AGROPORT East Kharkov 2016: Growing niche vegetable crops in eastern Ukraine (Kees Koeleman)

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Growing niche vegetable crops in Eastern Ukraine challenges and opportunities

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Growing niche vegetable crops • An opportunity to diversify farming – Risk spread  different markets – Sustainable business model – On the mid-term improvement financial performance

• Better usage of available resources • A challenging road to total farming and more satisfaction 2


Revenue Split Cash crops

Vegetables

8% 19%

92%

2%

81%

4%

27%

73%

33%

67%

6% 8% Used area for vegetable farming

40%

60%

10%

3


Revenue development 160

150

Index

140

130

120

110

100

90 2%

4%

6%

8%

10%

Used area for vegetable farming 4


Growing niche vegetable crops • New trends and developments in European markets • What does it take to be competitive in today’s consumer goods markets • Value chain • Business planning – Possibilities – Workforce – Land selection – Land preparation – Crop selection – Financials • Route to vegetable farming • Adding value to the fresh produce • Route to Market 5


New trends and developments in European markets • Convenience – Semi prepared – Serving size

• Attractive packaging • Freshness • Reliable – Quality – Supply 6


Be competitive in today’s consumer goods markets • Consumer focus – What are the consumers needs – Why does the consumers have the needs

• Route to the market – logistic chain – Cold chain

• Efficient and market orientated production 7


Traditional to convenience

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Traditional to convenience

9


Value chain Actors

input suppliers

producers of fresh vegetables

packing and cold storage

distribution to the market

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Value Chain improvement • Implement consumers values – Prioritizing – Realistic now and in the future

• Draft a plan how to implement value chain improvements with all the actors • Add value to the products where the consumer is willing to pay for

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Business planning / possibilities • • • •

Vegetable growing is labour intensive! Available workforce in which period Quality of the land Target 10% of the land for vegetable growing  surface need 20%. Crop rotation a must. • Select the best 20% of the available land; vegetable growing nutrition consumption is high. 12


Business planning / Workforce • Workforce planning is crucial • For 10 hectares vertical growing of green beans you need 20 people. Daily harvesting and maintenance • Make a good growing/harvesting plan with the different vegetable crops inline with the available people • Garlic growing and storage gives a possibility to use the people in the off season 13


Business planning/ Land selection • Identify 20% of the available land – Best quality – Water source for irrigation – Logistic optimal for workers and storage facilities

• Test the selected surface on quality; nutrition's, PH etc. • The selected land in combination with the test results connect it with the vegetable growing plan 14


Business planning Land preparation • Fertilizer need calculation – Test results

Selected vegetable

• Land preparing; make the soil ready for sowing/planting on time. • Make the borders and entrance of the land clean from weed before and during cultivation at all times. • Plan the irrigation; drip or spray 15


Vegetable crop selection • Selection depends on – Customer needs – Technical feasible at your farm – Crop rotation possibility

• • • •

Select a few crops and specialize Long and short duration harvesting Early/medium/late vegetable varieties Select vegetables were you as famer have affinity with. Must be a realistic choice 16


Financial results • Make a 5 year plan and grow gradual • First year investment is depending on – Investment to improve soil quality – Special equipment for vegetable growing and harvesting.

• Grading, packaging and storage investments • After the 1st year Capex and Opex needs for the next year out of free cash flow. • After 3 years a sustainable financial performance of your farm is possible 17


Route to vegetable farming • Do it in steps with a long term planning • Do not under estimate the Capex and Opex • Multi usable of equipment, same ( little adjustments) planting/harvesting/spraying equipment for different vegetable crops. • Implement Good Agriculture Practice and go for Global GAP certification • Educate the people and do not estimate the different mind-set of vegetable growing to cash crop farming. It is intensive farming! 18


Seeds or Seedlings • Direct seeding  low input cost - Irregular growing - Germination • Seedlings more expensive • Better root development • Less usage needed of pesticides and fertilizer  environmental gain 19


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Yield • In average the vegetable yield in the Ukraine is 40% less than Western Europe! • How to catch up – More professional cultivation – Farm hygiene awareness – Fertilizer is not a cost but an investment – Discipline in the field 21


Adding value to the fresh produce • Careful harvesting and post harvest handling • Appearance of the vegetable • Cool storage to improve shelf live • Packaging • Portioning

• Acidifying cauliflower and green beans by osmose  shelf life till 10 months 22


Route to market • Identify all actors from farm to consumer • Qualify all the actors on their added value component  Is the consumer willing to pay for it • After the above assessment, select your partners in the chain – Reliability – Technical, cool chain security and efficiency – Financial 23


Route to market • “Be embarrassed of your first delivery when your customer is happy” • Continually improvement of your performance • Establish a solid and sustainable local market • Expand step by step to major vegetable markets in the Ukraine 24


Route to market • Explore export possibilities, first neighbouring markets. • Identify all actors and their needs • Develop step by step the possibilities • Don’t build your business on spot opportunities in the export market • Don’t destroy existing business relations by spot businesses 25


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Thank You 27


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