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HOME > Elements for Successful Business > Profitability of Schemes > Added Value > Case Study: Export of Vegetables from Zimbabwe and Kenya | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Farmers' interest in horticultural export markets is stimulated by the generally higher prices paid compared to local market prices, and by the fact that international markets are less subject to periodic gluts which can drive prices down to uneconomic levels. However, as demonstrated in the following table, farmers usually receive only a small proportion of the final price paid by consumers in European supermarkets. In Zimbabwe in 1998, according to one study, commercial growers received only 11.9% of the consumer price. In Kenya the figure was 14.1%. Smallholder producers probably received an even lower proportion. Supermarkets retain by far the largest share (45.9%), but this includes 13.5% for losses from unsold stock. Exporter and importer costs also include an element to cover losses in transit. If these losses are deducted from the end price, the growers actually receive a significantly higher proportion of the consumers' spending. Nevertheless, there is an overpowering case for measures to return to the producers more of the value added between the farm and the supermarket. Fair trade companies which deal in commodities like coffee, tea and cocoa have achieved much in this respect; some are now beginning to look for similar opportunities in horticultural trade.
Source: HARRIS-PASCAL, C, HUMPHREY, J and DOLAN, C: Value chains and upgrading: the impact of UK retailers on the fresh fruit and vegetables industry in Africa. Report of the Trade and Enterprise Programme, Institute of Development Studies, University of Sussex, 1998.
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Natural
Resources Institute 2003
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