Fruit Value Chain

From January to June 2019, in partnership with Swisscontact, our McGill research team helped build the capacities of local support services and rural SME’s in the areas of resource-efficient technologies. As part of the project “Opportunidades Rurales” a survey was conducted in the dry corridor in Choluteca, Honduras looking specifically at the fruit value chain for the most common fruits produced in the area. The rationale of this survey relied on the necessity of doing a diagnostic about critical issues inside the fruit value chain in the region.

The development of a sustainable fruit value chain is an efficient strategy to bring people out of poverty in developing countries. Given that a food value chain is a complex system, if the economic performance of the chain is to be improved, it is crucial to first make a diagnostic about the current state of the value chain and spot what activities or elements in the chain need improvement.

Methodology Employed

Sets of questions were designed and organized to collect information about specific areas inside the fruit value chain. The survey was developed into a web application by our McGill research team and used to survey 380 fruit producers in the dry corridor in Choluteca. The municipalities where the survey took place were: –

• Orocuina
• Pespire
• Santa Ana Yusguare
• Marcovia
• Liure
• Soledad

General Aspects of the Producers

50.4% of producers surveyed knew how to read and write having attained a basic level of education and probably having not finished elementary school. Only 6.33% of the producers had a high school education while only 1.32% had a higher education. In addition, the producers with less education also showed a tendency for less income generation.

Economics

The lack of economic resources from the producers was also evident when they were asked about potential savings. Most of the producers (85.79%) reported that their monthly savings were less than 1,227 lempiras. The access to credit, a critical component of every value chain since it is a way to introduce financing into the chain when it is necessary, showed similar results with 69.47% of the producers having no access to credit.

Production and Costs

An essential requirement for expanding the market of fruit relies on having the capacity to establish consistent and regular supplies for the different markets. Generally, there are four core activities in a fruit chain: –

• Production
• Aggregation
• Processing
• Distribution

A critical step in fruit chains formed by small-scale producers in developing countries is aggregation, which is the capacity to gather the fruit of different producers together. The principal challenge of this activity is to efficiently gather small volumes of fruits produced by widely dispersed producers and concentrate it for more important markets. Additionally, certification is an important aspect to consider for extending the market of the fruits produced in the value chain.

Transportation seemed to be a big challenge because of various specific situations that affected the producers. One such situation was the long distances that needed to be covered to transport the fruit. The characteristic of the terrain where the fruits were cultivated, similarly represented a challenge which added to transportation costs.

The purchase of supplies necessary for production activities also represented a considerable cost for producers. The following are examples of these costs: –

• Seeds
• Fertilizers
• Insecticides
• Containers
• Sacks
• Baskets

Thus, it was recommended that future interventions needed to have a direct effect on the cost implications that were highlighted here. For instance, given that transportation had a high-cost implication, producers could have benefited greatly from interventions addressing transportation infrastructure for the producers.

Keeping fruit diversity was an important aspect that needed to be considered since cultivating only one type of fruit on a farm is a potential threat to resilience. The recognition and introduction of a variety of weather-resistant local fruits was recommended as a crucial strategy to help keep fruit diversity, resilience, food safety and sustainability among the community of producers in the dry Choluteca corridor.

Post-harvest Losses

Post-harvest losses have a high impact on the economy of the value chain. The generation of losses through the post-harvest stages such as fruit collection, storage, transportation and handling were well known. Moreover, it was well known that in developing countries, most of the losses are generated in the post-harvest stages. Frequently, this is because of the limited knowledge about post-harvest management and the lack of technical information about how to avoid losses.

Weather conditions were found to be the leading cause of post-harvest loss generation among the producers. This could have been a consequence of weather changing conditions, usually seen as excessive rainfall or excessive drought. The reduction in water resources could also have been a consequence of weather conditions with the lack of irrigation and extreme weather pushing fruit trees to move into a state of stress where the development of acceptable fruit attributes for the market such as flavour, size, colour and texture are compromised.

At the time of this survey, fruit producers around the world were facing the consequences of extreme weather conditions during the last years. This problem continued and will continue for years to come, affecting the quality and quantity of the fruit produced. Thus, it was recommended that marketable and nutritious fruits be identified which showed adaptability to extreme weather in order to develop resilience. These could be local fruits or newly introduced fruits showing good adaptation in the region. In addition, these fruits demand low water usage compared to water-intensive fruits, with the quality of the fruits unaffected by extreme weather conditions and the fruits quickly adapting to soil conditions.

The lack of appropriate storage was the second most important factor affecting the generation of losses among the producers surveyed. The lack of a proper place to store fruit can considerably accelerate fruit respiration leading to the loss of the necessary attributes for the market and thus, generating a considerable amount of waste.

Recommendations

Based on the results of this survey, several recommendations were made whose final goal was to produce fruit that would be acceptable in different markets and thus, increase the economic performance of the value chain. These recommendations included:-

1. The organization of cooperatives or groups of producers at the different municipalities for the aggregation of fruit and the generation of supply capacity and quality.
2. Any intervention planned for the fruit value chain needed to have as a final goal the expansion into new market. In order to achieve this, the intervention roadmap needed to be established with the following short-term objectives: –
   • The improvement of the quality of the fruit produced
   • Aggregate production
   • The design of a market strategy
3. Strategies needed to be focused on developing resilience in fruit chains by the introduction of more varieties of fruits resistant to extreme weather conditions.
4. The development of strategies for post-harvest added value for fruits such as mango and lime
5. The optimization of post-harvest, cooling and processing activities to preserve optimal shelf life.
6. The identification of current policies, service providers, marketplaces, associations and their influence (negative or positive) in the fruit chains.
7. The investment in infrastructure and assistance for meeting quality requirements for mango, lime and avocado as well as establishing links between fruit producers and foreign buyers.
8. The use of the mango market to explore fruit producers from other countries in order to complete fruit demand.

APRAL Fruit Life-Cycle & Eco-Efficiency

Given that attaining environmental sustainability in the dry corridors of Honduras is essential for the long-term sustainability, considering the severe rate of degradation.

Sustainability indicators are key elements to evaluate the performances of food systems with the enhancing of operational efficiency in addition to the components of sustainability necessary. Therefore, eco-efficiency as a resource-based sustainability approach, offers a comprehensive approach to this development.

In this component of the project, the results of an eco-efficiency evaluation based on a model developed by McGill were presented. The model evaluates different decision-making units (DMU) based on their eco-environment performance and operational efficiencies. Overall, the report provided data for informed management’s decision and policy for competitive advantage in the marketplace while helping APRAL to achieve their corporate social responsibility.

The eco-efficiency model developed by McGill satisfies the three components of sustainability, which are economics, environmental and social. The model has three major components that assess three different areas including: –

• Environmental assessment using Life Cycle Analysis (LCA)
• Economic assessment using Life Cycle Costing (LCC)
• The food system operational efficiency using Data Envelopment Analysis (DEA)

The overall results showed that APRAL’s current activities do not present a serious threat to the environment.