Under-utilized crops and fight against hunger and poverty

by Ranga Chandrarathne

As per the definition, the under-utilized crops are the plant species that are traditionally used for their food, fibre, fodder, oil or medicinal properties. However, those species have under-exploited potential to ensure food security, nutrition, health, income generation and environmental services.

At present, only 150 plants are used and commercialized on a global scale other than rice, wheat and maize, that provide over 50 per cent of world's requirement for protein and calories. However, there are an estimated 7, 000 species that play a crucial role in the livelihood of poor and potential for commercialization that could fight against extreme hunger and poverty.

ICUC (International Centre for Under-utilized Crops) originally founded in 1992 at the University of Southampton in UK which has its global headquarter in Colombo, has been conducting research in the area with a view to commercializing under-utilized crops and to understand their nutritional and medicinal properties so that the commercialization not only bring about sufficient income for rural poor but also helps to address extreme hunger and poverty which is one of the Millennium Goals.

According to ICUC Director Dr Hannah Jaenicke, ICUC support national research organisations in their priorities to develop under-utilized species, mainly fruit species such as Jak fruit which is an important species region-wise, tamarind a species though quite well known but little known in terms of its production, agricultural management and mangosteen which has a huge export potential in Sri Lanka.

In Sri Lanka ICUC partners national research organisations such as the University of Peradeniya, HORDI (The Horticultural Research and Development Institution) and ITI (Industrial Technology Institute).

ICUC has also supported and financed in publication of series of book titled 'Fruits of Future'. The series includes a monograph on Tamarind authored by Prof. HPM Gunasena, now Director of CARP (Council for Agricultural Research Policy).

Among the under-utilized crops in Sri Lanka, Jack fruit, Beli, Anoda (Sugar Apple) have been identified for commercialization. ICUC has trained locals in food processing, especially in under-utilized fruit such as Jack Fruit, Beli and Anoda (Sugar Apple).

Successful trainees have set up small scale enterprises in diverse parts of the country, in food processing, especially using under-utilized crops. Their products ranging from dehydrated Jak Fruit, Ready-to-serve Fruit drinks, Cordial, Jam, Pickle , Paste, Candy, Fruits in syrup, Chutney and Fresh Cut fruits, have found their way into local markets and niche markets such as canteens, hospitals as they have to compete with established brands.

The entrepreneurs who run Tharindu food processing Industry, a family business set up in Kandy and Ruweena in Galle are some of the successful trainees of the ICUC in food processing.

According to a comprehensive survey conducted by ICUC (led by The Economist Sampath Abeyrathne) which covered the aspects of consumer behaviour, existing markets and potential international markets and bottle necks for food products based on under-utilized crops, have identified that the customers preferred to purchase fruits products from retail shops and also from supermarkets.

The survey conducted through interviews among 371 persons covering consumers, producers, retailers, wholesalers and exporters indicated that though there is a strong brand loyalty among customer, they are willing to test new products.

Another factor that affects fruit processing small and medium enterprises (SME) is the seasonality of fruit productions. Although products such as chutney, concentrated fruit juice, cordial, fruit drinks were marketed and consumed throughout the year, sales varies on seasonal basis. For instance, sales peaked, particularly, during the popular festivals of Tamil and Sinhala New Year, the Vesak and Poson holidays and Christmas. Sales of drink products peaked during the dry period.

Wholesale markets such as super markets are bit reluctant to receive products from under-utilized crops citing that new products will sell slowly at the initial introductory phase and that consumers were satisfied with the existing brands. However, the retailers showed willingness of selling new brands of high quality products from under-utilized crops.

The raw materials widely used in the fruit processing industry such as sugar, salt, pectin, sodium metabisculphite (SMS) and citric acid were bought either from wholesale markets in big cities or in local markets. However, purchasing raw material has become an issue in remote areas.

Among the bottle necks are the inherent defects in the existing supply chain with strong middle men, SME can not deploy company agents and cost in transportation, unwillingness on the part of whole sale and supermarket owners to give prominent shelve space for fruits products from under-utilized crops.

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ICUC International Centre for Under-utilized Crops ICUC (International Centre for Under-utilized Crops) whose global headquarter was recently moved from Southampton University to Colombo.

Through its mandate and experience, is contributing to the research priorities agreed by the international Agricultural Research Centres.

Among its priorities are:

Promoting conservation and characterization of under-utilized plant genetic resources to increase the income of the poor.

The conservation, characterization, mapping out and utilization of genetic resources for the benefit of poor people is at the heart of the ICUC's mandate. Hundreds of so called Under-utilized species have been identified, and germplasm collections carried out in a number of partner countries.

Following the establishment of national genebanks, agronomic and horticultural studies are carried out, followed by post harvest and marketing strategies.

ICUC has become a recognized partner in Asia through its Under-utilized Tropical Fruits for Asia Network (UTFANET) and its Asian spin-off, the Asian Centre for Under-utilized Crops (ACUC) whose current members are Bangladesh, Nepal, Sri Lanka, Pakistan, the Philippines and Vietnam. Need is to increase understanding of the potential species for industrial use, especially of under-utilized oil and fibre plants, and to develop links with potential users of these products so that the poor people will benefit from new developments.

Enhancing Nutritional quality and safety

Through the characterization of priority under-utilized species, and the selection and propagation of superior germplasm, improved planting material is made available to the population. Working in tandem with international food standards agencies, ICUC is also to brand new products and open up new markets. By promoting crop diversity, ICUC is contributing to providing natural safety in situations of climate change.

Increasing income from fruit and vegetables

ICUC has carried out a number of marketing studies on hitherto under-utilized crops species, notably fruit species in Asia. Training has been provided to entrepreneurs in processing fruits, and in setting up and running small enterprises.

Sustainable income generation from forest and trees

A large number of under-utilized crops are either trees, or grow in forests: fruits and berries, mushroom, rattans, medical herbs, roots and tubers. However the understanding of how local and cross border markets for products work is still sketchy, as is the understanding harvesting methodologies, post harvest and processing methods.

Making international and domestic markets work for the poor

Marketing and enterprise development is one of the priorities for ICUC's work in the next few years. By developing closer links with the private sector, organic and ethical companies, ICUC believes great benefit can be reaped by the poor. Functioning market information system for a variety of products, and greater understanding on the national and international rules and standards are for poor to enter these markets.

ICUC work is guided by the UN Millennium Development Goals such as Eradicating extreme poverty and hunger, Promote gender equality and empowers women, Reduce child mortality, improve maternal health, Combat HIV/AIDS, malaria and other diseases, Ensure environment sustainability and Develop global partnership for development.

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Recommendations

The following nine recommendations are offered to support processors and development officials in their efforts to establish and strengthen small-scale tropical fruit processing enterprises in Sri Lanka:

1. Identify your market.

Consumers' loyalty to popular brands and wholesalers' reluctance to promote new brands complicate the entry of new enterprises into major retail markets. The more successful start-ups adopted a risk-aversion strategy, catering first to protected niche markets and then gradually entering major retail markets.

Thus, it is recommended that start-ups survey the market carefully and make a decision as to whether or not they will initially cater to protected niche markets before moving into the major retail markets.

2. Encourage the retailers to promote new brands of processed under utilised fruit products.

The promotion of new brands is inhibited by the fact that marketers are satisfied with the supply of existing brands. They feel that offering new brands reduces the space-utilisation efficiency of their shops, and are therefore reluctant to display new brands in visible locations on their shelves.

A considerable number of the retailers interviewed in this survey, however, were willing to try new brands and products; this should be encouraged by providing good-quality products with longer credit periods and higher discounts, as well as free samples.

It is also important to accept the return of rejects.

3. Take advantage of consumers' brand consciousness.

Consumers indicated that they were loyal to leading brands of fruit products, which is a limitation when introducing new brands.

The consumer's brand consciousness can also be taken advantage of, however, for example by ensuring that a new brand possesses SLS certification (see recommendation 7) or by operating under an established brand, for example the well-known REN (Rural Enterprise Network) brand in the Kandy area.

The development of a common brand amongst groups of enterprises can increase bargaining power and, at the same time, reduce marketing overheads for individual enterprises. Quality assurance is, however, of prime importance when developing a common brand, as is adequate coordination amongst the processors.

4. Advertise the new brand.

Processors also need to advertise their product, for example by participating in trade fairs and showcasing the products in target markets during the introductory phase. Raising retailer and customer awareness of a new brand/product in the target markets creates increased demand.

Advertising in the mass media might be attractive, but its high costs may be prohibitive to small enterprises. Furthermore, small enterprises may not be able to satisfy the high demand for their products that could follow such massive advertising. For these reasons, localised targeted advertising is recommended.

5. Diversify the product palette.

An enterprise has higher efficiency in machine utilisation when more than one fruit is being processed. This is particularly important for small start-ups, which might find it difficult to store large volumes of raw materials for processing during the off-season. By processing a variety of fruits, the enterprises can significantly increase their profitability.

The main barrier to higher consumption of chutney, cordial and jam from under utilised fruits seems to be their lack of availability.

The study indicates that a considerable number of consumers would buy these products if they were available. Mixed fruit cordial and jam are widely consumed; it is believed that the introduction of new tastes, by mixing under utilised fruits with preferred fruits to produce mixed fruit jam and cordial, would encourage consumers to buy these products.

The taste of these mixed fruit products has to be tested with consumers, however, before launching them on the market.

6. Develop and maintain strong relationships within the market chain.

The links between fruit suppliers and processors are not well established. This is important, as availability of raw materials is one of the main factors determining the scale of operations of an enterprise.

The example of jackfruit dehydration enterprises, for instance, highlights the importance of maintaining a well organised raw material suppliers' network, and of having good-quality raw materials available throughout the year.

Therefore, this research recommends that SME develop close relationships with raw material suppliers, allowing them to obtain good quality materials at competitive prices.

A comprehensive study should be conducted to analyse the extended value chain of suppliers of under utilised fruit species raw materials.

Similarly, the link between processors and agents needs to be maintained and fortified. When targeting the retail market, it is important that the products be marketed through reputed agents. Marketing directly to retailers, bypassing the wholesalers, is also an option for the better established enterprises.

7. Obtain SLS certification for new brands.

Small-scale start-ups reported that the high cost of certification was a barrier. It is advisable, however, that they design their factories from the outset with the necessary flexibility to allow them to adhere to the requirements of the standards office.

Possession of SLS certification facilitates the marketing of new brands, as retailers are more interested in promoting new products if they are of certified quality. It is also recommended that small-scale operators enter into dialogue with the Sri Lanka Standards Institute to discuss alternative options for the certification of their products and emerging brands.

8. Improve labour efficiency by using simple equipment in lieu of labour-intensive operations.

High-paid labour is prohibitive for the profitable operation of some micro-enterprises. Jackfruit dehydrating enterprises are particularly labour intensive labour is the second highest cost component of these enterprises?and thus their profitability is highly sensitive to the cost of labour. High rates of labour turnover and low labour efficiency are also reported to reduce the profitability of these enterprises.

Unskilled labour is, however, widely available in Sri Lanka throughout the year. It is therefore recommended that simple equipment that can be managed by unskilled labourers be used in lieu of particularly labour-intensive operations, where appropriate. In addition, a performance-based payment system can be introduced to increase labour efficiency.

9. Facilitate access to good-quality packaging materials in remote areas.

Attractive and appropriate packaging and labelling is particularly important when introducing a new product into the market. However, the lack of choices among packaging materials is inhibiting the successful marketing of new products from under utilised fruits.

In Sri Lanka, production of high-quality packaging materials should be encouraged as an independent industry, in support of the country's fruit processing industries. The supply of these materials to remote areas also needs to be guaranteed. This provides an opportunity for interventions by BDS providers and development agencies.