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Guinea used to be one of the world’s top producers of pineapples, accounting for a fourth of global export volumes in the 1960s, before rapidly declining to practically no exports in the 2000s. The crop has great potential because of the strong demand for pineapples on both international and regional markets. I had the honor to support our long-term partner IDH (The Sustainable Trade Initiative) on two pineapple Service Delivery Model (SDM) case studies in Guinea. Together with Kebba Colley, Yvonne Achieng, and Laura Taal from IDH, and my colleague Victor Dagnelie, I travelled to Guinea and collected the necessary data to identify the kind of services that are needed to effectively strengthen the business case for pineapple farmers in Guinea.
At this stage, the Guinean pineapple sector is unable to compete with other major producers in the conventional pineapple market: Costa Rica is controlling the market with the superior MD-2 variety, and while West Africa boosts shorter sea freight transportation times to the EU (10–15 days compared to Latin America’s 16–20 days), sea freight is relatively cheaper from the regional neighbors Ivory Coast and Ghana compared to Guinea.
However, Guinea can benefit from a competitive advantage in niche markets. Due to its geographical location, Guinea can excel in the export of air-freighted fresh pineapples, which can be delivered to the EU within 24 hours, thanks to direct connections of passenger and cargo flights. Air freight connections between the EU and Latin America are more complex and often require stops or re-loadings, which extend delivery times. Additionally, distances are longer and CO2 emissions are higher. Other niche market opportunities include the production of organic or Fairtrade pineapples. Moreover, Guinea is in the process of obtaining Geographical Indication for its indigenous variety Baron Rothschild, soon allowing the country to market its own unique variety, if it can overcome the hurdle of inconsistent quality and comply with strict buyer requirements.
Figure 1: Guinean share of world export volumes, 1968-2016
Meanwhile, the sector is facing a multitude of issues. At farm-level, production is impeded by inefficient cultivation practices generally producing pineapples of a low quality and, due to the season lasting 18 months (24 months including the required six month fallow period ), farmers are facing serious cash flow issues limiting their purchase of farm inputs. Farmers also seriously lack ratoons (shoots) and available land to increase production. Producing pineapples under optimal conditions is furthermore very labor-intensive requiring 450 man-days/ha annually (an average farmer currently uses 125 man-days/ha) which limits farmers’ capacity to expand production without acquiring substantial labor costs. The national production volume is limited to around 10-20,000 metric tons while local fruit processing and exports on international markets are practically non-existent.
The enabling environment does not effectively support companies to enter the market and operate freely. Guinea is currently performing below regional standards for most dimensions of customs activities. Conakry is the most expensive port in the region as port charges in Conakry are higher than other West African ports, making shipping of fresh pineapples uncompetitive. Infrastructure (particularly road infrastructure) is in a dire state and access to land and legalization of land rights is a major hurdle for new investors and farmers looking to expand production areas. These are just some factors impeding investments into the sector. At the same time there is a clear ambition by the government to turn the sector back around. In January 2017 the then-Prime Minister of Guinea introduced his initiative to revive the Guinean pineapple sector, aiming for Guinea to access the high value agricultural industry again.
Reviving the pineapple sector requires a systemic approach. Next to a strengthened enabling environment, guaranteed off-takers and effective services that support the productivity of pineapple farmers can enable the sector to revamp. As part of the Service Delivery Model methodology (“SDM”; essentially a supply chain structure by which companies deliver services to farmers, read more here), we are analyzing which services pineapple farmers need, and how these can be delivered in an efficient manner to create long-term impact and ensuring an economically sustainable program, making a business case for both the company and smallholders.
During ten days in Guinea, we analyzed business plans for two companies (a Guinean and a Belgian) setting up pineapple supply chains working directly with smallholders. At this moment, we are assisting both companies identifying opportunities to invest in smallholders to secure supply for their operations; processing and shipping dried organic pineapples to the US market, and respectively air-freighting fresh pineapples to the EU. The companies are supporting farmers reaching optimal productivity. This requires better access to agro-inputs and ratoons along with mechanized land preparation, irrigation, and plastic mulching, which is currently all very limited.
While irrigation and plastic mulching provide key opportunities to improve pineapple quality and adopt more environmentally-friendly practices, the costs of acquiring the systems outweigh the economic benefits. For example, farmers currently use basic hose systems to irrigate, but should rather adopt high-quality sprinklers, or even better drip irrigation. This would decrease water and fertilizer use, while decreasing the need for manual labor to irrigate. However, while drip irrigation can increase yields from 38.5 MT/ha to 60 MT/ha and, in turn, net income with ~20-25%, the hefty cost of installation of 6,800 USD/ha makes it difficult to bear the initial costs. Likewise, biodegradable plastic mulching offers many benefits such as lower water, fertilizer, and herbicides use, as well as labor, but with current costs of plastic coming in at 2,600 USD/ha, farmers would need to produce an astounding 10 MT/ha more to recover the costs. Plastic is expensive in Guinea due to the lack of domestic production and large import costs. In the short run, companies can reduce the per hectare cost of plastic by buying in bulk. In the long run, there is an opportunity for local production of plastic as organizations such as the United Nations Industrial Development Organization (UNIDO) are working to build a domestic industrial sector.
There is currently a drive to transform the sector with many donors and NGOs looking to support revitalization. There is a scope for these stakeholders to work with private companies to invest in smallholders to support the adoption of better practices. On a more sector-wide level, there is also a need to strengthen farmer organizations and enable them to become traders and service providers. In this way, they can independently and effectively cater the pineapple farmers and their communities.
In the beginning of 2019 we will finalize both analyses and IDH will make the reports publicly available. We will follow up with a short article describing how the two companies can set up an economically sustainable model of delivering services and sourcing from smallholders.
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