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Value chains of maize in India
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Changing Demand Patterns and Maize Value Chains in Asia
Bekele Shiferaw, Jonathan Hellin, Vijesh Krishna, Olaf Erenstein and Sika Gbegbelegbe
CIMMYT
b.shiferaw@cgiar.org
11th Asian Maize Conference November 7-11, 2011
Nanning, China
Outline • Changing demand (and supply)
patterns
• Maize value chains for
– food
– feed
– high value maize (vegetable maize)
• Projected future demand for maize
• Implications for research, production and value chain development
• Conclusions
Value chains • Kaplinsky (2000) defines the value chain as ‘the full range of
activities which are required to bring a product or service from conception, through the intermediary phases of production, delivery to final consumers, and final disposal after use’.
• Kaplinsky and Morris (2001) distinguish value-chain analysis from supply chains by emphasizing the:
– linkages both between and within actors in the chain
– Coordination and collaboration; joint investments; sharing of information for mutual economic benefit
• Value chain analysis includes mapping of key actors, relations, price flows, value added, marketing costs, profits, risk and benefit distribution and governance
3
Seed
Distributi
on &
Sales
Farm Level
Maize
Production
Commerc
ial
Seed
Producti
on
Foundation
Seed
Production
Plant
Breeding Crop
Marketing
Value Chains
Food, Feed
and other
Product
development
Food, Feed
and other
Product
Marketing
Consumer:
Consumption
Input Value Chain
Output Value Chain
Farmer
Consumption Farm
Income
Impact
Why Worry About Value Chains?
• Impact = f(technology, markets, policy and institutions)
• Information: awareness to make adoption decisions
• Seed access: translate desired demand to effective demand
• Capital and finance: credit and insurance services
• Markets access: market linkages, marketing costs, price volatility,
processing, storage, handling and distribution
– access to domestic and regional markets
– quality and standards in export trade
– food safety
– competitiveness, competition and fair prices
• Policies : subsidies, extension, regulatory rules, discretionary intervention, capacity building, and sustainability
Maize value chains and drivers of change
• Food maize
• Feed maize
– Poultry feed
– Swine feed
– Stover for ruminants
• Vegetable maize
– Sweet corn
– Baby corn
• Population growth
• Income growth
• Urbanization
• Globalization and trade
Key issues • Understanding changing demand patterns
• Research and policy implications for: – Adoption, production and supply (input value chains
for seed, fertilizer, equipment, etc)
– End user preferences, quality and standards
– Markets and trade (prices, trade policy, etc)
– Value chain development (integration, coordination, storage, processing, distribution)
– Farmer participation to capture new and expanding markets
– Equity and income growth for the poor
Maize globally and in Asia Region Annual average
area (million ha) Annual average
production (million tons)
Area (%) Production (%)
Eastern and Southern Africa 18.04 34.38 12.0 4.6
Western and Central Africa 11.12 17.4 7.4 2.3
West Asia and North Africa 2.17 13.63 1.4 1.8
South Asia 10.53 25.11 7.0 3.3
Southeast Asia and Pacific 8.26 25.92 5.5 3.4
East Asia 31.4 165.51 20.9 22.0
Asia 52.36 230.17 34.9 30.6
Mexico and CAC 9.26 26.84 6.2 3.6
Other Latin America 19.13 83.24 12.8 11.1
Eastern Europe 6.5 29.13 4.3 3.9
North America 33.57 330.89 22.4 44.0
Developing Countries 109.9 392.01 73.3 52.1
World 149.97 752.04 100.0 100.0
Maize net imports in Asia (1000 tons)
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000Ir
an
Iraq
Jord
an
Leb
ano
n
Sau
di A
rab
ia
Syri
a
Turk
ey
Yem
en
Ind
ia
Mya
nm
ar
Ne
pal
Pak
ista
n
Cam
bo
dia
Ind
on
esia
Lao
s
Mal
aysi
a
Ph
ilip
pin
es
Thai
lan
d
Vie
t N
am
Jap
an
Ch
ina
No
rth
Ko
rea
Sou
th K
ore
a
Trends in area under maize in Asia (million ha)
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Others
Pakistan
Viet Nam
Thailand
Philippines
Indonesia
India
China
Trends in maize production in Asia (million tons)
0
50
100
150
200
250
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Others
Pakistan
Viet Nam
Thailand
Philippines
Indonesia
India
China
Trends of maize yields in Asia (ton/ha)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
China
India
Viet Nam
Source: USDA, 2010
Thailand
Pakistan
Annual average growth rate of maize area (%)
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
2002-2004 2005-2007 2008-2010
Source: USDA, 2010
Annual average growth rate of maize production (%)
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
2002-2004 2005-2007 2008-2010
Source: USDA, 2010
Annual average growth rate of maize yield (%)
-5.0
0.0
5.0
10.0
15.0
20.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
2002-2004 2005-2007 2008-2010
Source: USDA, 2010
Demand for alternative uses
Average annual maize demand for food as percent of total maize demand in Asia (2005-2007)
0
10
20
30
40
50
60
70
80
90
Ye
me
n
Sau
di A
rab
ia
Turk
ey
Syri
a
Iran
Jord
an
Ban
glad
esh
Ne
pal
Pak
ista
n
Ind
ia
Sri L
anka
Mya
nm
ar
Cam
bo
dia
Tim
or-
Lest
e
Ind
on
esi
a
Lao
s
Vie
t N
am
Thai
lan
d
Ph
ilip
pin
es
Mal
aysi
a
Ko
rea,
DP
R
Ko
rea,
Re
p
Ch
ina
West Asia South Asia Southeast Asia and Pacific East Asia
Source: FAOSTAT, 2010
Average annual maize demand for feed as percent of total maize demand in Asia (2005-2007)
0
10
20
30
40
50
60
70
80
90
100
Leb
ano
n
Jord
an
Iran
Syri
a
Sau
di A
rab
ia
Turk
ey
Ye
me
n
Mya
nm
ar
Sri L
anka
Ind
ia
Pak
ista
n
Ne
pal
Ban
glad
esh
Van
uat
u
Mal
aysi
a
Thai
lan
d
Vie
t N
am
Ph
ilip
pin
es
Ind
on
esi
a
Lao
s
Cam
bo
dia
Tim
or-
Lest
e
Ch
ina
Ko
rea,
Re
p
Ko
rea,
DR
P
West Asia South Asia Southeast Asia and Pacific East Asia
Source: FAOSTAT, 2010
Average annual other demand of maize as percent of total demand in Asia (2005-2007)
0
10
20
30
40
50
60
70
80
90
100Tu
rke
y
Jord
an
Iran
Ye
me
n
Leb
ano
n
Syri
a
Sau
di A
rab
ia
Ind
ia
Pak
ista
n
Ne
pal
Mya
nm
ar
Ban
glad
esh
Sri L
anka
Lao
s
Ind
on
esi
a
Ph
ilip
pin
es
Tim
or-
Lest
e
Mal
aysi
a
Vie
t N
am
Thai
lan
d
Mo
ngo
lia
Ch
ina
Ko
rea,
DP
R
Ko
rea,
Re
p
West Asia South Asia Southeast Asia and Pacific East Asia
Source: FAOSTAT, 2010
Growth rates for food and feed demand in Asia
4.9
-7.5
4.4
14.7
5.8
9.4
1.9
6.4
0.9
7.4
5.3 6.7
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Asia (total) Central Asia East Asia South Asia South-EastAsia
West Asia
Annual growth rates for maize feed demand (%)
Annual average (1990-1999) Annual average (2000-2007)
1.1
8.6
3.2
-1.9
1.8
4.1
2.0
16.2
-0.1
5.2
1.4
6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Asia (total) Central Asia East Asia South Asia South-EastAsia
West Asia
Annual growth rates for maize food demand (%)
Annual average (1990-1999) Annual average (2000-2007)
International prices for major cereals (US$/ton)
21
0
200
400
600
800
1000
1200
Jan
Ap
r
Jul
Oct
Jan
Ap
r
Jul
Oct
Jan
Ap
r
Jul
Oct
Jan
Ap
r
Jul
Oct
Jan
Ap
r
Jul
Oct
2007 2008 2009 2010 2011
Maize Rice Wheat
Cost of production in India
22
624
818
693
0
200
400
600
800
1000
1200
1400
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Pad
dy
Wh
eat
Mai
ze
Bihar Chhattisgarh Gujarat HimachalPradesh
Jharkhand MadhyaPradesh
Uttar Pradesh Uttarakhand Average
Cost of production (Rs/qn)
Average cost of production, prices and farm profits (Rs/qn)
23
-200
0
200
400
600
800
1000
1200
Cost ofproduction
(Rs/qn)
Harvest price(Rs/qn)
MinimumSupport Price
(Rs/qn)
Harvest priceprofit (Rs/qn)
MS price profit(Rs/qn)
Cost of production and farm profits (Rs/qn) in eight states of India
Paddy Wheat Maize
Value chains for high value maize
Sweet corn
• Production and exports dominated by the United States and Europe
• However, the US is losing its market share of Asia’s importers to Thailand and China
• Advantage in year-round fresh production, lower labor costs, proximity to buying destination
• Improved quality of sweet corn products has led to an increase in Thailand’s exports.
• Thailand also has an advantage over US maize in Asian markets because it does not grow GM maize.
• Significant shift in the international trade of sweet corn for Asia
• Import of sweet corn has reduced by 12% while export is increased by 162% (2000 -2009)
• China and Japan are the major importers and China with Thailand and Malaysia major expeorter
World exports of sweet corn (1000 tons)
Source: FAOSTAT, 2011
0
200
400
600
800
1000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
World Africa Americas Asia Europe Oceania
Sweet corn exports from Asia (1000 tons)
0
20
40
60
80
100
120
140
160
180
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Thailand China Israel
China, Hong Kong SAR Singapore Malaysia
Indonesia Others
World imports of sweet corn (1000 tons)
-150
50
250
450
650
850
1050
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
World Africa Americas Asia Europe Oceania
Sweet corn imports into Asia (1000 tons)
0
20
40
60
80
100
120
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Japan China Republic of Korea China, Hong Kong SAR
Philippines Singapore Saudi Arabia Kazakhstan
Lebanon Others
Japan
China
South Korea
Asia's share (%) of sweet corn global trade
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Import Export
Baby corn
• Short cycle crop with a duration of about 60 days as compared to the 110-120 days for food grain crop.
• Labor-intensive high value crop with significant export demand
• Asia has emerged as the major producer and exporter (e.g. Thailand, India, Malaysia, China)
• Competitiveness in export markets depends on quality and production costs
• Income diversification and intensification for small-scale maize farmers - harvest multiple crops and
Baby corn • Contract farming with major seed companies
or processors to access inputs and for timely marketing
• Small-scale farmers need to meet quality standards to benefit from value chains
• High domestic demand in China and other SE Asia countries .Growing high end domestic demand in South Asia
• Thailand is the largest exporter in the world with over 61 thousand tons exported/yr
• Export markets: USA, Japan, Malaysia, UK (canned baby corn) and
• Asian countries (Hong Kong, Singapore, Japan and Malaysia) for fresh baby corn
Challenges • Access to inputs (new seeds, fertilizer, etc)
• High risk (drought, floods, etc) and lack of insurance
• Price volatility/seasonality
• High marketing and transport costs
• Inadequate farmer organization to achieve economies of scale
• Limited contract farming by food and feed processors for grain maize
• Storage and handling
• Timely marketing - especially for high value maize (perishable)
Future demand for maize in Asia (IMPACT Model Projections)
34
Projected maize demand in Asia
0
100
200
300
400
500
600
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
Southeast Asia
South Asia
East Asia
West Asia
North Asia
Asia
Projected demand for alternative uses
36
0
100
200
300
400
500
600
2000 2010 2020 2030 2040 2050
Total
Food
Feed
Biofuel
Other
Maize demand in East Asia
0
50
100
150
200
250
300
350
400
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
China
Mongolia
North Korea
South Korea
Japan
East Asia
Projected maize demand in South Asia
0
10
20
30
40
50
60
70
80
90
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
Afghanistan
Bangladesh
Bhutan
India
Nepal
Pakistan
Sri Lanka
South Asia
Projected demand SE-Asia
0
10
20
30
40
50
60
70
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns)
Kmer and Laos
Indonesia
Malaysia
Myanmar
Philippines
Simgapore
Thailand
Vietnam
Southeast Asia
Net trade: Huge imports to meet the rising the demand..
40
-120
-100
-80
-60
-40
-20
0
20
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
SoutheastAsiaSouth Asia
East Asia
West Asia
North Asia
Asia
Projected maize net-trade in SE Asia
41
-70
-60
-50
-40
-30
-20
-10
0
10
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
China
Mongolia
North Korea
South Korea
Japan
East Asia
Projected Maize Net-Trade for South Asia
42
-30
-25
-20
-15
-10
-5
0
5
2000 2010 2020 2030 2040 2050
Mill
ion
to
ns
Afghanistan
Bangladesh
Bhutan
India
Nepal
Pakistan
Sri Lanka
South Asia
Conclusions
• The rapidly changing demand for maize in Asia has opened new and untapped opportunities for agricultural transformation and income growth for poverty reduction in the region.
• This however requires an integrated approach (technology, markets and policy) that stimulates expansion in production to meet the growing demand while also diversifying market opportunities for resource-poor farmers to access and benefit from emerging markets.
Conclusions • Improving access to new seeds, complementary inputs and services to
expand production to meet the growing demand
• Diversifying market opportunities for maize farmers in less favored areas to access emerging markets
• Building market linkages between small-scale maize producers and other value chain actors
• Improving access to market information and other business services to rural producers
• Supporting organizational capacity of small-scale maize producers to achieve economies of scale
• Enhance skills in maize vegetable production and post-harvest processing that add value to products
• Policy support for small maize producer to understand and better satisfy product quality and delivery standards
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