0. Methodology
Calculation and Symbols :
AV = The average value of the time-series
GR = Growth Rate : An indicator of the relative rate of change
of the time-series values
MT = Metric ton
- = Data not available
EU = European Union
NA = North America (USA + Canada)
SH = Southern Hemisphere
The FAO estimates the total world harvest over the three years
1993-1995 at an average of 489 million tons for vegetables and
448 million tons for fruit. The clear long term trend is towards
an increase in production in the order of 3.2 percent per year
for vegetables and 1.6 percent per year for fruit.
The trend towards higher production is not uniform in all the
main producing countries, nor is it the same for all major products.
Overall the largest increase in production for both fruit and
vegetables has been in Asia (particularly in China) and in South
America (Brazil, Chile). The leading vegetable producer is Asia
with 61 percent of the world output and a yearly growth of 5.1
percent per year. However, the USA remains the leading exporter
of fresh fruit and vegetables with oranges, grapes, tomatoes and
onions. Chile has become a major world exporter of fresh fruit :
45 percent of tbecome a major world exporter of fresh fruit :
45 percent of the Chilean production volume.
The main crops are oranges with a yearly increase of 3.4 percent
per year. The Chinese production of oranges rises by 14.9 percent
per year and is now as important as the total orange production
of the European Union. The world production of tomatoes rises
by 2.9 percent per year and the European Union is the largest
single producer with 18 percent of the total output but a yearly
growth of 2.0 percent. Only Turkey has 7.6 percent of the world
output and sees its production rising by 4.9 percent each year.
The European Union was for a long time the largest world producer
of apples with 20. percent of the world volume and a stable production.
China now has 23 percent of the world production of apples, larger
than any other country and a yearly increase in production of
16.2 percent.
Next to the larger crops there is a whole range of products ,
not so significant in terms of quantities, but increasing dramatically
at times. On markets with limited capacity , e.g. onions, garlic,
asparagus, mushrooms and soft fruit, such production surges soon
have a disruptive effect.
World consumption of fruit and vegetables is also increasing.
But not as fast as the production growth. It is likely that the
demand for fruit and vegetables will continue to increase world
wide over the next few years, but probable at a slower rate than
the productio, but probable at a slower rate than
the production. The risks of surpluses on a world wide scale is
distinctly possible for a number of products, especially for fruit,
with a few exceptions.
Economic development, particularly in medium income countries
in Asia, Latin America and in the Eastern European counties should
bring an increase in consumption the per capita of fruit and vegetables.
Conversely the trend in North America and Western Europe is towards
a diversification rather than in a further increase in consumption.
The overview of the fruit and vegetables development is given
through the "World Tables on Fruit and Vegetables".
These tables, derived form the FAO database, cover the time period
1985-1996 and consider some 228 countries regrouped in 7 country
groupings or areas (Annex 1 of A. Segrée reports the full
set of countries and country groupings).
For the purpose of the study a distinction is made between "Developing
Countries" and "Developed Countries, including country
groupings (areas) :
| Developing countries | Africa |
|
| Latin America |
| Central America and|
| Asia |
| |
| Oceania Developing |
| |
| Developed Countries | Industrialised countries |
|
| Economies in Transition |
|
Of all the different sub-sectors within the food industry, fresh
fruit and vegetables have a chain of supply which displays unique
characteristics;
The structure of the fruit and vegetable exploitation is not homogeneous.
The complexity reflects the diversity of factors : evolution of
consumption, production techniques, socio-economic interest, general
politic climate, production policy, international competition
and international trade agreements.tional competition
and international trade agreements.
Eastern European countries and many developing countries, still have a predominant traditional family-linked production unit. Traditionally fruit and vegetables were exclusively cultivated close to the cities, particularly for local consumption. Later transport over larger distances permitted specialisation and the de-localisation of production. Historical reasons explain the actual co-existence of different production systems :
According to the results of structural analysis in EU in 1989-1990
approximately 1.8 million of farms produce fruit and vegetables.
Surprising is the small average dimension : 1.3 ha. However, the
analysis of professional exploit.3 ha. However, the
analysis of professional exploitations shows that the average
size is considerably larger. There are about 100.000 exploitation's
specialised in commercial production of vegetables and 350.000
specialised in the commercial production of fruit. The average
size is 4,2 ha for specialised exploitation's in vegetables and
7,9 ha for specialised exploitation's in fruit.
The specialised holdings achieve about 50% of the commercial production
of the EU for vegetables and over 80% for fruit. The technological
progress particularly in biotechnology and information did increase
the operating scale and profitability of the exploitations.
Particularly the integration of technological renewal in horticulture
is important. The entrepreneur has to adapt his production methods
and management in order to increase cost efficiency.
The USA census 1992 reports 99.514 farms producing fruit and nuts,
29.605 vegetable (incl. melon) farms and 39.712 other specialised
horticultural units. The average size of the USA farm is 21 ha
for fruit and nuts and even 50 ha for vegetables and melons.
As compared to the EU, the USA 'family farm' dimension is significantly
different. More-over, typical for both USA and EU, about 25 percent
of the farms produce about 75 % of the production.
The requirement of capital per exploitation and per full-time
employed person decreases per unit of the production. Thed person decreases per unit of the production. This evolution
of production factors leads to the suggestion that the need for
capital will increase and the need for labour will decrease. This
is logically followed by a decrease of the number of exploitations.
It is clear that the need for knowledge, comprehension and management
capacities at the farm exploitations are still increasing.
Most fresh fruit and vegetables are produced by small and medium
sized family farms. Once the seeds or trees have been planted,
costs can be kept very low, particularly when labour is to a large
extent supplied by the family itself. This makes the supply of
fruit and vegetables comparatively less susceptible to price fluctuations;
farmers will continue to supply the market, even when prices are
only slightly higher than variable costs for several years. In
the longer term, however, higher prices are needed to allow farmers
to replant especially as planting new varieties is becoming increasingly
important
Supply may vary greatly from season to season depending on the
weather. According to economic theories a short supply would result
in higher prices, which in turn counterbalances low volumes and
therefore levels off the income effect. Fruit, however, from one
destination or one kind may easily be substituted by fruit from
other sources or kinds. Consumers may easily shift from one fruit
to ainds. Consumers may easily shift from one fruit
to another when prices for a certain fruit would be considered
too high. Therefore producers and traders will rarely benefit
from very high prices in years of shortages, and they will continue
to experience the disadvantages of very low prices in years of
abundance. This market situation with either low or very low prices
results in structurally low margins for all parties.
As a result of the price and marginal situation in the market,
producers and exporters are constantly searching for possibilities
to earn premium prices, and the role played by technology in these
and other developments in the fruit chain is becoming increasingly
important.
World-wide, the 1996 production (FAO) reached 508 million tons
for vegetables and 469 million tons for fruit. The productions
dynamics is different according to continents, countries and types.
Production is developed countries showed a strong expansion in
the period 1950-60, but is stabilising. The yearly production
growth in developing countries is more important than the demografic
growth. This expansion matches the growing demand in Asia, Latic
America and the Northern countries (out of season, tropical etc.)
Vegetable production increased by 56% over the last 15 years.
Asia dominates with 60% of the world production. The EU comes
next with 11%. The most importanroduction. The EU comes
next with 11%. The most important producing countries are China,
India, EU and USA. Over 100 types of vegetables are produced and
consumed in the world. Only the types having good taste qualities
and allowing for technical progress with respect to production
and marketing are developed on a world scale. The breeding of
vegetables, for example, is especially important for varieties
cultivated in greenhouses or destined for further processing.
This may result in standardisation of production.
Table 1: Production volume, 1000 MT
| Citrus | ||
| Bananas | ||
| Tomatoes | ||
| Grapes | ||
| Apples | ||
| TOTAL FRUIT(*) | ||
| TOTAL VEGETAB/CENTER> | ||
| TOTAL VEGETABLES |
(*) Excluding nuts
The development of the fruit production shows a similar trend
to that of vegetables (Table 1 and 2), having recorded substantial
growth from just over 300 million tons in 1980 to in excess of
400 million tons in 1995, an increase of more than 30% over the
last 15 years.
Growth rates varie largely. Grape production decreased by 18%
during this 15-year period, whereas production of citrus, bananas
and apples increased by 50% , 48% and 44% respectively.
The fall in grape production is quite an exception since most
types of fruit have shown considerable growth. The largest growth
rates were achieved by relatively smaller fruits, with the kiwi
fruit having established itself as a major fruit following a rise
in production of more than 3000% in the past 15 years. The more
luxury fruit types have also experienced large growth: sour cherries
and blueberries, for examples have shown growth rates of 102%
and 98% . Tropical fruits have performed very well too, papayas
growing by 81% and mangoes by 36% . Apart from mangoes though,
all these fruits are still relatively minor components of the
total fruit package. The above average production growth of the
luxury and tropical fruits is a response to more sophisticated
consumer demand in the developed ecosophisticated
consumer demand in the developed economies that requires a wider
variety of fruit throughout the year.
Table 2: Production value US $ 1.000.000
| Citrus | ||
| Bananas | ||
| Tomatoes | ||
| Grapes | ||
| Apples | ||
| TOTAL FRUIT | ||
| TOTAL VEGETABLES |
It is not only demand that has given momentum to fruit production,
but policy has also stimulated fruit production, either directly
or indirectly. Changes in the agricultural policy of many countries
have led to farmers diversifying production and many have opted
for cash crops sifying production and many have opted
for cash crops such as fruit and vegetables. In North America,
for example, the support for cereals and oilseeds was reduced
in the mid 1980s , and this resulted in a subsequent increase
in acreage under fruit trees in certain areas as well as diversification
towards fruits of a higher added value such as berries. Chile
is another example where structural reforms introduced in 1974
gave farmers greater security on their farmland property rights.
Prior to 1974, annual crops tended to be grown because of the
farmers' unwillingness to invest. But allowing farmers to own
the land provided the incentive for them to invest in perennial
crops and, as a consequence, fruit production boomed.
More than in the other agricultural sectors the EU production
of fruit and vegetables is guided by the market forces and influenced
by tariff barriers. Therefore, for most products the surplus of
production is minor.
There are however exceptions to this general rule. The EU withdrawals
(below) are important and did become routine for a number of varieties
of apples and peaches. Also in the case of citrus the withdrawals
are relatively small but a growing part of the production is not
suited for the fresh markets and is diverted (without support)
to processed products.
The interdependence of producers of fruit and vegR>
The interdependence of producers of fruit and vegetables on the
market influences the future evolution : if the internal market
becomes oversupplied, a price drop will follow and lead to a progressive
adjustment.
An external factor of increasing concern is the reform of the
Common Agricultural Policy. A number of cereal producers are attracted
to diversify their production to fruit and vegetables. They take
advantage of the larger size of their enterprices and are supported
by the EU for their traditional production. A similar situation
is reported for vineyards, taken out of production by EU subsidies
('grubbing') and converted to production of apples.
The European withdrawal system was designed to cope with the cyclical
surpluses unavoidable owing to the seasonal variations in yield
due to weather conditions. Up until 1968 the withdrawal was entirely
financed by the producers organisations. Modelled on the Dutch
experience, the EU experimented with various forms of market management
including :
In practice the intervention by the EU was limited to setting
the basic price and buying in price for the following produce
only: eating apples, apricots, dessert pears, peaches, nectarines,
table grapes, citrus, toert pears, peaches, nectarines,
table grapes, citrus, tomatoes, cauliflower, aubergines, courgettes
and cucumbers.
A preventive withdrawal system has been in operation since 1979
for apples and pears as these can be stored. This mechanism was
introduced as it became apparent that it was better to prevent
a market collapse than to react once a crisis had occurred.
In 1987 the EU begun to implement stabilising measures because
of the fact that the cyclical events turned out to be a structural
characteristic. Indeed, almost the entire crop of white peaches
and red oranges ended up in withdrawal from the market. The withdrawal
system was gradually loosing the initial aim of curing cyclical
aspects. Consequently, the budget was rising to approximately.
one million ECU on a yearly basis.
Moreover the public opinion became very dissatisfied with the
size of the market withdrawals and particularly with the destruction
of lots of products. The 1996 EU-reform of the fruit and vegetable
market organisation is aimed at bringing a better equilibrium
between supply and demand in the European Union. Budget saving
are not the first goal. But the actual amount (2 billion ECU)
would better be spent in order to satisfy producer and consumer.
Most crops are subject to federal (USDA) or state quality standard.
Both shipper and buyer are familiar with the USDA requirements shipper and buyer are familiar with the USDA requirements
to be met for certain grades or sizes. If, on receipt of the product
the buyer is satisfied that it is the requisite quality level,
the product is accepted without any government inspection or involvement.
The non-mandatory quality standards are simply there to facilitate
trade, keeping direct costs down.
One of the most important sources of institutional support for
the US fruit and vegetable industry are mandated marketing programs.
Growers are free to choose from a menu of legal organisational
options designing the program that best meets their needs:
All of the firms producing, and in some cases handling the commodity
in a region encompassed by a mandated program are required to
pay an assessment levied on each unit sold. The funds are then
pooled and administered according to the purpose agreed upon by
the commodity group. The interest of the growers and/or handlers
are represented by their elected grower and/or handler boards
of directors.
Growers and/or handlers continue to sell their produc
Growers and/or handlers continue to sell their products independently
as usual, merely contributing assessments on each unit sold. Promotional
programs are always conducted on a generic basis - promoting the
product rather than any particular brand -.
Fruit and vegetable orders are active for: Florida citrus, limes
and avocados, Idaho-Oregon onions and South Texas onions, all
approved prior to 1991. It has been many years since new marketing
orders with quantity control have been approved and it is viewed
as highly unlikely that any will come into being in the future
.
State marketing orders are required to fund production research
through the corresponding state (Land Grant) universities. Research
and promotion funds for fruit and vegetables collected under federal
marketing order and check-off programs are estimated to have totalled
$ 45 million annually. The total farm value of the US fruit and
vegetable industry was $ 23.000 million in 1994. Hence in relative
terms, the industry investment in research and promotion through
federally authorised programs amounted only about 0.2 percent
of the total cash receipts.
A new EU market management system was introduced in 1996. The
institutional withdrawal prices are reduced gradually by 40 percent
(30 percent for apples and pears) over a period of six years.ercent for apples and pears) over a period of six years.
The withdrawal prices will be fixed for the entire EU as from
2002 on.
The EU 1997-reform is aimed at promoting the producer organisation
Key elements of the reform are :
The main objectives of producer organisations are:
The creation of agricultural co-operatives in the USA is supported
by law. Despite the appatural co-operatives in the USA is supported
by law. Despite the apparent appeal of co-operatives, they are
no longer a major part of the institutional setting in the fresh
fruit and vegetable industry. Marketing co-operatives have been
more important to the processing than the fresh market crop and
particularly to the citrus sectors. In general the declining appeal
of co-operatives is probably partly related to the increase in
average grower size, as larger growers are able to market their
crops independently.
World citrus production totalled 87,9 million tons in 1994 (Table
3), 23% of all fruit produced. It can be seen that the gradual
increase in production occurred mainly after 1985. For grapefruits,
most of the growth occurred during the nineties, a rise that can
be explained by the development of new, less bitter varieties
that are better adapted to the taste of consumers.
Differences exist between oranges grown for processing or for
direct consumption. Fruit sold on the local fresh fruit market
often yields a better price than fruit sold to the processors,
fresh fruit demand needs to be satisfied before oranges are supplied
to the processing industry.
Encouraged by good producer prices, many orange trees were planted
in Brazil between 1988 and 1993 but lower prices in recent years
have discouraged the planting of new grapes and may curtail priscouraged the planting of new grapes and may curtail production
growth in the future. In the USA citrus production is moving south
within the state of Florida to reduce the risk of frost.
In Mexico and Italy most of production is consumed domestically.
In Italy and the USA 8% of citrus production is used for export
purposes, whereas Spain is the only country which mainly produces
for the export market with more than half of production exported.
Table 3: Citrus production, 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised Countries | |||
| EU | 9.161 | 1,25 | |
| NA | 13.828 | 3,55 | |
| TOTAL |
The fall in grapes production over the past 15 years is evident
(Table 4). With more than 70% of production used in wine making,
the largest part of the production fall is attributable to the
fall in wine production. This is clearly illustrated by the fact
that grape production declined especially in Italy, Spain and
France, the world's major and traditional wine producing country.
Europe is responsible for 72% of world wine production, 52% of
grape production and 58% of vine area. In the USA, Turkey and
Southern Hemisphere countries a relatively high share of grape
production is used for raisin production and fresh use.
In contrast with total grape production, the production of table
grapes has remained rather stable during the nineties and is estimated
at ten million tons. Production of table grapes is concentrated
in four countries with Turkey, Italy, Chile and the USA (California)
having a global market share of more than 60%.
Table 4: Grape production, 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised Countries | |||
| EU | 23.506 | -2,97 | |
| NA | 5.436 | 0,96 | |
| Economies in Transition | |||
| TOTAL |
World banana production increased from 43 million tons in
1978 to 54 million tons in 1994, an average increase of 3,12%
per year (Table 5).
Ranking second and fifth among the world's major fruits, bananas
and plantains are important crops. The plantain or cooking banana
is a variety of banana which is part of the daily diet in tropical
areas. With less than 1% of total production exported, the product
plays an insignificant role on the world market.
Because of the banana's dual character, being produced both as
a staple food and for export racter, being produced both as
a staple food and for export purposes the production structure
is very diverse, often very small scale and not on a commercial
basis because a banana tree can be grown in every suitable backyard.
Banana production for commercial purposes varies from smallholder
production with farms often smaller than five hectares to production
on plantations of several thousand hectares. The scale of banana
production is to a large extent determined by the natural conditions.
In Central America, where most of the dollar bananas originate,
production is fairly export oriented. Independent producers exist,
but a considerable part of production is produced on plantations
owned or controlled by one of the large multinational banana companies,
the best known of which are United Fruit, Dole and Del Monte.
The large-scale plantations, sometimes as large as 5.000 hectares,
are characterised by efficient organisation, substantial know-how,
fast implementation of innovations, high yields, high consistent
quality and a relatively high capital input.
Independent producers tend to dominate production in EU and ACP
countries, varying from small scale production to large plantations.
Most Caribbean producers have plantations of 5 to 20 hectares,
though in some countries larger plantations exist, up to sizes
of 2.000 hectares.
Exports from these countries are mainly organised through independent
European importers (Fyffes, Pomona)ndependent
European importers (Fyffes, Pomona).
Table 5: Banana production, 1000 MT
| Africa | ||
| Latin America | ||
| Asia | ||
| Oceanic | ||
| Economies in Transition | ||
| TOTAL |
The average annual world growth is estimated at 2,68 percent,
particularly because of the production increase in Main China
(Table 6). The world apple production for the year 2000 is estimated
( Washington State University ) at 62 million ton. Red Delicious
is world wide the most important variety, followed by Golden Delicious.
Fuji has a remarkable recent increase : 80 % of the total acreage
of this variety, namely ncrease : 80 % of the total acreage
of this variety, namely 370.000 ha, is planted in China. China
had only a small production in 1987 and is now the world largest
producer.
It is expected that the acreage of red varieties will remain stable
in the year 2000 and so does the acreage of Golden Delicious.
The acreage of bicolour varieties will likely increase. Red Delicious
remains the number one variety for the USA. The share of Granny
Smith, Empire, Fuji and Gala is increasing . Plantings of Pink
Lady are started.
Production in EU the still increasing but there has been a shift
from green and yellow varieties to red and bicolored varieties.
Jonagold, Gala, Breaburn and Elstar are trend-setters. Standard
Golden Delicious, Red Delicious, Granny Smith, Cox's and James
Grieve are decreasing.
It seems that some regions are looking for typical varieties such
as Jonagold in Belgium, Elstar in Holland, Golden Delicious in
Limousin and Pink Lady in South France. There has been a switch
to fruit growing by cereal farmers and wine grape growers as a
result of lower guarantee prices for cereals and wine. Large scale
intervention has occurred in the EU in bumper crop years (Sec
2.1.1.). Germany and Switzerland are looking for new resistant
varieties particularly on farms with direct selling to consumers.
Eastern Europe is looking for varieties, suited for the Western
European markets, such as Jonagold, Elstar and Pinova. But thearkets, such as Jonagold, Elstar and Pinova. But the
majority of the orchards are out of date. The renewal is relative
limited because of lack of capital, uncertainty on land-ownership,
e.g. in the former Eastern Germany.
In the Southern Hemisphere, Argentina used to be the most
important producer. The SH has plenty of possibilities but the
capital is lacking. Today Chile is the most import apple producer
in SH with a relative decrease of green varieties and an increase
in Gala, Braeburn, Fuji and Scarlett.
Some parts of Brazil are climatologically well suited for Gala.
Granny Smith is the main variety for South Africa, occupying 50
% of the plantations: the share of Gala is increasing. South Africa
has the possibility to increase the production volume by 25%.
The production in New Zealand is stabilising after many years
of increased renewal of older plantations has taken place. The
Apple and Pear marketing Board has an important role in variety
selection and quality policy; Pacific Rose is considered promising.
Table 6: Apple production, 1000 MT
| Africa | ||||
| Latin America | | Latin America | | ||
| Asia | ||||
| Industrialised Countries | ||||
| EU | 9.563 | -0,62 | ||
| NA | 5.498 | +2,42 | ||
| Economies in Transition | ||||
| TOTAL |
Over 80 million tons of tomatoes, 19% of the fresh vegetable production
in the world, are produced every year (Table 7). The world production
of tomatoes only was 35 million tons in 1970. This increase resulted
in part from the increase of area but for a more important part
from technological innovations and the development of productions
in glasshouses. Many countries are producers of year-round tomatoes
and not only in the summer-months, using new to varieties adapted
artificial heating and high technology.
Tomatoes are produced and sold in all zones of the world. Theatoes are produced and sold in all zones of the world. The
EU is the most important producer with 13 million tons of tomatoes
or 18% of the world production. The Mediterranean areas of the
EU (Italy, Spain, Greece, Portugal, South-France are the most
important producing areas. However an important part of the crop
is produced by northern European countries (Holland, Belgium).
The USA is the next important producing country. Tomatoes are
the USA third important product after citrus and grapes. California
and Florida are the two important producing regions.
The Turkish production however has an exceptional growth rate
going from 1,2 million tons in 1961 to 6 million tons in 1994.
This is particularly due to the development of irrigation. The
total irrigated area in Turkey represents 20% and an additional
increase is to be expected.
Approximately 30% of the world production is destined to further
transformation.
Table 7: Tomato production, 1000 MT
| Africa | ||||
| Latin America | ||||
| Asia | Asia | |||
| Industrialised Countries | ||||
| EU | 12.792 | 1,43 | ||
| NA | 12.021 | 4,46 | ||
| Economies in Transition | ||||
| TOTAL |
Within the chain of supply, there are several trade steps between
the fruit grower and the end consumer. A distinction is made between
:
A number of traders combine two or even three of these functions.
Almost all vegetables and most of fruit in the world are consumed
as a fresh product in the domestic market where domestic traders
are active. Indeed, some of the largest fruit and vegetable growing
nations produce almost exclusively for the domestic market. However,
over 30 % of frumost exclusively for the domestic market. However,
over 30 % of fruit is processed mostly into juice and wine, and
these are often traded internationally as well (juice is traded
predominantly in a pre-processed form as concentrate).
While fresh fruit is consumed all over the world no type of fruit
can be grown everywhere. Since consumers demand a wide choice,
trade must take place between producing and consuming regions,
making the trade function particularly important. Nearly 9 % of
fruit production is traded internationally as a fresh product
(Table 8 and 9).
The proportion of fresh fruit which is traded increased from 6,9
% in 1980 to 8,9 in 1995. While this is low compared with other
agricultural commodities such as wheat, it is high compared to
vegetables which are predominantly grown in consuming areas.
Because fruit can be consumed both fresh and in processed forms,
the volume available for international trade depends on a combination
of factors including annual production, levels of processing and
domestic consumption. Competition between these market segments,
however, is relatively low as each segment consumes produce of
a different quality.
Table 8: Export volume, 1000 MT
| Bananas | ||||
| Citrus | ||||
| Apples | ||||
| Tomatoes | ||||
| Grapes | ||||
| TOTAL VEGETABLES | ||||
| TOTAL FRUIT |
With exception of the SH, most large export forces are close to
the import markets. A distinction can be made :
It is clear that the overall technical progress in transport,
handling and storing offered large opportunities for importing
countries to diversifie their sources of import
Table 9: Export value, US $ 100.000
| Citrus | |||
| Bananas | |||
| Apples | |||
| Tomatoes | |||
| Grapes | |||
| TOTAL VEGETABLES | |||
| TOTAL FRUIT |
World horticultural trade is very much affected by all sorts of
regulations; non-tariff barriers are complemented by a wide range
of tariff barriers in the form of export taxes and import levies.
Phytosanitary restrictions can be legitimately applied to ensure
food safety and to prevent the spread of diseases, but they can
also be implemented for the sole purpose of acting as a barrier
to trade. Most trade regulations are established to protect domestic
producers from foreign competition.
However, there is a marked general trend towards liberalisation
of world trade. Numerous multi-lateral and bi-lateral trade agreements
have been concluded over the years. The NAFTA and MERCOSUR agreements
are only two examples which have boosted fruit and vegetable trade
on the American continents. Within the framework of GATT/WTO there
is also a continuous move towards a further liberalisation of
world trade. The minimum access requirement, tariffication and
reduction in export subsidies that was agreed upon in the latest
GATT agreement, will boost fruit trade. A reduction in subsidies
will disadvantage the least efficient growers. Production costs
inntage the least efficient growers. Production costs
in the primary sector will become the focus of competition resulting
in a more significant role for global supply.
Despite these new incentives to liberalise world trade, there
still is room for countries to protect their own markets and domestic
producers from world market fluctuations. Even the GATT/WTO agreements
have included some provisions that enable the participating countries
to protect their markets. Even though all countries visibly protect
their domestic produce from foreign competition, the EU is the
most accused of being too protective and disruptive to the world
market. The banana import regulation is the major instance of
this and is treated more extensively in the sections dealing exclusively
with bananas.
It is not only for bananas that the EU import regime is rather
restrictive. At the beginning of 1996 the reference price system
was replaced by the entry price system for a number of products.
The EU replaced its fruit and vegetable reference price system
by the entry price system to meet the GATT agreement which demands
tariffication of import restrictions. The entry price system is
additional to a universal import duty of 8%. With the entry price
system, applied to 15 fruits and vegetables, the EU sets a daily
minimum import price, depending on the prices of EU produced fruit.
On products entering the EU below this minimum price a progressive
import tarow this minimum price a progressive
import tariff is levied to equalise the import price with the
minimum price. On products entering the EU at 8% or more (12%
for apples and pears) below the entry price, a fixed duty is added.
The entry prices are consistently set at levels well above the
production costs in the EU. The entry prices vary per product
and per season.
In line with the GATT/WTO treaty, liberalisation of trade is expected
to continue as part of the new WTO round after the year 2000.
This will result in new market opportunities, in particular for
those countries with a low cost price. A reduction of subsidies
will penalise the least efficient growers and different national
fruit chains will witness increasing competition on production
costs in the primary sector. Global supply will acquire greater
significance.
Citrus export
In 1995, 9,7% of world citrus production was exported as a fresh
product, a volume of 8,9 million tons (Table 10). Some 8%
of oranges was exported whereas for tangerines this was 13% for
lemons and for limes 14% and for the combination of grapefruit
and pomelo as much as 22%. Oranges account for half of citrus
exports.
The export of tangerines in particular is very concentrated with
Spain alone supplying more than half of the volume of trade. Most
Spanish citrus exporte than half of the volume of trade. Most
Spanish citrus exports are destined for other European countries.
Spain has been able to increase exports substantially during the
first half of the nineties. EU membership has enabled Greece to
boost its orange exports. The decrease in Israeli exports after
1990 is said to be the result of the country's privatisation of
citrus exports in 1991, the result of a hasty decision for which
that the sector was poorly prepared.
Table 10: Citrus export volume, 1.000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised Countries | |||
| EU | 4.350 | 4,15 | |
| NA | 1.201 | 3,89 | |
| TOTAL |
Citrus import
The substantial fall in orange imports in Germany and France since
the late 1980s has, however, been largely compensated for by imports
of other citrus fruits. The import of tangerines in particular
increased but total citrus imports remained fairly stable, only
France showing a slight decline since about 1990. The shift away
from oranges may be induced by the demand for convenience :
tangerines are more easy to peel than oranges for example.
There may also have been a shift away from fresh orange consumption
towards consumption of orange juice, particularly the case in
Germany.
Export prices from Greece are at the lower end of the market,
whereas American oranges receive premium prices.
The growth in the world citrus trade is expected to continue in
the future despite the stabilisation of imports in the developed
markets (Table 11).
This potential for growth is due to the development and marketing
of new citrus varieties which are better adjusted to consumer
requirements for taste, size colour and quality. The so-called
easypeelers seem to have especial potential which clearly is a
result of the search for convenience.
Table 11: Citrus import volume, 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised countries | |||
| EU | 4.523 | 0,29 | |
| NA | 579 | 3,58 | |
| TOTAL |
Grape export
Approximately 20% of world table grape production is exported.
This is very high compared to the average for all fruits of 9%.
World trade in grapes, most of which are table grapes, has shown
a considerable increase during the last fifteen years, Chile alone
accounted for almost half of the export growth by increasing its
exports from 49.600 tons (1980) to 442.820 tons. Not only Chile,
but also South Africa increased exports substantially, especially
after sanctions were lift in the early nineties.
ecially
after sanctions were lift in the early nineties.
With three countries, the EU is well represented among the major
grape exporters. Most of the exports from Italy, Spain and Greece
(84%, 94% and 80%, respectively in 1995) are directed toward other
European countries, with Germany the major destination. The dramatic
decline of grape exports from Romania and Bulgaria, two countries
that were among the major grape exporters in the early eighties
should be noted. Their exports are now almost down to zero as
a result of the economic problems in Eastern Europe.
Table 12: Grape export volume 1000 MT
| Africa | ||
| Latin America | ||
| Asia | ||
| Industrialised countries | ||
| EU | 920 | 3,72 |
| NA | 258 | 9,41 |
| 9,41 | ||
| Economies in Transition | ||
| TOTAL |
Grape import
The northern hemisphere in all absorbs more than 98% of world
exports and is a major destination for southern hemisphere exports
(Table 13).
European Union imports, approximately half of world imports, were
mainly originating from other EU countries. Imports from non-EU
countries also increased due to a rise in demand.
The former Czechoslovakia used to be an important grape importer,
but due to economic problems its position has gradually weakened
since the late 1980's.
The USA holds an important position both as exporter and as importer,
though it is a net importer. US exports mainly Californian grapes
during the second half of the year and imports are concentrated
between January and May.
The growth in international trade for grapes was encouraged by
the development of new varieties. The Thompson Seedless was the
first seedless variety to be marketed on a large scale.
The major importers, the USA and the EU, shield their domestic
producers by imposing protective measures during their own production
season. The EU for instance applies its entry price system to
table grapefor instance applies its entry price system to
table grapes from 21 July to the end of November. Grapes imported
during the EU's off-season are virtually unaffected. The USA has
a similar methodology: table grape imports are subject to two
marketing orders, specifying certain quality requirements, between
20 April and 15 August, in addition to the application of
phytosanitary barriers.
Table 13: Grape import, 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised countries | |||
| EU | 929 | 2,45 | |
| NA | 480 | 3,49 | |
| Economies in Transition | |||
| TOTAL |
Banana export
With exports in 1995 over 13 million tonnes, almost 25% of production,
bananas account for approximately one third of the world's total
fruit exports (Table 14). Most bananas are exported from Central
America but the Philippines is also a major exporter.
The largest exporting nations have shown the largest growth during
the past fifteen years, suggesting that world banana trade has
become more concentrated.
Table 14: Banana export volume 1000 MT
| Africa | ||
| Latin America | ||
| Asia | ||
| Industrialised countries | ||
| EU | 1.043 | 44,12 |
| NA | 387/I> | |
| NA | 387 | 11,85 |
| TOTAL |
Banana import
On a world scale banana imports increased by more than 3,5 million
tonnes between 1990 and 1995 despite the liberalisation in the
EU's banana import regime that was implemented in 1993 (Table
15).
With 37% of world imports, it is no surprise that the EU banana
regime has given rise to so much debate.
Germany is the second largest importer after the USA, although
the fall in imports since 1992 is probably due to the EU banana
regime which resulted in much higher consumer prices.
Recent developments in world banana trade indicate strong growth
in imports by Eastern European countries. This is mainly the result
of the banana's image of a 'luxury' fruit while still being very
affordable When the economies in these countries gather more momentum,
there is likely to be a slowdown as demand for other fruits increases.
China is still a relatively unknown factor as banana importer
but if it continues its present trend with imports increasing
more than tenfold between 1990 and 1995, from 14.000 tonnes to
160.000 tonnes.
World banana trade is likely to increase further in the future,
though there are some hints that the EU market is becoming s,
though there are some hints that the EU market is becoming saturated,
not only because of the restrictions on imports. In developed
economies bananas may have to cede market share to other newer
exotic fruits.
Table 15: Banana import, 1.000 MT
| Africa | ||
| Latin America | ||
| Asia | ||
| Industrialised Countries | ||
| EU | 4.599 | 8,86 |
| NA | 4.013 | 3,27 |
| Economies in Transition | ||
| TOTAL |
Apple export
The total word trade is estim
Apple export
The total word trade is estimated at 4,8 million tons yearly (Table
16). About 1.2 million tons originates from the SH. The apple
exporters not only look for increase in the existing markets but
as for new markets, such as Eastern Europe and South East Asia.
It is expected that the total apple exports from the SH countries
will reach 1.6 million ton by the year 2000. The SH export of
Granny Smith is the most important with approximately 400.000
tons. The SH exports of Golden Delicious, Braeburn and Fuji are
estimated at respectively 100.000 tons, 175.000 ton and 110.000
tons.
Particularly the USA are successful pioneers in looking for new
markets in South East Asia: but Chile, New Zealand, Australia
and Canada are also very active. The import of apples in Hong-Kong,
Taiwan, Singapore, Thailand, Malaysia and the Philippines is increasing
year by year.
The USA export to these countries is estimated at 300.000 tons
in 1995 as compared to 230.000 tons in 1994. The European Union
is not so active on the East Asian markets.
Table 16: Apple export volume, x 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised Countries | |||
| EU | |||
| NA | |||
| Economies in Transition | |||
| TOTAL |
Apple import
The apple import in the European Union increases year by year
(Table 17). The imports exceed the exports: in 1994 the EU imported
566.000 tons as compared to the export of 403.000 tons. The imports
in 1995 were 693.000 ton, consisting of 590.000 ton imported from
the SH (South Africa, New Zealand, Chile and Argentina.
Many countries are active on the Eastern European markets: particularly
the USA and New Zealand discovered this market. A large quantity
of class II apples is exported to Eastern European countries.
s is exported to Eastern European countries.
China is considered to be a potential exporter of apples. The
increasing production is not only for domestic consumption but
China may want to become an important supplier for South East
Asia (Fuji). Of course, as the Chinese economy grows, this country
is considered to be a niche market for specific varieties as well.
Table 17: Apple import volume, x 1000 MT
| Africa | |||
| Latin America | |||
| Asia | |||
| Industrialised countries | |||
| EU | 2.359 | 1,43 | |
| NA | 229 | -1,17 | |
| Economies in Transition | |||
| TOTAL |
Tomato export
Only 4% of the world production of tomatoes is exported fresh
(Table 18).
With approximately 700.000 tons, the Netherlands is the leading
exporting country of the world. Ten percent of the export is during
the winter months, coming from Canaries. Spain is the number two
export country together with the Canaries providing 45% of the
northern European market during the winter months. There has been
a clear increase of Spain tomato exports during the recent years.
Moroc takes advantage of the free access to the European Union.
Mexico is the number three export country in the world and is
almost exclusively the supplier of the USA (98% of the import
of the USA). The Mexican imports cover approximately 20% of the
USA fresh tomato consumption. The export of the USA comprises
225 thousand tons going mainly to Canada.
Table 18: Tomato export volume, 1.000 MT
| Africa | ||||
| Latin America | ||||
| Asia | ||||
| Industrialised countries | ||||
| EU | 1.769 | 7,12 | ||
| NA | 173 | 13,32 | ||
| Economies in Transition | ||||
| TOTAL |
Tomato import
Germany is the number one import country of tomatoes in the world.
Approximately 55% of the German import originates from the Netherlands.
Next is Italy and the import originating from Spain is increasing
rapidly (Table 19)
The number two import country in the world is the USA and the
trade agreement between Mexico, USA and Canada increases trade.
Surprisingly Poland and also Russia have a very strong yearly
growth of import of tomatoes. The disruption of their economy
and the opening of their markets gave an opportunity to Benelux
exporters to increase their yearly export.
Table 19: Tomato import, 1.000 MT
Table 19: Tomato import, 1.000 MT
The average world consumption of fruit, excluding nuts, is 79,4
kilo per person per year and 84,9 kilo per person per year
for vegetables (Table 20). Important disparities exist between
countries and continents. So one disparities exist between
countries and continents. So one quarter of the world population
consumes more than 100 kilo per person per year of fruit.
Table 20: Population and consumption of fruit and vegetables,
1994
These different levels depend on two factors :
Three types of consumption could be distinguished (Table 20) :
Demographic evolution in Western Europe and th>
Demographic evolution in Western Europe and the increasing age
structure of the population leads to the conclusion that a relative
saturation is occurring in terms of quantity of demand.
One factor is the demand for adapted small packages. The suspicion
of the consumers for new processes and raw materials has increased
demand for information on production processes and raw materials.
The differences of consumptions between countries the members
of the European Union are considerable. The relation between the
country with the highest consumption of vegetables and the lowest
consumption is one to five for vegetables and one to six for fruit.
In general the countries with high production tend also to have
a high consumption. This is the case for the Central European
countries.
In 1994 the EU consumption of vegetables, both fresh and processed
was 130,7 kg per person. About 26% of global consuesh and processed
was 130,7 kg per person. About 26% of global consumption is processed.
The deep frozen market is most dynamic in vegetables: this segment
is still highly expansive.
Fruit and vegetable distribution proceeds through three different
channels:
Direct producer sales to retailers or caterers and sales on local
markets ("short" channels) have developed above all
wherever growers are located close to towns or tourist regions,
giving them as a rule a good rate of return for their crops.
Table 21: Marketing services from producer countries are supporting
their products with promotional budgets for their trademarks
The wholesale market sector has suffers much damage from integrated
distribution, especially large-scale distribution, which has moved
away from the wholesale markets. Large catering firms and catering
the wholesale markets. Large catering firms and catering
suppliers, however are tending to deal directly with producers
or importers. Wholesale firms offer a better service than wholesale
markets , hence surplus capacity, fragmentation and keen competition.
According to a French study the average market share of integrated
distribution is 60% in 1992 and 35% for Belgium. Onifhlor (France)
indicates that the increase of the concentration is approximately
3% per year. In Spain the number of hypermarkets (over 20.000
m²) doubled between 1987 and 1992. The special attention
of the large grocery distributors for those products is explained
not only by the need to present a complete fresh offer to the
consumer but also because fruit and vegetables are traffic builders.
This evolution is not without consequences for the internal sector.
It leads to a concentration of demand which is often criticised
by producers and their co-operatives. In general the large distribution
chains :
Fruit and vegetables account for about 10 per cent on average
of food turnover of hypermarkets andut 10 per cent on average
of food turnover of hypermarkets and supermarkets in the EU. Purchasing
by hypermarkets and supermarkets is certain to continue rising
in future.
Competition between big names is steadily increasing. There is
also more pressure on prices since the problem is how to offer
goods at cheaper prices than the competitors, hence the use of
trademark products and special offers. Supermarket chains and
names are continuing to merge: the two leaders account for about
one-quarter of the integrated trade turnover in Germany and three-quarters
in Switzerland. European leaderand three-quarters
in Switzerland. European leaders are emerging, with the tendency
to develop stations grouping European supply upstream of sales
points. The limitations of such a strategy are already apparent,
however, in particular for perishable goods and with regard to
the trade-off between low prices and guarantied physical, chemical
and organoleptic quality.
Table 22: Ranking of the ten leading European distributors
by turnover (1.000.000) ECU
4.4.2. United States
In 1994, 74 per cent of retail foodstore sales were controlled
by integrated chains: this share was 62 per cent in 1974 and 58
per cent in 1954. The balance was accounted for by independents,
both affiliated and unaffiliated. At the turn of the century virtually
100 per cent of retail food sales were made by unaffiliated independents
while the current share is only 1 per cent.
Larger bulk purchases are efficiently handled by direct sales
and distribution from the shipping point rather than through terminal
markets. Many chains put theirping point rather than through terminal
markets. Many chains put their own personnel in the production
region to ensure product quality and availability. Integrated
wholesale-retail buyers use wholesale markets only for small batches
of exotic or highly perishable produce. Thus integrated distribution
by-passes the wholesale market stage and avoids intermediate handling
and services costs. Direct dispatching of produce to the integrated
distribution centre avoids any break in the cold chain and ensures
improved quality.
Large-scale distribution is continuing to concentrate markedly
and overall, its market share is expanding. The specialist fruit
and vegetable trade is becoming increasingly concerned with quality
and is adapting its logistics, services and image.
Quality standards form a system of classification which helps
to make the market more transparent by indicating certain characteriake the market more transparent by indicating certain characteristics
of a product marketed. Standards reduce transaction costs and
allow trade to develop without physical attention to the product.
Using standards for market management has certain advantages :
As for end distribution, objective competition is very likely
to be brought into play for brand ownership or "quality signs"
between production and large-scale distribution. Although this
seems obvious for stabilised products, for fresh produce sector
management is a prerequisite for any reliable quality approach.
In any case, large-scale distribution buyers :
Alongside large-scale distribution, the specialist trade stands
its own ground, especially if it can become structured to guaranteed
product quality and thus asserts its special role in the segment
of the markets identified, based on consumer recognition of their
competence.
According to this strategy market and market segments are selected
on the bases of :
To build a dominant position in the market a brand policy is needed
with strong brands offered to the consumer. Elements contributing
to a strong position of trade are :
In this way fruit and vegetables can become an attractive partner
in the management of the customer, which is the bases of a long
lasting relation of co-operation. It is clear that the more developed
the economy is, the bigger the demand for differentiation in stead
of uniform products.
There is no doubt that we have the duty to consider the health
of the consumers in the framework of the strategic options. Maximum
residue limits for pesticides have to be commonly agreed on and
respected. Therefore there is an urgent need for :
This harmonisation should apply both for the production as well
as for imported products.
It could be a paradox but because of market enlargement the competition
becomes more and more global and at the same time the home bases
become smaller and not less important. Porter indicates that Europe
becomes more a collection of home markets who with the help of
their own national and regional authorities fight a heavy internal
competition. He stresses that a cluster, an interdependent system
of supply and support activities has to be created in which the
structures of commercialisation have a unique importance. In this
sense Pmercialisation have a unique importance. In this
sense Porter illustrates it by indicating the world-wide success
of cutflowers from Holland. Porter indicates that, as compared
to the more sunny southern countries, Holland has not the same
comparative advantages. But it is precisely the building up of
a network in this sector with many supplying and supporting activities
that Holland became the centre and is no doubt the world leader.
Because the international success greatly depends on the existence
of such a network of home bases, the unilateral product thinking
has to be changed to a product market thinking. This emphasizes
the need to produce a high quality product rather than a cheap
product, in order to succeed.
Promotion is one of the four key elements of the Kotler strategic
approach. Promotion is certainly not the starting point for a
product strategy. But in a competitive environment the power of
promotion in a competitive environment the power of
promotional campaigns can not be underestimated. As for the building
of a dominant position in the market a brand policy generally
is needed. It supposes that brands will be established that appeal
to consumers and are supported by intensive publicity campaigns.
Downstream firms (large-scale distribution, wholesalers offering
full services) constantly have to find ways of meeting consumer
requirements via their sales points. The constraints include the
following:
In order to meet these constraints downstream firms must:
At the production and dispatching stage, geographical concentration
in the most favourable areas with the best fruit and vegetable
growers is creating specific production regions.
References
Cierpo Albelda, José, 1995,"La function
mayorista en la distribution de fretas y hortalizas frescas",
Distribution y Consumo , n°22, Madrid
Cook, Roberta "Institutional Aspects of Fresh
Fruit and Vegetables. Impact on Producers, Consumers and Markets",
OCDE report, may 1996
C,
OCDE report, may 1996
Commission Européenne 1994, "Rapport
Fruits et Légumes , problèmes d'aujourdhui, défis
pour demain", documentation interne, Bruxelles
Durand, B., 1994, "Fruits et légumes
: achats des ménages par type de point de vente en 1993",
Infos CTIFL, n° 103, Paris
FAO, Databank production, export, import, 1985-1996,
Rome
Garcia, M., 1995, "Developpement des organisations
de producteurs de fruits et légumes dans les differents
états membre", COPA-COCEGA, documentation interne,
1995
Gierl, H., Horter T., 1992, "Erzeugerorganisationen
im Urteil des Lebensmittel-Sortimentshandels", Agrarwirtschaft,
Verlag A. Strothe, Jg.41, n°12, Frankfurt/Main
Marcec, Teresa, 1992 , "Changes in consumption
in Poland during 1990-91, an example of fruits and vegetables",
Agricultural University of Warsaw, Faculty of Horticulture,
Wissenschaftliche Zeitschrift der Humboldt Universität, Warsaw,
Poland
Minier, R., Jacotot A., Van 't Riet M., Dutruc-Rosset
G., 1992, "Le marché des fruits et des legumes
en Europe", Comptes rendus de l'Académie d'Agriculen Europe", Comptes rendus de l'Académie d'Agriculture
de France, Académie d'Agriculture de France, Paris
Montigaud, J., C., Ferry J.M., Sept.1995, "La
logistique dans les filières agro-alimentaires et ses conséquences
de la production agricole, le cas de l'arc méditerranéen
français", Etudes et Recherches ENSA, n°102,
Montpellier
Ramos Azal, Fernado, 1991, "Estrategias de
la distribucion alimentaria: perspectivas para el sector horticola
espanol", Revista de Estudios Agro-Sociales, Madrid
Rabobank, 1996, "The world of Fresh Fruit
Trade", Food and Agribusiness Research, Utrecht (the
Netherlands)
Rothy, C., Kraeutler, E., 1992, "Fruits et
légumes: achats des ménagères par type de
point de vente en 1994", Infos CTIFL, n°114, Paris
Shaw, Susan A., october 1994, "The stratchclyde
Wholesole Markets study", Department of marketing, University
of Stratchclyde, Glasgow
Siguan, A., 1995, " Commercialisation. La
cadena hortofruticola", Distribution y Consumo,
Sologral, 1997, "Les marchés des fruits
et léSIZE=2>Sologral, 1997, "Les marchés des fruits
et légumes dans le monde", Serie Ridaam, Nogent
sur Morne (France)
Africa Latin America Asia Industrialised countries EU 1.595
4,03 NA 630
1,98 Economies in Transition TOTAL
4. Demand for fruit and vegetables
4.1. Structure
x 1.000.000
87-94
consumption
kg/p/y
consumption
kg/p/yAfrica Latin America Asia Oceanic Industrialised Countries EU 370 0,37
130,7 171,1
NA 294 1,03
118,3 125,7
Economies in Transition TOTAL WORLD
Those countries make advantage of the natural conditions favourable
for the culture of fruit and vegetables and are mostly rich countries.
From the end of 1950 the increase in consumption is linked with
increase in per capita income. The consumer choice is diversifying
but co capita income. The consumer choice is diversifying
but consumption is not increasing in volume any more in the last
10 years. In this group we find the countries of the Mediterranean
area, the industrialised countries of NA and EU and the Middle
East countries taking advantage of oil dollars. Also Arabian islands,
banana producers and some Asian countries (Singapore, Korea) have
similar trends.
In this group we find countries with weak revenue, traditional
consumers of fruit and vegetables or countries with higher incomes
but not having favourable natural growing conditions. Among those
the former USSR and the Eastern European countries having financial
problems by the liberalisation of their economies as well as some
African countries (Rwanda, Congo).
These are the countries with low buying power, situated in Asia
and Africa. For a certain number of them the level of consumption
is underestimated because of non-known level of auto-consumption
and buying out of traditional commercial structures. The countries
with the lowest consumption are the Sahel countries (Africa, Mauritania,
Somalia, Australia and Yemen) and the cold and hilly areas (Mongolia
and Afghanistan).
4.2. Stagnation and individualisation of consumption in EU
and USA
The smaller size of the households and the time pressure leads
to the demand of convenience food. The demand for new technologies
and postharvest handling techniques is high.
Elements are :
Three major elements are to be mentioned :
Trends in fruit consumption are difficult to determine : for both
EU fresh and canned fruit the last estimations are 171 kg per
person. The consumption of processed fruit, more especially in
the form of juice, is important for a number of fruits. As for
the total, the consumption of fresh and processed fruit increases
by approximately 1.2% per person during the last years. It is
to be expected that this increase is slowing down. A yearly increase
is expected by 0.9% at the end of this decennium.
4.3 Marketing services
In the EU, direct household purchases from the farm average about
5 per c, direct household purchases from the farm average about
5 per cent of total purchases, apart from a few countries such
as the United Kingdom, where they represent 10 per cent. They
are very likely to remain at this relatively marginal level.
The sector is no longer production-led but marketing- led. Traders
must be able to capture information downstream and pass it back
to the production end via new orders for growers to be able to
adapt to changing demand. This raises the problem of power control
within agricultural organisations of the first stage of marketing
(Table 21).
Origin Trade marks Agrexo Carmel Israel Citrus Marketing Board Jaffa
New Zealand Apples and Pears Enza
Holland Greenery South Africa Outspan and Cape
Belgium Flandria
4.4 Concentration of distribution
4.4.1 European Union
The share of integrated distribution is currently 45 per cent
and 35 per cent approximately of available quantities of fruit
and vegetables, respectively. It may exceed 50 per cent by the
year 2000. The situation varies considerably from country to country.
Germany is the leading country, with integrated distribution accounting
for over two-thirds of available quantities, compared with only
one-quarter in Spain, one-tenth in Italy and a marginal proportion
in Greece.
The importance of large-scale distribution for these products
can be explained not only by the commercial objective of covering
all consumer purchases but also because a good fruit and vegetable
department attracts more customers to the store and encourages
them to come more often and more regularly and therefore boosts
the turnover for all departments throughout the store.
This trend has an impact on the entire sector. Demand is becoming
more concentrated although this is often highly criticised by
producers and their associations. As a rule, buying agents for
supermarkets (Table 22) :
of stock management over to producer groups and local dealers.
Name of the company : Metro Railway Carrefour Intermarche Edeka
The dominance of the chain stores is even greater if all grocery
stores are included, as opposed to just supermarkets. Integrated
distribution now represents 81 percent of total food sales.
Distribution is increasingly controlled by larger operators, which
have acquired smaller firms, and the turnover per firm is steadily
rising. There are approximately 400 integrated wholesale- retail
headquarters buying offices in 1996.
The largest fruit and vegetable consumption channels in the United
States are :
The trend toward concentration is clear is the United States and
Europe and is steadily rising all over the world. There are three
main consequences:
Concentration at the supplier level :
5. Opportunities and constraints
5.1 Quality standards
What would happen if standards were no longer compulsory ?
Initially there would be little change. Big traders would continue
to refer to the standards as they really need them for their transactions,
but the system would gradually break down on local and regional
markets, reducing market transparency.
Standardisation has also been used as an instrument of market
management. For example, it led to two measures which have been
the subject of some debate in EU :
But these advantages are sometimes ill perceived by consumers,
who are deprived of produce suitable for consumption and traditionally
consumed in their region.
5.2 Product differentiation
5.3 Integrated production
Integrated production is a tool allowing production of fruit and
Integrated production is a tool allowing production of fruit and
vegetables in which the residues of chemical products are extremely
low and where the production respects as much as possible the
biological equilibrium of the environment.
This means not only the satisfaction of the general demand of
consumers who like to consume natural products. Two factors, the
hygienic and sanitary quality on the one hand and the equilibrium
of the environment on the other hand are closely related and interdependent.
By the study of positive and negative interactions of animal and
plant-based elements it is possible to reduce the need for additional
chemical products and in some cases the chemical products can
be replaced by biotechnological means which are absolutely safe
for the environment.
The interaction of both factors are the key for integrated production.
5.4 Home market
The commercialisation has an irreplaceable role to fulfil. There
is a need for a synchronized relation back and forward between
the system of production and high quality marketing. See the example
of beef-tomatoes. The importance of such a network of production
and trade with local production as a starting point for success
on international markets can not be stressed enough. Therefore
one should not rely on government where not enough initiative
and experience are available.
5.5 Integration
The wholesale trade is an alternative to highly concentrated distribution
centres for fresh produce in the context of trade growth.
The future of the wholesale trade depends on its capacity to adapt
traditional functions to new services and new customer requirements.
If it is able achieve this, it can offer an alternative to the
supply centres of large-scale distribution buying offices. Wholesale
markets need to be sufficiently large and have a suitable range
and calendar of supplies. They must also acquire logistics. However,
they will still need to show brand leaders that their interest
can be met, which seems to be the case for perishable goods.
Acquisition of shareholders in groups or networking are carried
out by:
5.6. Performance
5.6. Performance
These are uni is creating specific production regions.
These are units with specific soil and climate characteristics
but also economic entities and spaces where the various operators
share common interests, whether they be producers, dispatchers
or processors.
This is the level on which applied research and experimentation
should focus and where the cropping practices and capacity to
develop new products and new varieties make sense as the prerequisites
for any systems.
In North America, integration is liking producers in several areas,
so that stores and consumers are be assured of year-round supply
of commodities. In this regard, producers and marketers operate
in several states or even countries, getting information on production
and handling techniques wherever it can be obtained. In general,
it is much more difficult for universities and experiment stations
to show as much flexibility in providing information to growers
and marketers as these client groups need.
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