in selected
value chains
Sub activity (1.2.2.2): Support
innovations in value addition
(certification, standardization,
practices)
Sub activity (1.2.2.3): Support
interventions in selected value chain at
product, process and market level
Recommended Activity
Under VC Action Plan
Description
5.4.4 Community Based
Skill Development
Programme
5.4.3 Entrepreneurship
Development Programme
5.4.4 Community Based
Skill Development
Programme
5.4.5 Support to Input
Supplier including Apple
Nurseries
In each recommended activity, EELY programme has a major role to play, however, the other
stakeholders; ASF and DOA-GB may also provide support to the selected VC operator at different level
particularly the matching grant support for machines and equipments. There seems to be no solution to
address the financial needs particularly the working capital requirement for youth as the Financial
Institution are reluctant to provide finance to startup businesses. The leveraging could however help to
reduce financial burden on youth to some extent.
73
The customized Entrepreneurship Development Programme and Skill Development Programme with a
package of incentives will help the youth to explore the new value chain destined to high end market will
help in strengthening the job market for skilled youth and will provide self-employment opportunity to
young men and women of GBC. The export off Apple to down country will help stabilizing of GBC economy
by influx of money from down country market.
74
6 ANEXURES
6.1 Annexure – I: Check List for Apple Value Chain Analysis
Information Required:
1.
Major pockets/areas of Production
2.
Key local markets
3.
Total area and production and Important varieties of apples
4.
Demographics information
5.
History and comparative advantage of the area? What are the agro-ecological/demographic
advantages?
6.
Average farm size or number of tree per owner;
7.
Number of producers (farmers, micro entrepreneurs, households, SMEs) involved;
8.
Total number of people involved including women and poor and out of this how many are
self employed, how many work for others;
9.
Average size of investment per enterprise/household;
10. Average income from the business per household/business;
11. Size of businesses and their numbers throughout the value chain (i.e. input suppliers,
producers, processors, traders and sales outlets);
12. Process flow chart of the business (showing production flow how product moves through the
input, production, processing to consumption level);
13. Cropping cycle – Gantt chart
14. Detailed economics of production and marketing in the flow diagram from farm to market;
15. Value added at different stages of production processes in terms of Rupees;
16. Description of the major markets. Who buys from farmers/producers, where are they sold;
17. Description of the competitors for the business (specific to that location) both national as
well as international;
18. Current policies/incentives from the government to promote this value chain;
19. Presence of stakeholders and their roles: common interest groups such as business
association, cooperative, self help group etc. and their role in chain governance;
20. List of government ministry and departments responsible to support/facilitate the VC and
their roles/functions and status of services;
21. Sources of finance/credit, mark up and constraints;
22. Existing service providers in the project location and what kind of services are they providing
(both private as well as public sector);
23. Potential impacts (outreach, employment generation and income earning);
24. Listing of key constraints and opportunities in the form of SWOT;
25. Paired ranking of the constraints for prioritization;
26. Quantification of losses/wastes and distortions – absolute or percent (poor pre and post
harvest management, transit losses, absence of cold storages, absence of processing facilities,
import competitions or cost of doing exports, high costs – fuel, lack of improvements etc.);
75
6.2 Annexure – II: Check List for Market Assessments
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Total number of agents dealing in horticulture commodities;
Status of the market (private, public/ regulated, non-regulated);
No. and types of market agents dealing in apples;
Total employment generated in the market and those created by apple value chain;
Approximate quantity (per annum) dealt by each agent;
No. of exporters and quantities exported and time of the year;
Quantity imported every year and time of the year;
Important export destinations;
Important import sources;
Trends in supply, exports and imports;
Important local markets that are supplied by this market (inter-market trade);
Important local markets that send supplies to this market;
Preferred varieties in domestic and export trades and for processing;
Demand characteristics (size, shape, size, packaging) requirements;
Supply sources and their supply seasons (supply calendar with volumes and prices) by variety;
Existing pack sizes and packaging types;
Pricing mechanisms;
Market charges and costs (market entry, commission etc.);
Market channels and pricing structure;
Infrastructure and facilities (cold storage, holding sheds, auction sheds, parking, weighing
bridges, water supply, sanitation, electricity etc.);
21. Institutional services; and,
22. Marketing constraints and opportunities for domestic and export trades;
76
6.3 ANNEX III Questionnaire A
To get information about apple value chain through focus group discussions at different LSOs of
Gilgit Region
Information required
Number of respondents (men/women)_______________________(respondents must be
apple producers, processors, mediator or agent, trader)
Date___________________________
Q1 How many apple varieties are available and since from how many years they are growing
these varieties?
Q2 Who has introduced above varieties for the first time in this area?(Govt. sector, or NGO)
Q2 Apple trees are grown randomly or in managed orchard?
Q3What kind of Farm Inputs is used for apple production? (Root stock, Fertilizer, Pesticide)
and from where they got these farm Inputs? (Govt. Nursery, Private Nursery, provided by
NGO)
Q4Have they got any training for apple management practice (grafting, budding, and
pruning, spraying)
Q1 Marketable fresh apple varieties produced in the
area________________________________
1.____________________________ Annual production (est.)________________________
2.____________________________ Annual production (est.)________________________
3.____________________________ Annual production (est.)________________________
5.____________________________ Annual production (est.)________________________
6.____________________________ Annual production (est.) ________________________
Q5 What is the picking season of each variety (highlight the peak months)
Q6 Among the above mentioned varieties which one is considered the good quality apple to
be sold in the local, national market and international market?
Q7 Main problems faced in the production of different varieties of apples?
Q8 Which variety of apple can be stored for off season sale?
Q9How the apples are stored (traditional way (explain) or new technology is introduced
Q10 Is any cold store facility available there?
Q11 How much percent of the total production of apples are sold in the local market of
Chitral (estimation)
Q12 How the different varieties of apples mentioned above are marketed (note: producer
means farmer)
Producer to customer
Producer to retailer
77
Producer wholesaler
Producer to commission agent
Q13What are the main problems faced in making deal with the above selected mode
Q14 How much percent of the total production of apples are dried?
Q15 Have they received any training for apple Processing (Value addition) and post
harvesting for agriculture department or NGO?
Q16 How much percent of the total production of apples are processed for juices and for
other purposes like making vinegar in the local market of Chitral (Are such processors are
available in the local market if yes, then get details)
Q17 How the products are packaged (at producer, wholesaler, retailer or agent’s level)
Q18 Do young women involved in the production, process and market level of apples?
Q19 Are there vendors available in the local market of Chitral who can provide packaging on
demand?
Q20 How the prices of different varieties of apples are set?
Q21What is the mode of transportation? (Also highlight gaps in the transportation)
Q22 Per kg price of each variety of last
year_____________________________________________
Q23Est per kg price of each variety for this
year_____________________________________________
Q24 How much percent the prices changes when apples are stored and sold in off season?
Q25 What are the potential markets in the down districts? (Rawalpindi, Lahore, Faisalabad,
Gujran wala etc)
Q26 Which variety of the apples have been exported (country name if any)
Q27 List down the details of producers, wholesalers, retailers, agents to whom the project
required intervention by identifying their constraints/gaps.
Q28 What would be the best tier (i.e. production, process & market level) where young men
and women can get maximum benefit in terms of employability or business set?
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6.4 Annex IV Questionnaire B For Determination of Marketing cost of Apple
Name of Data collector_______________________
Date:
________________________
Profile of the Trader
1. Name____________________ 2. Contact No__________________________
3
4
5
S.NO
1
2
3
4
5
Address_____________________ 4. Business Name____________________
Starting Year of business _______________________
Particular
Unit
COST OF INPUTS
Cost of fruit
Cost of packaging material
Fruit picking charges
Grading & packing charges
Labor charges for transportation
from field to assembly centre
6
Transportation charges from
assembly center to market
7
8
Market Fees (Commission etc)
Other Miscellaneous charges
Total
OUTPUT
Sale price
NET INCOME
Unit Cost (RS)
Percentage
Major Problem and Issues:
 _______________________________________________________________
79
6.5 ANNEX IV FOCUS GROUP DISCUSSIONS
Focus group discussing was held at different Target LSOs in Three Districts (Gilgit, Ghizer, and
Hunza-Nagar) of Gilgit region. The list of person met in FGD is given below.
1. DISTRICT GILGIT
Focus Group Discussion – Name of Producers, Traders, Mediators at Danyore LSO
S.No. Name
1
Raza Baig
2
Hakim Shah
3
Wasim Karim
4
Miss Chand Aziz
5
Amir Baig
6
Mohd-Amin Khan
Focus Group Discussion – Name of Producers, Traders, Mediators at Bagroot
S.No.
1
2
3
4
5
6
Name
Mohd Amin
Ali Noor
Mohd-Hussain
Hussain Ali
Muhammad Ali
Kifayat
2. DISTRICT GHIZER
Focus Group Discussion- Name of Producers, Traders, Mediators at Singal LSO
S.No. Name
1
Mayoon Khan
2
IbrahimShah
3
Niat Ullah
4
Shah Rais Khan
5
Nadir Khan
6
Jahangir
80
Focus Group Discussion – Name of Producers, Traders, Mediators at Ghakuch LSO
S.No. Name
1
Langar Shah
2
Amur Baig
3
Mayun Khan
4
Yadgari
Focus Group Discussion – Name of Producers, Traders, Mediators at Gupis LSO
S.No. Name
1
Syed Maraj
2
Syed Bhurhan uddin
3
Haji Murad
4
Mashroof
5
Essa Maddad
6
Kushwali
Focus Group Discussion – Name of Producers, Traders, Mediators at ChaturkhundLSO
S.No. Name
1
Shukoor Khan
2
Wazir Nagar
3
Mehr Ali
4
Syed Paidiash Shah
5
Allah Maddad
6
Raja Nazim
Focus Group Discussion – Name of Producers, Traders, Mediators at Taus LSO
S.No. Name
1
Mir Alam
2
Syed Rahim
3
Saleem
4
Sharifa
5
Mohd Qasim
6
Shukoor Khan
81
3. DISTRICT HUNZA-NAGAR
Focus Group Discussion – Name of Producers, Traders, Mediators at Hyderabad LSO
S.No.
1
2
3
4
5
6
Name
Imdad Ali
Lal Baig
Bulbul Jan (Shahabad)
Farman Ali
Tawaloot shah
Bulbul jan(center)
Focus Group Discussion – Name of Producers, Traders, Mediators at Nasir abad LSO
S.No. Name
1
Didar karim
2
Ali Dad
3
Farman Ali
4
Dido Khan
5
Babar Khan
6
Mola Maddad
Focus Group Discussion – Name of Producers, Traders, Mediators at Skindarabad LSO
S.No. Name
1
Ramazan Ali
2
Ferdos Ali
3
Ali Gohar
4
Abdullah
5
Najad Ali
6
Mohd Arif
Focus Group Discussion – Name of Producers, Traders, Mediators at Garlith LSO
S.No. Name
1
Gulam Qadir
2
Nadir Aman
3
Abdul Raziq
4
Akbar Khan
5
Sadiq Ali
82
83