Value chain analysis of guava: producer, retailer and consumer perspectives

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The present study was conducted in Kaushambi district (25° 20’ N and 81° 23’ E, 98m above mean sea level), India during October, 2014 to February, 2015 to perform value chain analysis for guava.

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International Journal of Management (IJM) Volume 7, Issue 4, May–June 2016, pp.17–42, Article ID: IJM_07_04_002 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=4 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication VALUE CHAIN ANALYSIS OF GUAVA: PRODUCER, RETAILER AND CONSUMER PERSPECTIVES Hena Imtiyaz Research Scholar School of Environment, Resource and Development, Asian Institute of Technology, P.O. Box 4, Klong Luang, Pathumthani 12120, Bangkok, Thailand Peeyush Soni Associate Professor School of Environment, Resource and Development, Asian Institute of Technology, P.O. Box 4, Klong Luang, Pathumthani 12120, Bangkok, Thailand ABSTRACT The present study was conducted in Kaushambi district (25° 20’ N and 81° 23’ E, 98m above mean sea level), India during October, 2014 to February, 2015 to perform value chain analysis for guava. A comprehensive survey was conducted in relation to market infrastructure, transportation services, storage facilities, processing industry, export market, information flow, material flow, transparency, linkage, relationship, collaboration, commitment & trust, cutting edge technology and consumer insights. The value chain analysis of fresh guava on producer and retailers’ perspective / feedback revealed that procurement and application of agricultural inputs, availability and adaptation of technology, market infrastructure, material and information flow, status of food processing industry, transportation services, cutting edge technology and consumer insight are efficient and effective, whereas transparency, collaboration, commitment and trust are not satisfactory. The value chain analysis for guava on consumers’ perspective / feedback revealed that market infrastructure, information flow, materials flow, linkage, commitment and trust in exiting value chain of guava are satisfactory. However, transparency and relationship in existing value chain of guava are weak. The consumer gives more emphasis / importance to quality, nutritive value, safety and price as compared with packaging and service rendered by retailer for purchasing of fresh / processed guava products. http://www.iaeme.com/IJM/index.asp 17 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Key words: Value Chain, Consumer Insights, Information Flow, Materials Flow, Relationship, Collaboration, Commitment and Trust, Transparency, Guava. Cite this Article: Hena Imtiyaz and Peeyush Soni. Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives. International Journal of Management, 7(4), 2016, pp. 17–42. http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=4 1. INTRODUCTION Value chain management system represents a set of value added activities in designing, producing, marketing, delivering and supporting products and services providing a competitive advantage to the product. Unlike supply chain management, the emphasis in value chain is given to consumers. The focus in value chain is to understand the desired consumer value by moving downstream in the chain and delivering it efficiently and effectively to consumer (Fearne et al. 2009). Value chain analysis is defined as the multi-dimensional assessment of the performance of value chains including the analysis of material flow, information flow, management and control of the value chain (Taylor, 2005). Value chain management involves the collaborative allocation of resources within and between the respective business in the chain to deliver more value addition at lower cost and at a faster rate. Value chain approach provides a framework to analyse the nature and competitiveness in which small farmers can participate in potential market (Rich et al. 2011). Value chain analysis gives profound knowledge on the markets, relationships across the chain, participation of different actors, critical constraints and competitiveness of the farmers (Soosey et al. 2012). The basic components of value chains are information flow, material flow, transparency, linkage, relationships, collaboration, trust and commitment, cutting edge technology and consumer insights. Material and Information flow are the two key factors which are important for value chain integration (Lee et al. 2000; Vickery et al. 2003; Zhou and Bentn, 2007; Lindquist et al. 2008; Pereira, 2009; Projago and Olhager, 2012). The transparency in food supply chains is still in a primitive stage in context to food quality and safety (Florini 2007; Mol 2008; Mol 2014). In order to manage and find solution to complexities existing in food supply chain transparency, the supply chain partners should coordinate as well as create an atmosphere to share the data and information among each other (Hvolby et al. 2010; Verdouw et al. 2011). The present day consumers are having keen interest regarding the transparency in quality, safety and storage at each stage of food supply chain (Beulens et al. 2005; Wognum et al. 2011; Mol, 2014). The strong and cordial relationship amongst the various players is one of the most important aspects for effective and efficient food value chain (Batt and Rexha, 2000; Gary et al. 2005; Gyau and Spiller, 2009; Musa et al. 2014). Collaboration, trust, commitment and satisfaction are important attributes of food supply chain relationship (Fischer et al. 2009). Supply chain collaboration reduces procurement hazards and transaction costs (Handfield et al. 2002; Sheu et al. 2006). Hudnurkar et al. (2014) reviewed sixty nine papers which revealed that information sharing is the most important factor in food supply chain collaboration. Trust and commitment are the most important components for strong and cordial relationship amongst food supply chain partners. Mutual benefits and sharing risks and rewards, monitoring and enforcement cost strengthen the trust and commitment amongst the chain partners (Abdullah and Musa, 2014). Trust between the chain http://www.iaeme.com/IJM/index.asp 18 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives partners and sharing of information lead to effective supply chain planning and integration (Kwon and Suh, 2005; Luque et al. 2015). It is imperative to collect maximum information pertaining to consumers’ tastes and preferences in order to increase the level of consumer satisfaction (Murugavel, 2010). The understanding of consumer needs and buying behavior is critical for effective retail decision making as well the subsequent development and implementation of a retail strategy (Levy and Weitz, 2007). Developing an appropriate value chain management system for fruit crops in India would considerably improve the sustainability, competitiveness and profitability of the agricultural marketing system, which would in turn provide better consumer value. Development of a value chain management system is a major issue in developing policies and strategies in order to improve the profitability and living standards of small and marginal farmers. In spite of economic importance of guava in Kaushambi district, India, research on value chain management determinants such as information and material flow, cutting edge technology, linkage, relationship, collaboration, trust, commitment, transparency and consumer insights has not been conducted. Therefore, the objectives of the present study were to analyse and propose a conceptual framework and strategies to improve the existing value chain management system of guava in Kaushambhi district of India. In order to achieve the objectives of the present study, following research questions were developed.  What are the issues in procurement of the production inputs and adoption of technology for production of guava for local consumption and export?  What is the status of market infrastructure, transportation, storage, processing industry and export market?  How does information flow, material flow, governance and integration between stake holders influence the performance of guava value chains?  What are the opportunities and challenges in adapting innovative thinking in value chain management of guava? 2. MATERIALS AND METHODS Sustainable value chain management will facilitate and enhance understanding of competitive challenges, help in the identification of relationships and coordination mechanisms and assists in understanding how the innovative thinking components should be combined with the existing supply chain management for fresh guava. This will inevitably including wide range of activities of guava value chain analysis in terms of production and marketing system (Fig.1). Kaushambi is one the newly created district of Uttar Pradesh, India. The total geographical area of the district is 2012.8 sq.km. The latitude and longitude of the Kaushambi district are 25° 20’ N and 81° 23’ E. It lies 98 meters above the mean sea level. It is hot in summer in which highest day temperature lies in between 25 0C to 480C. The district receives approximately 960mm annual rainfall. The rainy season begins normally in the end of June/First week of July and ends in the last week of September. The winter season lasts from November to February with temperature ranging from 150C to 250C. The survey and data collection for value chain analysis of guava in Kaushambi district were done during October, 2014 to February, 2015. The survey was conducted to examine the current status of value chain management of guava in Kaushambi district, India in order to develop a conceptual framework for sustainable, collaborative and competitive value chain. A cross sectional multi method design http://www.iaeme.com/IJM/index.asp 19 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni using both qualitative and quantitative methods were used for data collection from producers, retailers and consumers. Figure 1 Conceptual model of guava value chain The theoretical construct of the research for value chain analysis of guava include consumer insight, material flow, information flow, cutting edge technology, linkage, relationship, collaboration, trust and commitment and transparency (Fig. 1). The main purpose of the survey was to assess the perception of producers / farmers, retailers and consumers on procurements and application of the agricultural inputs, availability and adaption of technology, market infrastructure, transportation facilities, storage facilities, status of the food processing industry, export market, consumer insight, material flow, information flow, cross cutting technology, linkage, relationships, collaboration, trust and commitment and transparency. In order to assess these variables, several items were measured under each variable using five point likert scale “(strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree = 5)”. The descriptive statistics, analysis of variance and post hoc tests for multiple comparisons of means were used to analyse the data. The analysis was performed with SPSS version 20. http://www.iaeme.com/IJM/index.asp 20 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives 3. RESULTS AND DISCUSSION 3.1. Producer / Farmer Perspectives The value chain analysis from producer perspectives revealed that agricultural inputs such as seeds, fertilizers, chemicals, water, farm machinery and electricity / fuel are easily available for production of guava. The government and NGO’s provide information regarding amount and time for application of agricultural inputs to the farmers. However credit facilities as well as subsidy to purchase agricultural inputs are not available to the producers / farmers. Furthermore, the majority of guava farmers are not aware about the national / international food laws and regulations for agricultural inputs mainly due to lack of coordination between farmers, chain partners and government agencies. The analysis revealed that technology for production of export quality guava is available, but small and marginal guava producing farmers are not aware about production and marketing system to export fresh guava. The analysis of market infrastructure revealed that proper road facilities and connectivity to transport fresh guava to the market as well as appropriate storage, grading, packaging and banking facilities are available in the market premises. The marketing activities for sale of fresh guava is transparent, but commission charges by commission agent is high. The analysis further revealed that facilities for marketing of fresh guava to export market, cooperative market and supermarket are not available to farmers (Table 1). The analysis revealed that transport agencies and proper road facilities are available to transport fresh guava to market timely. However, cold chain, subsidized transport and cooperative transport facilities are not available to farmers. The analysis revealed that cold storage and normal storage facilities are available at the market premises. The food processing industries are available in the district. However, farmers do not have contract farming with food processing industry and have no access for selling guava to food processing industry directly. The food processing industry does not provide loans information to producer in relation to quality and safety requirements for national and international consumers. The information regarding export market, export policies, quality and safety standards of importing countries and logistic support for export of guava are not available to the farmers. The analysis further revealed that small and marginal farmers do not have access to export market (Table 1). The analysis in context of information flow revealed that farmers / producers receive timely information on appropriate technology for guava production, marketing, safety and quality requirements by chain partners and government agencies. However, farmers do not receive information regarding profit sharing amongst chain partners. The analysis in context of material flow revealed that supply of agricultural inputs for guava production is efficient and harvested guava is timely delivered to market, chain partners and consumers. Producers agreed that efficient material flow improves consumer satisfaction, chain efficiency and relationship amongst the chain partners. The producers feedback regarding transparency revealed that information provided by the input suppliers is accurate, genuine and reliable as well as the quality and safety standards for production process of guava are transparent. However, farmers clearly mentioned that marketing activities, profit sharing and risk sharing amongst the chain partners are not transparent (Table 1). The analysis in context of linkage revealed that producers have direct linkage with markets. The direct linkage between producer and supermarket, cooperative market, http://www.iaeme.com/IJM/index.asp 21 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni food processing industry, export market and consumer is extremely poor. The analysis revealed that producers have long term relationship with input suppliers, wholesalers and retailers. Long term relationship between producers and financial institutions, government agencies, food processing industries, export markets, supermarkets and consumers is weak. Joint investment between producers and input suppliers, food processing industries and chain partners does not exist. Producers have strong collaboration with input suppliers to get agricultural inputs timely. They have strong collaboration with chain partners for exchange of information regarding production and marketing of guava. The collaboration between producers and banks for financial assistance is weak. Furthermore, producers and chain partners do not share risks and benefits associated with the production and marketing of guava. The analysis revealed that commitment and trust between producers and chain partners, financial institutions and government agencies in terms of financial assistance, information sharing, joint venture, logistic support, profit and risk sharing, etc. are poor (Table 1). The analysis in context of cutting edge technology revealed that guava producers use appropriate technology for production and marketing of guava because it reduces cultivation cost, transaction cost and losses during transportation and storage. Further, producers are using information and communication technology because it reduces time and cost of marketing. The analysis in context of consumer insight revealed that producers use recommended agricultural inputs and follow the national laws and regulations for production of guava to minimize the health risk for the consumers. The producers are aware about quality and safety preferences of the consumers and follow appropriate storage, packaging and transportation methods. Further, producers apply appropriate production, storage and packaging techniques to ensure pleasant taste, appearance and competitive price for consumers (Table 1). Table 1 Value chain analysis of guava on producer perspective, Kaushambi district, India (Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree = 5) Respondent Likert Score Variables Standard Mean devia tion  Agricultural inputs  Agricultural inputs are easily available (Seed, fertilizers, chemicals, electricity/fuel, man power, 4.45a 0.51 farm machinery, etc.)  Maintenance of farm equipment and machines facility 4.30a 0.57 is easily available  Agricultural inputs are available at subsidized rates. 2.15bcd 0.67  Credit facilities are available to purchase agricultural 1.85bc 0.67 inputs  Application of chemicals and fertilizers is as per the 2.50bd 0.61 national and international regulations  Information on time and amount of the agricultural inputs is available 3.65e 0.49 http://www.iaeme.com/IJM/index.asp 22 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives Respondent Likert Score Variables Standard Mean devia tion  Availability and adoption of technology  Appropriate and modern technology for guava 4.35a 0.49 production is available  We are aware of appropriate and modern technology 4.55a 0.51  We are trained to use appropriate and modern 4.30a 0.57 technology for guava production  Appropriate and modern technology available for 2.10b 0.72 export quality guava production  I am aware of international/national standards, 1.75b 0.64 regulations and laws of agricultural technology  Market infrastructure  Proper road connectivity is available between farm and market 4.40a 0.50  Storage, display, grading, packaging and banking facilities available within the market premises 4.30a 0.47  The commission charged by the commission agent is reasonable 1.85b 0.67  Facilities for export is available in the market premises 1.50b 0.61  Business activities related to marketing process is transparent and satisfactory 4.05a 0.60  Cooperative marketing and super market facilities are available 1.65b 0.67  Transportation facilities  Transport agencies are readily available at reasonable 4.50a 0.51 rates  Roads are available for efficient transportation of 4.40a 0.50 fresh guava  Cold chain transportation facilities are available 1.80b 0.70  Subsidized transportation facilities are available 1.45b 0.51  Cooperative transportation system is available 1.75b 0.64  Storage facilities  Normal storage facilities are available at farm / nearby area 2.25acd 0.55  Cold storage facilities are available at farm / nearby area 4.30b 0.47  Adequate storage facilities are available at the market place 4.45b 0.51  Cold storage facilities are available at market place 2.00ace 0.65  Storage facilities are in line with specified govt. regulations 2.45ad 0.69 http://www.iaeme.com/IJM/index.asp 23 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Respondent Likert Score Variables Standard Mean devia tion  Subsidized storage facilities are available 1.80ce 0.77  Food processing industry  Food processing industries are available in district / city / farm 3.80a 0.52  Producer have contract farming with food processing industry / unit 1.45b 0.51  Selling guava to food processing industry is more profitable 1.75b 0.72  Food processing industry provide loan for production of guava 1.50b 0.51  Food processing industry provides information and guidance regarding international laws and regulations for production, storage, quality and safety 1.80b 0.70 requirements of guava  Export market  Export market for fresh guava is available in the district / city 1.45a 0.51  Selling fresh guava for export is more profitable 2.20b 0.77  Information regarding the export policies and technical knowledge for production of export quality 1.60a 0.60 guava are provided by govt. / NGOs / chain Partners  Information regarding quality and safety requirements / standards for fresh guava of importing countries is 2.00b 0.73 provided by Govt. /NGO’s/ Chain partners/exporters  Govt. /NGO’s/ Chain partners provides logistic support to move fresh guava to export market 1.50a 0.51  Small and marginal producers of guava have access to export market 1.60a 0.50  Information flow  I receive information regarding new technology related to production of guava from Govt./chain 4.05a 0.39 partners  I receive the information on market demand and 4.25a 0.44 market price of fresh guava from Chain partners  I receive the quality and safety requirements of fresh 4.20a 0.41 guava for local market from Chain partners  Information sharing between chain partners is good 2.00b 0.56  I receive the information regarding profit sharing 1.80b 0.62 amongst the chain partners  I receive the information regarding transportation, 1.60b 0.50 storage and packaging of fresh guava from chain http://www.iaeme.com/IJM/index.asp 24 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives Respondent Likert Score Variables Standard Mean devia tion partners  Material flow  Agricultural inputs are timely available for land preparation and production of guava (farm machinery, 4.70a 0.39 irrigation, seed, fertilizers, chemicals, etc.)  Proper storage facility is available for storing harvested guava 2.25b 0.44  Harvested guava is delivered to market timely 4.40a 0.41  Harvested guava is delivered to chain partners and consumers timely 4.40a 0.56  Efficient material flow improves the overall consumer satisfaction, chain efficiency and relationships 4.45a 0.62 amongst chain partners  Transparency  Information provided by input supplier are accurate, genuine and reliable 4.10a 0.55  Information regarding production, marketing and profit is shared amongst the chain partners 1.55bc 0.51  Input application, cultivation methods and production process are traceable and verifiable 2.15c 0.49  Supply chain activities, profit sharing and risk sharing of the chain partners are transparent 1.80bc 0.62  Quality and safety standards for production of fresh guava are transparent 4.10a 0.64  Linkage  I supply fresh guava directly to the supermarket, cooperative market, food processing industry and 1.65a 0.49 export market  I supply fresh guava directly to consumer 2.35b 0.49  Direct linkage with potential market reduces transaction cost and improves profitability 4.30b 0.47 considerably  Direct linkage with potential markets helps to offer competitive price to consumer. 3.95c 0.39  Consumers receive considerably fresh guavas due to my direct linkage to potential market 4.45b 0.51  Relationship  I am committed for long term relationship with financial institutions 1.65a 0.49  I am committed for long term relationship with government agencies 1.70a 0.47 http://www.iaeme.com/IJM/index.asp 25 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Respondent Likert Score Variables Standard Mean devia tion  I am committed for long term relationship with input supplier 4.50c 0.51  I am committed for long term relationship with wholesaler / retailer 4.30c 0.47  I am committed for long term relationship with food processing industry, exporters and supermarket 1.75a 0.55  I am committed for long term relationship with consumers 2.45c 0.51  I have joint investments with input suppliers/ food processing industry /chain partners 1.60a 0.50  Collaboration  I have agreement with bank to provide loan to purchase agricultural inputs and machines 2.00a 0.56  Input supplier have agreement with me to supply adequate agricultural inputs timely for production of 4.45b 0.51 guava  Chain partners exchange relevant and accurate information related to production and marketing of 4.30b 0.57 fresh guava timely  Chain partners share risks and benefits associated with the production and marketing of guava 1.75a 0.72  Chain partners share the knowledge and information regarding the forecast of supply and demand of fresh 3.90c 0.31 guava  Chain partners coordinate to find new and potential market for fresh guava 2.30a 0.47  Commitment and trust  The financial institutions provide financial assistance timely to purchase agricultural inputs 1.90abc 0.64  Government agencies update me with the national and international laws & regulations and provide subsidy 2.25ab 0.64 on production and marketing of fresh guava  Chain partners provide appropriate and economic logistics for the timely delivery of fresh guava 1.75ac 0.44  Chain partners have joint ventures / contract farming for the production of fresh guava 1.70ac 0.47  Chain partners have agreement for open communication in production and marketing of fresh 1.70ac 0.57 guava  Cutting edge technology  I use advanced technology for production of guava because it reduce the cost of cultivation 4.40abc 0.50 http://www.iaeme.com/IJM/index.asp 26 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives Respondent Likert Score Variables Standard Mean devia tion  I use the advanced technology because it improves the quality of the guava and increases the marketing yield 4.50ab 0.51 of guava  I use the advanced technologies as it reduces the transaction cost 4.45ab 0.51  I use the advanced technology for packaging of fresh guava as it reduces the losses during transportation 4.10ac 0.55 and storage  I use information and communication technology for marketing of fresh guava as it reduces the time and 4.50ab 0.51 cost of marketing  I use information and communication technology in order to improve quality and safety and understand 4.20abc 0.52 consumer needs and preferences for fresh guava  Consumer insight  I use the recommended rate of fertilizers, insecticides, herbicides and growth promoters in production process for guava in order to minimize health risk of 4.50ac 0.51 consumers  I follow national laws & regulations for production of guava in order to minimize health risk of consumers 4.00b 0.56  I am aware of the quality and safety preferences of consumer for fresh guava 4.45ac 0.51  I follow the appropriate storage, packaging and transportation for fresh guava 4.35ac 0.49  I follow appropriate production techniques, storage and packaging methods to ensure pleasant taste and appearance and competitive price of fresh guava to 4.40ac 0.50 the consumers  I coordinate with various stakeholders of the supply chain of fresh guava for overall satisfaction of the 4.40ac 0.68 consumers Within the construct, the values followed by same letter in superscript have no significant difference (p < 0.05) The variables which are weak in the present value chain of guava in context of producer perspective include food processing industry, export market, transparency, collaboration, commitment and trust. The analysis on producers perspective revealed that improving the status of the variables which are weak shall result in higher producer profit, improve quality and safety, improve risk sharing among the chain partners, provide competitive price to consumers as well as improve the overall efficiency and sustainability of the existing value chain of guava (Kognt, 1988; Esty, 2004; Park et al., 2004; Mol, 2006; Zhao et al., 2007). http://www.iaeme.com/IJM/index.asp 27 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni 3.2. Retailer Perspectives The analysis of market infrastructure in context to retailer feedback revealed that proper road connectivity, storage, cleaning, grading & packaging and banking facilities are available in district and market premises for efficient marketing of guava. However, credit facilities are not available and commission charges by commission agent is unreasonable and high. The cooperative market do not exist in the district and retailers have no access to supply fresh guava to supermarket. The retailer feedback in context of transportation facilities revealed that transport agencies are available in the district as well as in market premises and transportation charges for fresh guava are reasonable. The governments, NGO’s and chain partners do not provide transport facilities to retailers. Further, the cold chain facilities to transport fresh guava to neighboring district / cities / states are not available (Table 2). The results revealed that adequate normal and cold storage facilities for guava are available in district / market premises. Government / chain partners does not provide storage facilities to retailers. The retailers are not aware about national / international norms and standards for storing guava. Food processing industries for processing of fresh guava are available in district, but retailers have no access to supply fresh guava to food processing industry. The analysis on export market revealed that retailers have no access to export market, neither are they aware about the availability of export facilities in the country / city / district. The analysis further revealed that retailers do not receive information regarding export policies, storage, packaging and transportation as well as quality and safety requirements of guava from government agencies, NGO’s and chain partners. However, the retailers’ are aware about quality and safety requirements of guava because they collect regular feedback from consumers regarding their needs and preferences (Table 2). The retailers’ feedback for material flow revealed that efficient road system, loading and unloading facilities and cost effective transportation system are available to transport fresh guava from farm to market and market to retail shop. However, cold chain transportation system is not available to transport guava to retail shops. The retailers’ feedback in context of transparency revealed that information provided by chain partners regarding the marketing of guava is reliable and transparent. The information regarding application of fertilizers, chemicals, pesticides, insecticides and growth regulators for production of guava are not provided by the producers / chain partners. Production process, profit sharing and risk sharing amongst the chain partners are not transparent. The analysis in context to linkage revealed that retailers do not provide agricultural inputs, production technology, transportation, storage and financial loan to the producers for production and marketing of guava, but retailers have access to purchase fresh guava directly from producer. Further, retailers do not have access to supply fresh guava directly to supermarkets and food processing industries, neither do they have direct linkage with producer. However, they have direct and strong linkage with consumers (Table 2). The retailer feedback in context to relationship revealed that retailers have cordial and long term relationship with chain partners and consumers, but have poor relationship with government agencies, NGO’s, supermarkets and exporters for transportation, storage and marketing of guava. The retailers did not have joint business investment with producers, chain partners and processors. Moreover, the collaborative activities such as supply of agricultural inputs to producer and sharing information related to production process, jointly organizing promotional events and sharing risk and benefits between retailers, producers, wholesalers, government http://www.iaeme.com/IJM/index.asp 28 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives agencies and NGO’s are extremely weak. Financial institutions / banks have strong commitment with retailers to provide financial loan to operate their business. Retailers and chain partners have strong commitment and trust for open communication in marketing of fresh guava. However, government agencies, NGO’s and chain partners have no commitment and trust to provide information on national / international laws and regulation related to production and marketing of guava. The chain partners have no commitment with retailers to provide logistics to deliver guava to consumers timely. The joint venture / contract farming between retailers and producers do not exist in the current value chain of guava (Table 2). The analysis revealed that retailers are utilizing available technologies for transportation, packaging, storage and marketing of guava. The retailers are using information and communication technologies such as mobile phone, internet, electronic media etc. in order to understand consumers’ needs and preferences for sensory, quality and safety attributes. Furthermore, government agencies and NGO’s are not providing training to retailers for packaging, storage, transportation and marketing of guava. The retailers are aware about regulation for storage, packaging and transportation of guava in order to maintain nutritive value, appearance and taste for overall satisfaction of the consumers. The analysis further revealed that retailers coordinate with other chain partners to provide competitive price to the consumers (Table 2). Table 2 Value chain analysis of guava on retailer’s perspective, Kaushambi district, India (Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree = 5) Respondent Likert Score Variables Standard Mean devia tion  Market infrastructure  Proper road connectivity to transport fresh guava is 4.60a 0.50 available  Storage, cleaning, grading and packaging facilities 4.15b 0.49 are available  Market regulations imposed by the government are 2.70c 0.66 functional  The commission charges by the commission agent is 2.40c 0.68 reasonable  Proper banking facilities for financial transaction is 4.55a 0.51 available  Credit, Cooperative marketing and super market 1.65d 0.49 facilities are available  Transportation facilities  Transport agencies are available in district/city/farm 4.45a 0.51  Transportation charges are reasonable 4.20a 0.52 http://www.iaeme.com/IJM/index.asp 29 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Respondent Likert Score Variables Standard Mean devia tion  Adequate road facilities are available for efficient 4.35a 0.49 transportation of the fresh guava  Cold chain transport facilities are available in 1.85b 0.67 district/city/farm  Road tax for the transportation of fresh guava is 3.50c 0.61 reasonable  Transportation facilities is provided by the 1.55b 0.51 government / NGOs / chain partners  Pollution control certified vehicles used for 2.50d 0.51 transportation of fresh guava  Storage facilities  Normal storage facilities are available 4.05a 0.51  Cold storage facilities are available 4.55b 0.51  Storage facilities are provide by Government / 1.55c 0.51 NGO’s  Storage facilities are provide by chain partners 2.30d 0.80  Storage facilities are as per the national and 2.80e 0.41 international norms and standards  I have my own storage facilities 3.90a 0.91  Processing industry  Guava processing industry / unit exist in my town / 3.70a 0.47 city / district / area  The price paid by the guava processing industry / unit 2.55b 0.51 is good  Order placed by the Industry / unit for fresh guava is 2.75b 0.44 honoured  Proper storage and transport facilities are provided by 2.75b 0.44 the guava processing industry / unit  Selling fresh guava to food processing industry / unit 2.55b 0.51 is more profitable  Wastage of fresh guava is minimized due to the 2.50b 0.51 existence of food processing industry / units  Export market  Export market for fresh guava is available in the 2.45b 0.55 country  Export market for fresh guava is available in the 2.65a 0.51 district / city  Selling fresh guava for export is more profitable 2.40b 0.77  Information regarding the export policies and 2.64a 0.60 http://www.iaeme.com/IJM/index.asp 30 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives Respondent Likert Score Variables Standard Mean devia tion technical knowledge for production of export quality guava are provided by govt. / NGOs / chain Partners  Information regarding quality and safety requirements 1.64b 0.73 / standards for fresh guava of importing countries is provided by Govt. /NGO’s/ Chain partners/exporters  Govt. /NGO’s/ Chain partners provides logistic 1.55a 0.51 support to move fresh guava to export market  Small and marginal producers of guava have access to 1.45a 0.50 export market  Information flow  Information related to marketing, supply and demand 2.25a 0.64 of guava is provided by Govt. / NGOs / Chain partners / food processing industry  Information on market price is provided by Govt. / 1.70b 0.47 NGOs / Chain partners / food processing industry  Information on quality and safety requirements of 3.75c 0.44 fresh guava is provided by Govt. / NGOs / Chain partners / food processing industry / consumers  Information regarding profit sharing among the chain 1.55b 0.51 partners including producers is available  Information regarding transportation, storage and 1.50b 0.51 packaging of fresh guava is provided by Govt. / NGOs / Chain partners / food processing industry  Material flow  I am satisfied with quantity of fresh guava moved for 4.45a 0.51 marketing  Road transportation system for transporting guava 4.60a 0.50 from farm / Mandi Samiti to market place is efficient and cost effective  Cold chain facilities for transportation of fresh guava 1.65b 0.59 from Farm / Mandi Samiti / market are available  Loading and unloading facilities for fresh guava are 3.80c 0.89 available  Proper road transportation system for transporting 4.45a 0.51 fresh guava from Farm / Mandi Samiti to food processing industry is available  Transportation of fresh guava through rail transport 4.65a 0.49 system is available  Transparency  Information provided by producer/chain partners is 4.30a 0.57 adequate, genuine, reliable and transparent http://www.iaeme.com/IJM/index.asp 31 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Respondent Likert Score Variables Standard Mean devia tion  Information regarding the application of fertilizers, 1.85b 0.49 pesticides, insecticides and growth promoters is available and transparent  Information regarding the production process and 1.90b 0.55 marketing of guava is available and transparent  Production process, transportation, packaging and 2.40c 0.50 marketing are traceable and verifiable  Supply chain activities, profit sharing and risk 1.60b 0.50 sharing of chain partners are transparent  Business activities of the chain partners are 3.65d 0.49 transparent  Linkage  I provide agriculture inputs, new production 1.50a 0.51 technology, transportation facility and financial loan to the producer  I provide storage facilities to the producer 1.85a 0.67  I purchase guava directly from the producer 3.55b 0.76  I supply guava directly to supermarket/processing 1.60a 0.60 industries  I supply guava directly consumers 4.55c 0.51  My strong linkage with producer helps me to offer 1.65a 0.59 competitive price of guava to the consumers and reduces marketing cost considerably  My direct linkage with producers and chain partners 1.70a 0.47 provide good quality guava to consumers  Relationship  I am committed for long term relationship with 1.60a 0.50 producer Government agencies/NGOs/processer/supermarket/exporters  I am committed for long term relationship with 1.70a 0.57 financial institutions  I am committed for long term relationship with chain 4.50b 0.51 partners  I am committed for long term relationship with 4.70b 0.47 consumers  I have joint investments with producers/chain 1.60a 0.50 partners/processor  Mutual respect prevails in the chain starting from the 3.75c 0.55 producer to consumer  Contractual agreements are flexible and informal 2.60d 0.50 rather than rigid http://www.iaeme.com/IJM/index.asp 32 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives Respondent Likert Score Variables Standard Mean devia tion  Collaboration  I have agreement with bank to provide loan for my 4.50a 0.51 business  I have agreement with producer to supply agricultural 1.50b 0.51 inputs timely for production of guava  I and producer/government agencies/NGO’s 1.70b 0.47 exchange relevant and accurate information related to production process and marketing of guava  I and producer/government agencies/NGO’s jointly 1.55b 0.51 conduct the promotional events and search potential markets for gauva  I and producer/chain partners share risk and benefits 1.65b 0.58 associated with the production and marketing of guava  I and producer/chain partners share the knowledge 2.15c 0.58 and information regarding the forecast of supply & demand and new technologies in production and marketing of guava  Commitment and trust  The financial institutions have commitment with me 3.95a 0.60 to provide financial assistance timely in order to purchase guava  Government agencies / NGO’s have commitment 1.55bc 0.51 with me to update national and international laws & regulations related to production and marketing of guava  Wholesalers have commitment with me to provide 1.65bc 0.59 appropriate and economic logistics for the timely delivery of guava to consumer  I have commitment with producer for joint venture 2.00c 0.65 /contract farming for production and marketing of guava  I and supply chain partners have commitments for 3.65a 0.49 open communication in marketing of guava  I have agreement to purchase guava from producer at 1.80bc 0.52 actual wholesaler price  Cutting edge technology  I am using the advanced transportation and storage 4.50a 0.51 system for fresh guava  Govt. agencies / NGO’s provide the training for 1.65b 0.49 advanced technologies related to marketing of fresh guava http://www.iaeme.com/IJM/index.asp 33 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni Respondent Likert Score Variables Standard Mean devia tion  I am using the advanced packaging technologies for 4.30a 0.66 fresh guava as it reduces the losses during transportation and storage  I am using information and communication 4.60a 0.50 technology for marketing of fresh guava as it reduces the time and cost of marketing  I am using the advanced technologies for marketing 4.55a 0.51 in order to increase the quality and safety of fresh guava  I am using information and communication 4.30a 0.47 technology in order to understand consumer needs and preferences for fresh guava  Consumer insights  I am aware about the consumer preferences regarding 4.15a 0.67 production process of the guava  I am aware about the recommended rate of fertilizers, 3.60b 0.50 insecticides, herbicides and growth promoters in production process of guava in order to minimize health risk of consumers  I am following national and international laws & 4.25a 0.72 regulations for marketing and storage of guava in order to minimize health risk of consumers  I am following the appropriate storage and packaging 4.45c 0.60 techniques transportation and maintaining the nutritive value, appearance and taste of guava  I coordinate with various stakeholders of the supply 4.35c 0.59 chain of guava for overall satisfaction of the consumers  I always try provide competitive price to consumers 4.40c 0.50 for guava Within the construct, the values followed by same letter in superscript have no significant difference (p < 0.05). The variables which are weak in the current value chain of guava in context of retailers’ perspective include food processing industry, export market, transparency, linkage, relationship, collaboration and commitment and trust. The above mentioned variables which have low significance / weak are important components of value chain of guava. Therefore, improving the status of above mentioned variables may improve the existing value chain of fresh guava in Kaushambi district considerably as well as provide high quality and guavas at a safe and competitive price to consumers (Kongt, 1988, Esty, 2004; Park et al., 2004; Mol, 2006 and Zhao et al., 2007). http://www.iaeme.com/IJM/index.asp 34 editor@iaeme.com
Value Chain Analysis of Guava: Producer, Retailer and Consumer Perspectives 3.3. Consumer Perspectives The analysis in context to market infrastructure revealed that consumers are satisfied with the availability of supermarkets, retail markets, local markets and street vendors for purchasing guava and guava products. The consumer’s feedback on market infrastructure revealed that good road connectivity to different markets as well as public transport facilities are available. The analysis further revealed that consumers are fully satisfied with availability of wide variety of fresh produce, promotional offers and atmosphere at the market place. However, cooperative markets are not available in the district. The consumers’ feedback in context of information and material flow revealed that information on production process, application of fertilizers, pesticides, insecticides and herbicides as well as information on quality, safety and nutritive attributes of guava is not available to consumers. However, information on price, promotional offers and shelf-life of guava and guava products is readily available to consumers. The analysis revealed that consumers are fully satisfied with supply and availability of fresh and processed guava products in the market (Table 3). The consumers’ feedback on transparency revealed that production process including the application of fertilizers and chemicals, quality, safety and nutritive value of guava and guava products are not transparent. The analysis further revealed that processing techniques including the use of chemicals, colour and preservatives and packaging quality are not transparent. However, price and shelf life of fresh guava and guava products are highly transparent. The linkage / relationship between consumers and producers, wholesalers and food processing industries is weak in the current value chain of guava. However, consumers and retailers, as well as consumers and supermarkets have strong direct linkage and relationship. This is due to the fact that majority of retailers and supermarket officials conduct market surveys regarding consumers’ needs and preferences in relation to price, quality, safety, packaging and sensory attributes of fresh and processed guava products (Table 3). The consumer feedback on commitment and trust revealed that retailers and supermarkets have strong commitment to provide high quality and competitive price to consumers for guava and guava products. The consumers have trust on retailers and supermarkets to provide high quality, safe, nutritive and competitive pricing for guava. However, producer and food processing industry have no commitment with consumers to use appropriate technology for production, storage, transportation, processing and packaging of guava and guava products. The analysis on consumers’ perception regarding the quality attributes of fresh and processed guava products revealed that the most important determinants for purchasing fresh and processed guava products are freshness / taste, followed by colour, nutritive value, appearance, product information on packaging and texture. Further, the analysis revealed that consumers gave least preference to aroma, packaging and brand name (Table 3). The analysis on consumers’ perception regarding the safety attributes revealed that guava and guava products should be free of pesticides, insecticides and hormones. The analysis revealed that packaging was an important determinant for purchasing fresh and processed guava products. Consumers gave least importance to the place of origin, way of production, environmental sustainability and storage while purchasing fresh and processed guava products. The consumers perception regarding the service rendered by supplier revealed that price, followed by behaviour of supplier, promotion / discount, consumer attention, consumer support, store atmosphere, brand availability, presentation and convenient packaging are important http://www.iaeme.com/IJM/index.asp 35 editor@iaeme.com
Hena Imtiyaz and Peeyush Soni determinants to purchase fresh guava and processed guava products. The analysis further revealed that consumers gave least importance / preference to credit facilities, store timing, transaction time and recreation facilities. The overall results revealed that amongst the determinants related to service rendered by supplier, the price of fresh guava / processed guava products is the most important factor influencing the purchasing decision of consumers (Table 3). Table 3 Value chain analysis of guava on consumer perspective, Kaushambi district, India (Likert Scale: Strongly disagree = 1, disagree = 2, don’t know = 3, agree = 4, strongly agree = 5) Respondent Likert Score Variables Standard Mean devia tion  Market infrastructure  Availability of supermarket 3.90ad 0.64  Availability of retail market 4.70 b 0.47  Availability of cooperative market 1.50 c 0.51  Availability of Local market 4.45 b 0.51  Availability of street vender 4.60b 0.50  Good road connectivity to market 4.05ad 0.51  Availability of public transport to market 4.00ad 0.65  Availability of parking facilities at the market 2.75e 0.85  Availability of credit facilities at the market 1.55c 0.60  Availability of wide variety of fresh produce at the 4.40bd 0.50 market  Promotional offers at the market 3.95ad 0.60  Atmosphere at the market 3.80 ad 0.70  Information and material flow  Information on production process 1.55a 0.51  Information on fertilizers, pesticides, insecticides, 1.50 a 0.51 herbicide and growth regulator  Information on quality, safety and nutritive value 1.80a 0.62  Information on price 4.05b 0.51  Information on discount and promotional offers 4.10b 0.55  Information on shelf –life 4.10b 0.45  Regular supply to the market 4.45b 0.51  Availability of adequate quantity at the market 4.15b 0.67 http://www.iaeme.com/IJM/index.asp 36 editor@iaeme.com