PROFITABILITY OF SCHEMES

In the final analysis any export horticulture business, whether based on smallholder producers or on large-scale commercial production, will only survive if the profits generated give a satisfactory return to the people operating at all positions in the supply chain - growers, buyers, packers, exporters, distributors and retailers. And buyers will only source fruit and vegetables from small producers rather than large-scale growers if their profits are increased, or at least not reduced, and if their exposure to risks is not significantly affected by this choice.

Assessment of the profitability of a horticultural business proposal requires consideration of a wide range of issues. The details vary greatly from commodity to commodity, location to location, market to market and year to year, so it is not easy to make useful generalisations. However, there are certain common features of profitability assessment which must be addressed in every case. These include investment, financial risk, added value, profit calculation and profit distribution.