Stakeholder collaboration models for exporting perishable agricultural commodities in Asia

This report presents an analysis of potential agricultural supply chain collaboration models appropriate for the avocado, lychee and mango industries in the Queensland horticultural sector. These models were prepared through a qualitative research approach, utilising direct engagement with the stakeholders as well as a stakeholder collaboration workshop. The design of the workshop activity was informed by a literature review, project scoping discussion with farmers and representatives of relevant industries, government and non-government organisations, as well as pilot testing. A key activity in the workshop was to ask clusters of stakeholders to focus on one horticultural product (e.g. avocado, lychee or mango), to identify existing and potential linkages amongst the entities in the supply chain, and their preferences for collaboration models in the sector. This task was repeated individually as well as in a groupwork format for each fruit. The key finding arising from this research process was that there were four categories of issues relevant to stakeholder collaboration models in Queensland horticulture. The first category related to the production and includes land availability, water supply availability, capital investment, cost of production, quality produce, genetics and green production system/regulation. The second category is related to logistics and processing. This category covers transport and technology needs, advanced agricultural technology and value-added products. The third category is related to marketing the products, including market access to certain medium and high-income consumers in Asia, brand and traceability and market discovery. The fourth category is the mode of collaboration which includes horizontal and vertical collaboration. The findings revealed that there is already some collaboration happening in the horticulture sector of Queensland. The study identified potential mechanisms for greater horizontal and vertical supply chain collaborations in exporting perishable commodities from Queensland. As well, the study found that individual horticultural industry representative bodies (such as Growcom) or processors are important in facilitating horizontal collaboration among farmers. Furthermore, it appears that vertical collaboration within agricultural supply chains in Queensland could be best led by either a single entity or a combination of several leaders, most likely being either processors, a genetics company and/or lead investor. With regards to mango supply chains for international markets, the stakeholders identified that this is already well-established in Queensland. However, horizontal collaboration is needed between small and medium scale farmers as well as value-added production facilities. This is particularly important to deal appropriately with any excess production occurring during November-January (i.e., the peak mango harvesting season across Queensland). Although the mango industry already has several different supply chains for exporting their produce to international markets, more strategic collaboration among the genetics industry, primary producers, processors and exporters is required in the longer term. This could be both process and management-oriented collaboration, which would achieve the benefits of continuous and consistent supply, reducing risk and more resilience in the international market. For the lychee industry, stakeholders described the existence of comparatively new supply chains with access to a few Asian markets such as Singapore, Hong Kong and Malaysia. Lychee is a high-value and high demand commodity across a wider spectrum of Asian markets than are currently being accessed. Therefore, the stakeholders recommended developing collaboration models led by producers, as well as technology and/or genetics firms, to generate access to other markets. Lychee has a wide range of varieties and not all of them are currently produced in Queensland. A genetics and technology provider could support the lychee industry by producing different varieties for different markets. Stakeholders discussing the avocado sector noted the existence of a complex supply chain and that there is already an appetite to simplify the current processes. As the demand for avocado is increasing in the Asian markets, Queensland producers cannot supply extra demand from international markets without a significant increase in production. Therefore, the stakeholders suggested that resource providers (e.g. Government, industry groups) and investor-led collaboration models would be best placed to achieve vertical integration of growers, processors and exporters, in order to position the industry well to supply to high-volume Asian consumers. In addition to fruit-specific models, the workshop participants identified that horizontal collaboration amongst farmers generally, in addition to vertical collaboration, has an important role to play to achieve effective agricultural supply chain collaboration and to increase export volumes to Asian markets. The stakeholders could not reach a consensus view about a particular governance mechanism to underpin such collaboration; however most suggested that the government (state and/federal) should facilitate the horticulture industry in the process of horizontal collaboration, particularly for product and contract standards, market access and conflict resolution. This particular research project was heavily focussed on identifying models appropriate for three specific industries (i.e., avocado, lychee and mango), however, the results are expected to also be broadly generalisable to other perishable and tropical fruit industries in northern Australia. This study has finally developed an action plan to translate the findings into practices. The action plan is divided into seven actionable steps including: developing leadership, quality control, contract management, forecasting and market analysis, policy and protocol development, brand development and export.