Research empower rural women in the processing

 Research
Proposal for Doctoral Program

 

 

 

Assessment of Entrepreneurial Capacity of Smallholder Farmers
Across Cashew Value Chain

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Vanitha Prasannath

([email protected]

                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

I.                              
Title of the Study

 

Assessment of Entrepreneurial Capacity of Smallholder Farmers Across
Cashew Value Chains.

 

II.                           
Sri Lankan Cashew Value Chain

 

Cashew (Anacardium occidentale L.) is a multiuse
tree crop with uncountable economic importance especially to third world
countries including Sri Lanka (Adeigbe et
al., 2015).   It has the potential to offer basis of
livelihood for the cashew growers, empower rural women in the processing
sector, generate employment opportunities and create foreign exchange through
exports. When considering the nutritional aspect of cashew, it is a
highly nutritious concentrated form of food, providing a significant amount of
energy. Cashew
kernel comprises 47 percent fat however 82 percent of this is unsaturated fatty
acid, which drops the cholesterol level in blood. The greatest prominent
vitamins in cashew are Vitamin A, D and E, which support to integrate fats and rise
the immunity level. Cashew kernel is an important source of minerals such as
calcium, phosphorus and iron. Cashew kernel proteins comprise all the vital
amino acids such as Arginine, Histidine, Lysine, Tyrosine, Phenylalamine,
Cyctine, Methinonine and Valine (Shalini Yadav, 2010). At the same time, it delivers
additional energy compared to animal and fish diet (Mathew and Shobana, 2013). As
a result of the high value of cashew nuts even small pieces find a market in
confectionery products (FAO, 1992).  Manay et
al. (1987) has stated that the cashew nut kernel has a pleasing taste and
flavor which can be eaten raw, fried and sometimes salted or sweetened by
sugar.

 

Currently, cashew is becoming a significant
cash crop for farmers in Sri Lanka while there is countless potential for enlarged
production for the local market on top of for export. Cashew has considered as greater importance because of its superior
qualities and consumer preferences and recognized as the “World Tastiest
Cashew” in the international market (Surendra, 2012). The foremost buyers of Sri
Lankan cashew are Middle-East countries, Canada, USA, Israel, and Japan.

 

In Sri Lanka, it is pre-dominantly a small-scale crop which is assessed that out
of 77,809 cashew growing portions, 61,496 or 79 percent is cultivated in home
gardens (Surendra, 1998). Surendra (2012), depicted Cashew
Marketing Channel as shown in figure 1, where there are three types of
producers including small scale, large scale and Sri Lanka Cashew Corporation (SLCC) plantation growers. Cashew production has been
increasing with the surge in demand from the hotel and tourism sector. In 2012,
domestic production of cashew grew by 67 percent to 2,000 metric tons while
exports declined by around 53 percent to 145.8 metric tons reflecting surged
domestic demand. The extent of cultivation has been increasing significantly
after the end of the conflict (Central Bank of Sri Lanka, 2012). As per the SLCC,
the production trend has to catch up fast consequently during the next 10 to 15
years, the country will yield sufficient cashew nut to fulfill the native as
well as the export demand. SLCC also facilitates private cashew growers while
assisting processors and exporters who employ imported
raw cashew nuts in the processing of kernels for exports.

 

Figure
1: Cashew Marketing Channel                                       Source: Surendra (2012)

 

III.                        
Objectives of the Study

 

The main objective of this study is to analyze the
entrepreneurial capacity of the smallholder farmers and all the other actors in
the Sri Lankan Cashew Value Chain (CVC).

 

The
specific objectives are 1. To determine the factors and issues that influence
the accessibility of high value markets in the cashew supply chain 2. To
examine the structure, and degree of value addition at different stages of the CVC
3. To provide an assessment of progressing limitations and chances available
for top to bottom actors of the Sri Lankan CVC by making use of the Global
Value Chain (GVC) framework (Gerefi, 1994; Gerefi et al., 2005) 4. To identify chain of governance structure at
different stages of the value chain and 5. To detect how the entrepreneurship
activities are important in upgrading the value chain and recommend possible
strategies that policy makers could use to assist small-scale producers.

IV.                        
Research Questions

 

1.      Who
are the key actors and organizations of the CVC?

a.      
Who are the actors based at the
domestic and international nodes of the CVC?

b.     
How do these actors interact with
each other?

c.      
Who are the most powerful actor who
governing the CVC?

d.     
How much the degree of value
addition varies with the different actors of CVC?

 

2.      What
are the important entrepreneurial activities of different actors in the CVC?

a.      
What are innovative mechanisms handle
by the actors in the CVC in order to capture the market share?

 

3.      How
the entrepreneurial activity of different actors in the CVC captured?

a.      
Why the rent is encapsulated in CVC
of different levels?

b.     
What are the different types of
rent?

 

4.      What
are upgrading opportunities and limitations available for smallholder cashew
producers?

a.         
What are the adoption costs of upgrading
for small-scale producers / processors?

a.      
What are the switching costs for
small-scale producers in the occurrence of upgrading opportunities?

b.     
How do the chain facilitators such
as NGOs and state institutions play in offering or upgrading opportunities or
fixing limitations?

c.      
Who are actors or issues which
limit the upgrading option of small scale producers / processors?

 

5.      What
are the entrepreneurship activities that diverse actors have taken?

a.      
Provide all entrepreneurial
activities at different levels of CVC?

b.     
Who are the motivators for the
entrepreneurs at different levels of CVC?

V.                           
Literature Review

 

Many
factors linked with globalization will affect the spreading of returns/outcomes
whereas value chain analysis provides a valuable methodological tool for
explaining these expansions.  The value chain designates the complete
array of actions which are essential to take a product or service from source,
through the different stages of production (including a mixture of physical
transformation and the input of numerous producer services), distribution to last
consumers, and final disposal after usage (Kaplinsky, 2010). Value chain
approaches have been used by development experts and researchers alike to
capture the connections of increasingly dynamic (and compound) markets in
developing countries and to scrutinize the inter-relationships among various
actors involved in all stages of the marketing channel (Kaplinsky, 2000, 2004;
Dolan and Humphrey, 2000; Fitter and Kaplinsky, 2001; Ponte, 2001; Schmitz and
Knorringa, 2000; Giuliani et al.,
2005; Bair and Peters, 2006; Pietrobelli and Saliola, 2008; Bolwig et al., 2010).

 

Value
chain analyses are conventionally conducted through a combination of
qualitative and quantitative methods, featuring a mixture of primary surveys,
focus group work, semi-structured interviews, and secondary data sourcing. In a
traditional value chain analysis (Kaplinsky and Morris, 2001) the following
four main components are important: (i) a mapping and characterization of the
actors participating in the production, distribution, marketing, and sales of a
particular product (or products); (ii) an valuation of governance mechanisms in
the value chain, in terms of the structure of relationships and coordination
mechanisms that occur between actors in the value chain (Hess, 2008), so as to
identify the institutional arrangements that may need to be targeted to develop
capabilities, remedy distributional distortions, and increase value-added;
(iii) an analysis of opportunities for upgrading within the chain by different
chain actors; and (iv) calculation of the distribution of welfares of actors in
the chain to determine who benefits from participation in the chain and which actors
could advantage from increased provision or organization.

 

Small
holder farmers are dominant where they required to sell through intermediaries
as well as direct selling whereas large firms can sell directly to a retailer. These
buying networks can often be very complex, sometimes involving a number of
parties – for instance, local buyers and importing wholesalers. These intermediaries
may not only draw off much of the profit in a value chain, but also may play an
important role in enabling or blocking the capacity of small holders to upgrade.
International experience suggests that a key factor underlying the capacity of
small holders to insert themselves effectively into global value chains is when
they combine to engage in various forms of joint action. There are a diversity
of forms of joint action which might comprise: raising government for
assistance and undertaking joint activities, such as quality auditing (Nadvi,
1999), branding (Best, 1990), and especially with regard to learning-networks
(Barnes, 1999; Bessant and Tsekouras, 2001; Morris, 2001).

 

These
small holding farmers’ entrepreneurial activity and innovation orientation are necessary
to face the complex and multi-faceted environment in which they operate (Klerkx
and Leeuwis, 2008a, 2008b; McElwee, 2006). Entrepreneurship is not only a
formation of a new firm, but also with actions addressed to begin something new
(Kor et al., 2007). Thus, it applies
the term of innovative entrepreneurial orientation attitude in the farming context
to explain the concept of farmers’ openness towards new ideas, similar to
suggestions by other studies in organizational literature (Hurley and Hult,
1998). Agriculture understands the term innovation as new ways of doing things
or doing new things, which are actually introduced and implemented in everyday
practices, irrespective of whether they are new to the world or new only for
the individual (Knudson, et al.,
2004; Leeuwis, 2004). Klerkx and Leewis (2008a; 2008b) emphasize that farmers
need to develop or enhance their entrepreneurial attitude toward innovation in
order to recognize and apply valuable knowledge opportunities available in
their environment.

 

Entrepreneurship is a
crucial factor for the existence of smallholder farmers in an ever-changing and
progressively multifaceted universal economy. Further, smallholder farmers are
becoming more entrepreneurial and developing new skills and functional
capabilities in order to be competitive. Various small-scale farmers and
extension organizations realize that there is insignificant future for farmers
unless they develop more entrepreneurial in the method they run their farms
(David, 2012).

 

 

VI.                        
Methodology

 

The proposed research
will be necessary to describe the transformation process of cashew from raw
materials to final goods throughout the input-output structure of the CVC.  The primary data will be collected based on
two main surveys during the research period using pre-tested questionnaires.
The first survey will be a structured interview from cashew growers.   Stratified random sampling technique will be
used to select the cashew growers from potential cashew growing districts. The
second survey will be a case study by means of semi-structured questionnaire
used to gather information from other actors of the value chain such as
processors, wholesalers, retailers and exporters. The secondary data will be
gathered from government agencies (e.g. ministries, cooperation) and its
publications as well as from various research publications.  Value chain mappings and gross margin analysis
will be used to assess the margins along the chains.

VII.            
Limitations and Assumptions of the Study

 

VIII.         
Expected outcomes

It is expected
to show weak linkages within the cashew value chains with poor integration
among value chain actors and negligible participation of domestic market.   Value addition in terms of agro-processing
is anticipated at small scale levels through fundamental techniques limiting
the final product to low value markets.

 

IX.               
 References

 

Adeigbe,
O. O., Olasupo, F. O., Adewale B. D. and Muyiwa, A. A. (2015). A review on
cashew research and production in Nigeria in the last four decades. Scientific Research and Essays 10(5):
196-209.

 

Borsch, G. and Forsman, T. (2001).
The competitive tools and capabilities of micro firms in the Nordic food
sector. In The food sector in transition—Nordic Research, Proceedings of NJF
Seminar No. 313, June 2000 NILF – Report 2001:2.

 

Carter, S. (1998). Portfolio
entrepreneurship in the farm sector: Indigenous growth in rural areas?

Entrepreneurship and Regional
Development.
10(1): 17–32.

 

Carter, S. and Rosa, P. (1998).
Indigenous rural firms: Farm enterprises in the UK. International Small
Business Journal. 16(4): 15–27.

 

Central
Bank of Sri Lanka. 2012. Annual Report 2012. Colombo: Central Bank

 

David,
K. (2012). Entrepreneurship in Farming. Food
and Agriculture Organizations of the United Nations, Rome.

 

Gereffi, G., Korzeniewicz, M.
(Eds.), 1994. Commodity Chains and Global Capitalism. Praeger, London.

 

Gereffi, G., Humphrey, J.,
Sturgeon, T., 2005. The governance of global value chains. Rev. Int. Pol. Econ.
12 (1), 78–104

 

Kaplinsky, R., 2000. Globalisation
and unequalization: what can be learned from value chain analysis? Journal of Development Studies. 37 (2),
117–146.

Kaplinsky, R., 2004. Competitions
Policy and the Global Coffee and Cocoa Value Chains. Unpublished Paper Prepared
for the United Nations Conference on Trade and Development.

 

Kaplinsky, R., Morris, M., 2001. A
Handbook for Value Chain Research. Working Paper Prepared for the IDRC.
Institute for Development Studies, Brighton, UK.

 

McNally, S. (2001). Farm
diversification in England and Wales — what can we learn from the farm business
survey. Journal of Rural Studies. 17(2): 247–257.

 

Ponte, S. (2008). Some
lessons from global value chain analysis. Chronic poverty research centre:
India

 

Rich, K.M., Perry,
B.D., Kaitibie, S., 2009. Commodity-based trade and market access for developing
country livestock products: the case of beef exports from Ethiopia. Int. Food
Agribus. Manage. Rev. 12 (3), 1–22.

 

Rich, K. M., Ross, R.
B., Baker, A. D. and Negassas, A. (2011). Quantifying value chain analysis in
the context of livestock systems in developing countries. Journal of Food
Policy p.  214–222

 

ShaliniYadav, (2010). “Economics
of Cashew in India Report”. Development of Economic Analysis and Research,
NABARD, Mumbai., pp 01.

 

Surendra, B. B. B. (1998).
Integrated Practices for Cashew in Sri Lanka. In : Integrated Production
Practices in Cashew in Asia”. FAO/RAP Publication: 1998/12

Surendra, G. B. B. (2012). Sustainable
Cashew Production – Challenge And Opportunities Presented at
International Conference on  11-12- Octomber -2012 Panjim-Goa-India

 

Zmija,
J. (2001). Developing of
entrepreneurship of agribusiness in Ma?opolska region before EU enlargement.
Mi?dzynarodowa Konferencja Naukowa, Kraków, 11-12 stycznia 2001.

 

Manay, N.,
and M. Shadaksharaswamy (1987). Facts and Principles. Wiley Eastern Ltd, New
Delhi.

 (Mathew and
Shobana, 2013). (FAO, 1992).  Manay et al (1987)

(Surendra, 2012). Surendra (2012),

Dolan and Humphrey,
2000; Fitter; Ponte, 2001; Schmitz and Knorringa, 2000; Giuliani et al., 2005;
Bair and Peters, 2006; Pietrobelli and Saliola, 2008; Bolwig et al., 2010).

  (Hess, 2008),

(Nadvi, 1999), branding
(Best, 1990), (Barnes, 1999; Bessant and Tsekouras 2001; Morris 2001). (Klerkx
and Leeuwis, 2008a, 2008b; McElwee, 2006). (Kor, Mahoney, & Michael, 2007).
(Hurley & Hult 1998). (Knudson, et al., 2004; Leeuwis, 2004). Klerkx and
Leewis (2008a; 2008b) 

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