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%
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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
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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