AKT AGRO-FOOD FEASIBILITY STUDY FIELD NOTES REPORT AFGHANISTAN · Afghanistan - AKT Agro-Food Feasibility Study Field Report (Draft) October 22nd to November 24th 2015 v Afghanistan

Afghanistan - AKT Agro-Food Feasibility Study Field Report (Draft) October 22nd to November 24th 2015

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AKT AGRO-FOOD FEASIBILITY STUDY FIELD NOTES REPORT AFGHANISTAN

BY PETER J. MIDDLEBROOK, KABIR KHAN ISAKHEL & SWAPNA NAIR

OCTOBER 15 TO NOVEMBER 24 2015

November 24th 2015


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Contents: Section A. Introduction........................................................................................................................ 1 Section B. Value Chain & Market Characteristics .............................................................................. 1 Section C. Product Selection and Justification .................................................................................... 5 Section D. Study Findings (Summary)................................................................................................ 5 Section E. The Two Selected Crops .................................................................................................. 12 Section F. Products Excluded and Justification ............................................................................... 23 Section G. Marketing and Financial Feasibility ................................................................................ 28 Section H. Technical Feasibility of an Intervention .......................................................................... 29 Section I. Resource & Environmental Feasibility ............................................................................ 29 Section J. Social and Institutional Feasibility................................................................................... 30 Section K. Value Chain Gaps & Bankable Entry Points ................................................................... 31 Section L. Potential Impact .............................................................................................................. 31 Figures: Figure 1. Market Connectivity is Key to Value Chain Development ................................................. 3 Figure 2. Map of Afghanistan Field Visit Areas ................................................................................. 4 Figure 3. Afghanistan Product Feasibility Ranking for Pre-Selected Products (2013)....................... 6 Figure 4. Broad Process for Product Short Listing and VC Investment.............................................. 7 Figure 5. Possible Macro, Meso and Micro Intervention Stakeholders ............................................ 11 Figure 6. Promising Agricultural Sub-Sectors in Afghanistan.......................................................... 12 Figure 7. Export, Domestic Consumption and Production of Almonds (2001-09) in MT................ 13 Figure 8. Export (Quality and US$ Value) of Almonds (2001-09)................................................... 13 Figure 9. US Dominates Global Production ...................................................................................... 17 Figure 10. Afghanistan Almond Process VC Analysis – Domestic and Export Market Prices ....... 19 Figure 11. Afghanistan’s Major Export Destinations for All Products by Value (US$) in 2013 ..... 22 Figure 12. Composition of Fruit, Vegetable and Nut Exports in 2013 (US$374 million) ................ 23 Figure 13. Almonds Jobs Creation Impact Per USD/Job .................................................................. 30 Figure 14. Projected Net Income by Crop (US$ Per Hectare 2010) ................................................. 31 Tables: Table 1. Comparative Yields for Sample Pre-Selected Products ...................................................... 10 Table 2. Low Access to Finance as a Major Constraint on Market Expansion................................. 11 Table 3. Afghan Almond Price by Traders and Transport Cost in 2014........................................... 18 Table 4. Almond Product Compliance with AKT Selection Criteria ............................................... 20 Table 5. SWOT Analysis for Almond Marketing and Financial Viability ....................................... 28 Table 6. Estimate of Jobs in Tree Crop Horticulture Sector ............................................................. 30 Table 7. Immediate Physical Integration Partners Include................................................................ 31 Annexes Annex 1 List of Key Informants Annex 2 List of Documents Consulted Annex 3 Primary Market Connections for Grapes Annex 4 Primary Market Connections for Onions


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NOTE:

This report is a field notes report, as required under the contract. It is not the final product report and it excludes considerable analysis conducted in relation to trade flows, volumes, values, revealed

comparative advantage and other factors. Moreover, given the large number of pre-selected products (12-14) across three different countries, it is obviously not possible to review the entire Value Chain

of 36 plus products in this way. This feasibility study therefore identifies products meeting AKT criteria set at project kick-off.

The final Country Section Report will be in the Main Report.


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Afghanistan Technical justification for Selected Products

Exports # Product Justification RCA US$ Million

Share in GDP

Share in Global

SELECTED 1 Almonds Afghanistan RCA for almonds (both in shell and

shelled) is one of the highest across all products studied. Shelled almonds are the product with the highest share (2%) in Afghan total exports when compared to all other identified products. Afghanistan’s global export share of almonds in shell are 0.45% and that of shelled almonds is 0.40% which is also among the highest in preselected products. While India still is the largest market to which shelled almonds are exported (61%), a fair share of exports go to EU countries as well(Particularly Germany) indicating diversification of exports and familiarity with the large markets thereby underlining a potential for future increase in market shares. US$1 8.2 million in export of shelled Almonds in 2014 and though there has been volatility in volume the last few years have clearly been showing an increase in exports. World Almond production/exports continue to track growing demand from established and developing markets. ❚ Leading RCA ❚ Quadrupled production since 2003 ❚ Global demand to double ❚ Non-perishable ❚ Strong forward & backward linkages ❚ Value added through processing ❚ Value added through Marketing ❚ Strong employment multipliers

0.98 (In Shell) 0.98 (Shelled)




NOT SELECTED 2 Apricots While Apricot production volumes are lower

than a few of the other pre-selected products there is a clear upward trend. In fact from 2003 to 2013 volumes have increased by 115%. Exports have also significantly increased during this period by more than 800% having increased from US$ 0.6Mn to US$ 6.4 Mn, RCA values are the highest. And exports share in Afghan total exports across all commodities and share in world exports of apricots is high, being lower only to almonds and grapes.

0.99 6.44 0.73 1.29

3 Melon Melon production in Afghanistan has fallen by 51% from 2009 to 2013 and the overall trend since then has been downwards. Exports of melons have also been falling during this period. Competitiveness is this product is fast being eroded as indicated by very low global share of Afghan exports

0.83 0.88 0.10 0.05

4 Grapes Grapes are a well doing product given high RCAs, high trade values and global shares. But a mature product.

0.98 (Fresh) 1 (Dried)

49(Fresh) 65(Dried)

7.5 3.8

5 Pomegranate Not enough information was available to do an in-depth analysis. It is assumed that lack of information on FAO/WTO data portals could be an indication of lack of significant trade/production

NA NA NA NA

6 Lemon Production/Trade data not available for NA NA NA NA


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Afghanistan Technical justification for Selected Products

Exports Afghanistan indicating lack of significance of the crop to the country

7 Strawberry Not enough information was available to do an in-depth analysis. It is assumed that lack of information on FAO/WTO data portals could be an indication of lack of significant trade/production

NA NA NA NA

8 Onions and Shallots

Onions have high potential but is a mature product in terms of investment already gone into a product development hence not been chosen.

0.98 11.96 1.36 0.45

9 Pistachio Pistachio production in the country has fallen since the peak it reached in 2007. Productivity has also reach a plateau over the last few years. Exports have also fallen in this period by 36% indicating a reducing competitiveness among the selected products

0.99 15.89 1.8 0.66

10 Walnut While walnut production has shown an increase in the last few years the volume of trade and production is extremely low to be compared a significant product.

-0.61(In Shell) 0.82(Shelled)

0.009 0.001 0.001

11 Alfalfa Not enough information was available to do an in-depth analysis. It is assumed that lack of information on FAO/WTO data portals could be an indication of lack of significant trade/production

NA NA NA NA

12 Potato Potato production volume and export values have shown a dip over the last few years. RCA ,export values and global/regional shares are also very low compared to the selected products

0.72 0.82 0.09 0.031


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Section A. INTRODUCTION This short report is an interim product, aimed at reporting the most significant findings in relation to the AKT feasibility study being supported by UNDP IICPSD. Government has outlined the particular potential of Almonds (good upside and non-perishable) and Apricots (higher value crop that can also be dried) in particular, though they also outlined the potential of already established crops such as Grapes, Potatoes and Pomegranates. Though grapes have a cold storage problem, potatoes are easily traded with Pakistan and pomegranates from the south are some of the very best the world has to offer. In addition to the other products pre-selected, this report provides the results of field work and justification for product selection. Afghanistan is the more significant producer and exporter among the AKT countries for most of the pre-selected products. In terms of production, Afghanistan produces the most in terms of volumes in Grapes, Potatoes and Melons. Among the AKT countries, Afghanistan is also the largest producer of Apricots, Almonds, Walnuts and Pistachios, though overall production volumes are lower than the previously identified products. Grapes are the product in which Afghanistan seems to be the most competitive among all the pre-selected products with the country, exporting fresh grapes worth US$49.02 Million and dried grapes worth US$65.82 million in 2014. Dried grape (raisin) in fact is the product in which Afghanistan has the largest global export share, of 3.8%. The share of Afghan exports in global share of fresh grapes is 0.59%. Shelled Almonds (export value of US$ 18.2 million and a global export share-of 0.40%), Pistachios (US$15 million – global share of 0.6% share), Onions (US$11.96 million - global share of 0.45% share) and Apricots (US$6.45 million - global share of 1.3%). India (Raisins, Almonds, Walnuts, Pistachios) and Pakistan (Onions, Apricots, Melons) are two of the key markets for many products for Afghanistan. Kazakhstan (Potatoes) and some EU countries (Raisins, shelled and unshelled Almonds) are also markets for Afghanistan for some products to a lesser extent. This indicates a familiarity that Afghanistan exporters in at least some products might have towards the EU market, which is one of the largest markets for many products. Afghanistan’s agricultural productivity however remains some 50% below its pre-war level, and crop yields are only half those of its regional neighbours such as Pakistan and India. It is the intention of this study to identify the most feasible product of those pre-selected by the AKT Consortium, with the greatest potential in terms of meeting the investment criteria set. The two products identified here, based on empirical findings, will then be further developed in the main report, to include detailed value chain analysis and value chain entry points, to maximize upside value for that product and producers. Of the 12 + value chains pre-selected, two were chosen for deeper analysis. It should be noted however that given the high seasonality in production and prices and widespread political, economic and security uncertainty, the results provided here reflect evidence collected and consensus reached so far. Section B. VALUE CHAIN & MARKET CHARACTERISTICS Currently, around 12 % of Afghanistan’s agricultural area is utilized, compared with 87 percent for India and 78 % for Pakistan. As of 2012, only 20 % of agricultural land is equipped for irrigation compared with 37 % and 76 % in India and Pakistan respectively. Moreover, irrigation systems operate at very low efficiency rates of about 25 %. In recent years, yields in Afghanistan have reached an average of 2.1 tons of cereal per hectare, versus 3.8 for the rest of the world, 2.7 for Pakistan, and 4.4 for Uzbekistan. 1

1 Includes wheat, rice, maize and barley. Afghanistan Economic Update, World Bank, April 2013; FAOSTAT; Afghanistan: Priorities for Agriculture and Rural Development, World Bank; “Food for Thought: Analysis of Agriculture Financing in


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Value chains are an integral part of strategic planning for many businesses today, though in most countries smaller businesses do not have the resources to conduct such studies themselves. The public sector and aid community can assist in sharing that burden, making the results available to the private sector. As the agricultural economy generates the majority employment (around 60% nationally) and the majority of exports (about 55% of exports) with an import substitution potential over 20 %, options for investment appear considerable. Agricultural labour is also dominated by women, and as the production process is so labour-intensive, options for increasing labour efficiency through technological transfers and know-how are attractive. A value chain refers to the full lifecycle of a product or process (e.g. walnuts), including material sourcing, production, consumption and disposal/recycling processes. Value chain and market characteristics therefore generally focus on: ❚ Inbound logistics; ❚ Operations; ❚ Outbound logistics; ❚ Marketing and sales; ❚ Services; and, ❚ Secondary activities such as procurement, infrastructure, finance, human resources etc. A value chain approach therefore describes the full range of activities that firms and workers contribute to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer, though many of these activities within the Afghanistan agricultural economy are poorly conducted or absent. The activities that comprise a value chain can be contained within a single firm or divided among different firms, or small holders. Value chain activities produce agricultural goods, and can either be contained within a single geographical location or spread over wider areas. Afghanistan currently lacks information systems for apprising value chain entities about market conditions, input supply costs, new technology, access to business services and improved farming practices. Moreover, at the micro to meso level, agribusiness lack the relative sophistication of larger operators, and there is very little export promotion support. Moreover, poor understanding of customs procedures and access to agricultural credit undermine both production volumes and export potential. Certification in general is unavailable. In general, for agricultural products, the value chain comprises thousands of smallholder farmers who sell most of their crops to traders at farm gate prices. While a few larger farmers also trade, the reality is that there are few market aggregators. Markets too remain incredibly fragmented, and much of the value or production marketed to Pakistan is merely reflective of the porous borders. As a result, still emerging from a low base, there is considerable upside potential if a set of basic value chain constraints can be overcome. The results of discussion with nearly 100 farmers, traders, wholesalers and retailers led to the following set of constraints being identified, though there are others:

Afghanistan”, Economic Literacy and Budget Analysis Group; United States Department of Agriculture (USDA) reports; MOCI internal data; Dalberg analysis.


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❚ Input suppliers: Lack of investment capital, adulterated products and lack of producer cooperative structures leads to complex and costly supply lines;

❚ Producers: Lack of knowledge of improved cultivation techniques and improved seeds to increase yields;

❚ Traders: Traders lack cold chain storage systems, and as a result perishable produce can

simply not find export markets despite competitive prices and often superior quality; ❚ Processors: Lack of appropriate technology and knowledge to process products for domestic

and export consumption; and, ❚ Exporters: Lack of trade credit, lack of market information, inhibitive transaction costs and

lack of value chain and transport infrastructure to ship to export destination markets in bulk. So how does this translate at the farming level? The majority of participants along the VC have incentives to upgrade to meet the demands of foreign and local markets. However, current constraints force farmers and traders to be risk averse; particularly given the small size of landholding for most producers, political and security challenges and the ongoing devaluation of the Afghani, which while good for exports increases the cost of inputs. As a result, the analysis in this report focuses on identifying the value chains with the highest rates of return to investment as well as “entry points” for value chain investment. The ‘entry points’ imply investments at the value chain structure, relationships, market linkages, on strategic or operational levels. They provide effective leverage points for working with or influencing the value chain actors and increasing impact on the AKT criteria set. One of the many factors critical to vertical integration is market connectivity. Sadly, Afghanistan remains a remarkably (though improving) unconnected place, though traders do a remarkable job in gaining income from trading in often very difficult market environments. As Figure 1 below outlines, if Afghan products are to reach export markets further afield, access, mobility, availability and utility must be improved. The results of the recent RECCA VI discussion highlight the potential for improved regional integration and economic cooperation, which will lower transactions costs and expand market access.

Figure 1. MARKET CONNECTIVITY IS KEY TO VALUE CHAIN DEVELOPMENT


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Figure 2. MAP OF AFGHANISTAN FIELD VISIT AREAS


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Section C. PRODUCT SELECTION AND JUSTIFICATION The AKT Consortium established the following broad criteria for final selection of chosen products. In fact, the application of these criteria counts out a number of products without further analysis, as this field report makes clear. The broad product final selection criteria are outlined below: ❚ Product export growth potential; ❚ Product import substitution potential; ❚ Product volume which could impact trade balance; ❚ Product potential for cross border value chains among 3 countries; ❚ Product employment multiplier potential; and, ❚ Appetite for public and private investment. The current negative political, security and economic climate, including reductions in external assistance, have led to broad scale economic contraction over the past 24 months. The Chief Economic Advisor to the Government of the Islamic Republic of Afghanistan (GoIRA) estimates that anywhere between US$10 – 12 billion has left the country to the Gulf States and Turkey, as a result of the economic downturn. However, Afghan agricultural markets have proven fairly resilient and production is more affected by cyclical drought, though loss of national purchasing power has led to a downward pressure on product prices. Traditional trading partners in Pakistan and India are the main export routes, though the consultant team observed Afghan traders operating deep into Tajikistan also. Figure 3 below provides an overview of official exports (USD) for many of the pre-selected products. They are ranked according to complexity and distance (see definitions inserted). While the value of imports in recent years has led to a considerable trade imbalance, the reduction in external flows has improved the trade balance at the expense of growth. Exports in 2013 were US$722 million. While the team is aware that there are considerable informal flows, they are difficult to value and assess. Flows of potatoes and onions into Tajikistan, Pakistan and Iran for example, are probably undervalued by many times. Given that the aim is to enhance official product exports, these results give us a general understanding of the ranking of products by value, with implications for trade balance and foreign currency reserves. Section D. STUDY FINDINGS (SUMMARY) FIELD VISITS The two Geopolicity staff (Dr. Peter J. Middlebrook and Kabir Khan Isakhel) were deployed to Afghanistan, supported by a number of national enumerators who collected prices from multiple markets. The main markets assessed were in Kabul, Herat, Mazar, Jalalabad and Kandahar, as well as local villages in Parwan province. The security situation constrained survey work, though key informant analyses extended to more than 70 farmers, traders, wholesalers, retailers and exporters. The list of the key informants with whom the team held discussions is presented in Annex 1. The Report presented here is based on a synthesis of information gleaned through these discussions, together with documents reviewed (Annex 2). SELECTION OF COMMODITIES Afghanistan exported some US$722 million in exports in 2013, with official agricultural (vegetable and nut) exports reported at around US$374 million, or 52% of total exports. Within this context, and the revealed comparative advantage of products for export, we have been able to justify excluding certain products from the reduced list. That said, as this early field work write up does not include the macro trade, country benchmarking and competitiveness analysis, the team has focused exclusion for justifiable reasons, as outlined in the main report.


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Figure 3. AFGHANISTAN PRODUCT FEASIBILITY RANKING FOR PRE-SELECTED PRODUCTS (2013)


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FIELD BASED PRODUCT SELECTION Given that every product has growth potential under the right circumstances, it is critical to assess the major agro-ecological, investment climate and doing-business environment constraints impeding increasing productivity and market penetration. Our product selection is therefore based on a number of basic generic steps that combine field-based analysis with analysis of trade and other factors. ❚ Choosing priority sectors for value chain interventions; ❚ Designing informed strategies across the value chain; ❚ Conducting benchmarking and gap assessments of value chains; ❚ Upgrading and deepening the value chain; ❚ Identifying Business Models for Replication; ❚ Capturing value through forward and backward integration; and, ❚ Horizontal collaboration - creating and taking advantage of economies of scale. This analytical process, in line with the value chain methodology outlined in the inception report, allows us to justify which product meets the criteria set. Our discussions in various provincial centres and surrounding villages provide invaluable information for us to assess the likelihood of a targeted investment leading to a replicable model, beyond the life of any AKT support. For that to happen, while complying with set criteria, investments must focus on: ❚ Products with high, sustained and inclusive growth; ❚ Increasing agricultural productivity, including irrigation, access to credit and finance and

output markets, energy, and extension and regulatory services; and, ❚ Expanding employment opportunities for the majority of people trapped in low-skills labour

markets. The Afghan agricultural sector is expected to absorb a large proportion of an estimated 400,000 – 500,000 young people entering the labour market annually, and so field based analysis will need to be supported by analysis of employment multipliers also.

Figure 4. BROAD PROCESS FOR PRODUCT SHORT LISTING AND VC INVESTMENT The World Bank reports that over 800,000 Afghan households are cultivating horticultural crops, and farmers reported that high value crops give a far higher rate of return to farmers than staple crops such as wheat/rice. Afghanistan’s climate is highly suited to high quality fruits and vegetables production, and it remains the centre of origin of various horticulture species, such as pistachio, walnut and pomegranate, many of which have international interest for their quality - pomegranates, apricots, almonds and raisins.


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Analysis shows that high value crops have constituted over 64% of all agricultural exports since 2002. Of high value crops, dried nuts are consistently the largest contributor to exports, followed by fresh fruits. Out of dried fruits and nuts, raisins and almonds are the largest contributors to export value, followed by pistachios. Out of fresh fruits, grape, melon and pomegranate represent the largest exports, though exports of medicinal plants is led by liquorice root and Asafoetida (Hing). Traders, interviews with MRRD and MAIL staff, also indicated that sesame seed is beginning to emerge following years of decline, and saffron is a new entrant to the market, which is a promising high value crop. LEVEL OF TECHNOLOGY EMPLOYED BY FOOD CROP FARMERS Production and marketing techniques have not changed for a number decades, presenting options for value addition. Most farmers interviewed – particularly for perishable products – complained about the absence of producer and marketing cooperatives and the weaknesses of the extension system. It is therefore clear, based on field observations, that: ❚ Traditional and Outmoded Technology: Most technology is traditional, and there are very

few intensive commercial orchards, which would appear to indicate considerable gains for high input agriculture in commercial sectors;

❚ Lack of Product Uniformity: There is apparently virtually no uniformity because of the range of varieties used, and many species are propagated without grafting, including walnuts, some almonds and other stone fruits; and,

❚ Poor farming practices: Farming practices are also traditional and generally very poor, using outmoded technology. Examples include, but are not at all limited to: o Poor pruning for pomegranates; o Over-irrigation (every 7-15 days) leading to depletion of critical minerals; o Over-deep planting leading to delayed bearing, which given short growing seasons

impacts yields and other factors; o Weak orchard floor management practices; o Almost complete absence of cleaning and packaging; o High incidence of disease not combated due to lack of inputs and weak purchasing

power; o Labour intensive methods; and, o No integrated pest management systems in place.

There are very few intensive commercial orchards, which indicates considerable gains for higher input agriculture in the commercial sector When lack of appropriate technology is combined with the

Summary of Afghanistan’s Land Resources ❚ Total area : 652 000 square km - 12% is arable; ❚ 3% forest cover; ❚ 46% permanent pasture; ❚ 39% is mountainous, unusable for agriculture; ❚ About 70% of rural households have access to land (through ownership, lease,

sharecropping); ❚ Government claims ownership over more than 80% of Afghanistan’s land resources; ❚ Around 44% of HH have access to irrigated land (aver. 1.2 ha); ❚ About 26% of households have access to rain-fed land (aver. 3.2 ha); and, ❚ The percentage of households with access to land has increased over the period between

2005 and 2008 and slightly more between 2011 and 12 but average access to irrigated land holdings is decreasing.

Source: World Bank Land Policy Note, 2014


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current land situation (see Box), productivity (yields, area under production and volume) are negatively impacted.


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As a result, yields for major products remain low (Table 1), significantly impacting profitability, which again undermined re-investment back into product development.

Table 1. COMPARATIVE YIELDS FOR A SAMPLE OF PRE-SELECTED PRODUCTS

Grapes Yield (Mt/Ha) Watermelon Yield (Mt/Ha) India 24.49 China 32.90 United States of America 16.65 Turkey 30.36 China 11.19 United States of America 28.76 Turkey 9 to 11 Pakistan 21.00 Iran 9.51 Iran 20.90 Afghanistan 8.50 Turk-Uzb-Taj 13.14 Turk-Uzb-Taj 5.30 India 12.75 Pakistan 4.14

Afghanistan 12.30

Almonds Yield (Mt/Ha) Potatoes Yield (Mt/Ha) United States of America 3.46 United States of America 41.15 Pakistan 2.47 Turkey 25.99 China 2.20 Iran 21.00 Turkey 2.11 India 18.49 Afghanistan 1.40 Pakistan 16.52 Iran 0.91 Turk-Uzb-Taj 14.79 Turk-Uzb-Taj 0.67 China 14.67

CONSTRAINTS EXPERIENCED BY THE FARMING COMMUNITY Field results with farmers, traders, processors, wholesalers, retailers and exporters highlight the following major constraints impacting productively expansion: ❚ Political and security problems; ❚ Extension system not working and under-resourced; ❚ Shortage and high cost of finance; ❚ Shortfall of electricity; ❚ High tax rates; ❚ Farmers and traders reported high logistical costs, often equalling 100 per cent or more of

farm gate prices; ❚ No recognition of collective rights (e.g. grazing lands); ❚ Afghanistan is not part of a major trading block; ❚ No counter-season opportunities with major trading partners; and, ❚ Lack of product certification considerably undermines expansion of export markets.

Land Tenure System Constraints

The existing land tenure system (the legal and customary system which defines how land (property) is held and managed has a significant influence on the agricultural sector, which is the cornerstone of rural development, (agricultural) growth, agribusiness development and employment generation for the foreseeable future. The current institutional framework for land management and administration is not conducive to economic development:

❚ Out-dated systems, overlapping responsibilities, lack of capacity at local levels, conflicting systems of land ownership, and uncertain or incomplete legal frameworks, compounded by decades of conflict and widespread displacement, result in competing claims to land and conflicts between individuals, among communities, and between citizens and the State.

❚ Land disputes constitute the majority of legal disputes; and , ❚ Lack of land tenure security – tenure security defined as landholders’ confidence that neither the

State nor other people will interfere with the landholder’s possession or use of the land for an extended period of time.


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Access to finance was mentioned by all major players in the value chains as a major constraint, and the crisis in the banking and finance sector is not going to be resolved anytime soon. As a result, VC development will need to recognize, and either work around or with this constraint. The microfinance sector in Afghanistan grew steadily until 2007 and has faced a major consolidation since then. The number of borrowers has been decreasing (with a slight increase in 2013) and the speed of loan growth has slowed down. The sector still faces financial sustainability challenges. MISFA, the apex institution, had a peak portfolio of $127m for all 16 MFPs in 2009. As of November 2013, MISFA has a gross portfolio of $91m for 4 microfinance partners, with 157,000 active clients and 86,700 active borrowers. There are two main institutions outside MISFA: FINCA and IIFC. The current portfolio is concentrated in FMFB (130,700 active clients and 62,800 active borrowers) Two microfinance institutions exited the sector (BRAC and ASA) in 2013 (World Bank, 2014).

Table 2. LOW ACCESS TO FINANCE AS A MAJOR CONSTRAINT ON MARKET EXPANSION

Afghanistan Nepal Pakistan South Asia

Yemen MENA

% of firms with a bank loan/line of credit 5.7 (2014) 39.1 8.6 30.0 8.1 6.0 % of firms using bank investment finance 2.2 (2014) 17.5 9.7 29.7 4.2 5.6 Credit to Private Sector as a % of GDP 4.1 (2012) 55.8 16.9 47.0 4.6 34.3

Source: World Bank Enterprise Surveys and World Development Indicators POTENTIAL INTERVENTION AREAS UNDER UNDP’S IICPSD The final report will provide details of proposed macro, meso and micro areas of intervention for the two initially selected products. These two products will subsequently be pared down to one product as the main area of investment under the AKT. What is clear is that a project such as the AKT can do nothing to directly impact constraints such as finance, land policy, political instability, insecurity and corruption in the trading system. As a result, the final proposed intervention areas will be very much focused on specific geographical areas and on a number of core actions, which would add considerable value to existing systems, with a focus on expanding export market potential. Critical here is understanding that US$ billions have already been committed to agricultural and product development, and as a result, any action should have its own comparative advantage in relation to other ongoing investments. Figure 5 provides a summary of potential value chain actors to receive targeted support.

Figure 5. POSSIBLE MACRO, MESO AND MICRO INTERVENTION STAKEHOLDERS


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Section E. THE TWO SHORTLISTED CROPS ALMONDS Almonds have been mentioned as a key export product not just because Afghanistan has a comparative advantage for this nut, but also because it is a non-perishable item that can be readily stored and exported. Out of dried fruits and nuts, raisins and almonds are the largest contributors to export value, followed by pistachios. Demand is seasonal for almonds, with market entry dates of September to January reported by traders and exporters, and product quality must be assured. As a result, it is important to maintain consistent supply and quality throughout this normal marketing season which would affect quantities and price. As a result, if higher export values are to be achieved, both supply and demand sides of the market need to be carefully considered, with the aim of better delivering common genetic materials and consistent grades and standards. 2 Afghanistan is the only significant exporter of almonds among the AKT countries with a global export share of almonds in shell being 0.45% and that of shelled almonds being 0.40%. Afghanistan is ranked as one of the top producing almond counties in the world, though its global market share is small. The main export market is India which imports almost all as shelled almonds, except for a small but reportedly insignificant export value to Pakistan. The markets to which Afghanistan exports shelled almonds are more diverse. While India still is the largest market to which shelled almonds are exported (61%), a fair share of exports goes to EU countries as well – particularly Germany. What is clear is that Afghanistan has considerable potential for expanding exports to export destinations such as India, but also increasing exports to the Gulf States and the EU also.

Figure 6. PROMISING AGRICULTURAL SUB-SECTORS IN AFGHANISTAN 2 Afghan almonds belong to one of two fundamental classes: soft-shell almonds and hard/medium-shell Almonds. Both hard- and soft- shell classes are composed of several types, and each type often has multiple varieties. As a result, there are many different export options, with more than 10 types of national and international commercial interest. The Perennial Horticulture Development Program (PDHP) has categorized around 90 native varieties of almonds.


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Production figures and exports show an interesting trend. Production increased remarkably from 2001 to 2009 (See Figure 7 below) as did global per capita consumption. While almonds are consumed domestically, exports to Pakistan (then to Gulf States), India and Germany show great potential demand. China must now be considered an important future market, as must Turkey and the Gulf States.

Figure 7. EXPORT, DOMESTIC CONSUMPTION AND PRODUCTION OF ALMONDS (2001-09) IN MT

Source: UNSTAT Database, FAO Database What is surprising however is that export levels have been highly volatile (See Figure 8 below), though figures for 2010 to 2015 (which appear to be unavailable), and while export values have increased, differences between domestic, regional and global market destination are huge, showing comparative advantage from a price competitive point of view.

Figure 8. EXPORT (QUALITY AND US$ VALUE) OF ALMONDS (2001-09) THE ALMOND VALUE CHAIN The field work covered a large array of producers, traders, transporters and exporters, in the main urban and peri-urban markets. While Afghanistan itself remains a significant market for domestic consumption, there is a risk that with declining purchasing power prices will begin to fall. As a result,


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and with the Afghani having already depreciated from Afs 50 to Afs 70 to the US$ in the past 3 years, export markets become far more competitive. With only 3 to 4 % of product currently exported, there is considerable potential for increase. Within Afghanistan, the South Western and Northern provinces dominate production areas, with Kandahar and Samangan dominating production, followed by Uruzgan, Kunduz, Balkh, Saripul, Tahar, Zabul and Parwan. As of 2012, according to FAO, there were approximately 13,490 hectares with a yield of 4.5 tonnes per hectare, meaning a total production of approximately 62,000 tonnes. The Afghan Almond Industry Development Organization (AAIDO) has produced a national directory of 9,737 almond growers, 182 nursery operators, and 253 almond merchants. 3 AAIDO, as a membership based organization, focuses on marketing, research, legal aspects and administration.

The Afghan domestic market remains a traditional market. Evidence suggests that it continues to be more driven by price than demand. Such a reality means that it is difficult to stimulate domestic demand other than by lowering price, and with most consumers buying from local markets, affecting this end of the value chain would need to be market-wide. In observing the value chain for almonds, it is crucial to assess options for expanding production, reaching new markets, increasing consistency in product supply and quality, and guaranteeing competitiveness against other major producing countries such as the USA.

WHO ARE THE MARKET PLAYERS We observed that Afghan Almonds (including sweet almond (Amygdalus Communis) and bitter almond (Amygdalus Amara) flow through markets across multiple production and distribution channels. Moreover, as is the case with Pakistan, imported nuts are sorted and packaged and re-exported to India and the Gulf States. At the starting point however, all almonds are grown by farmers, who sell to merchants who in turn sell to exporters. Packaging is not done at the farmer end, but more generally downstream in the value chain, at the export and marketing end of the business. ❚ Growers / Farmers: Almonds are produced by farmers in 11 of the provinces of Afghanistan.

The farmer harvests the product, removes the hull and then either bags them or sells them in bulk to local merchants. If the farmer is skilled, he/she may separate almonds into the various component varieties, otherwise lack of product consistency undermines price advantage. Farmers face high working capital needs because almond trees require five years to mature and a further two years to bear fruit, meaning that only farmers with existing trees or large

3 Almond Industry Development Project Six Month Report, EC Perennial Horticultural Development Project (PHDP), European Union and Roots of Peace, plus personal communication-Zach Lea.


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land size can afford to make such investments. Financing, improving quality of existing variable tree stock and standardizing genetic stock would increase product quality and improve market position.

❚ Provincial and District Merchants: Merchants, many of whom were met in the field, purchase almonds in the shell from the grower and farmers. They reportedly sort the almonds into consistent quality and varieties, before bagging them, and in most cases they have already identified buyers up the value chain in place, depending on demand and quality. Smaller merchants may sell to the main urban centres (Mazar, Kandahar, Kabul etc.) but many of the larger traders export. Those growers and traders closer to the Pakistan border obviously export to Pakistan and India. Lack of product regulations (varieties and nomenclature) and lack of packing undermine export potential.

❚ Almond Exporters: Almond exporters such as Morvarid, who our consultants met in Herat,

have established a considerable processing and export base, to include packaging, certification and a strong international marketing footprint. Exporters consolidate almond lots from growers and merchants - increasingly cutting out merchants – and have a clear export market in mind. As a result, they are aware of export quality needs, and value is added by shelling, sorting and packaging. The biggest problems expressed by exporters were lack of consistent supply, variable quality, variable grades and variable size. As a result, exports are not consistent but rather opportunistic.

❚ Foreign Importers: Once exported, the foreign entity importer (e.g. in Pakistan) determines

volumes to go to wholesalers or retailers, manufacturing or processing. Given that common genetic materials, nomenclature, grades and standards are the basis for delivering better products to meet market demand, importers have to undertake their own further checks, meaning that they again take increased value from the farmer, who could have conducted them. Most importers have access to world market and major producers, and as a result, the best price incentive for Afghanistan so far is price, not necessarily quality or branding, which does not exist.

❚ Distributors and wholesalers: A distributor moves the product throughout the marketing

chain, matching supply with demand. They need to match a product with a particular market demand, which includes packaging and quality considerations, among other factors.

❚ Manufacturing/Processing: Manufacturing and processing capacities in Afghanistan are

slowly beginning to improve, with Morvarid and other investors slowly increasing national value added. While high-end factories such as Morvarid are changing the market, most processing in Afghanistan is still through use of manual labour, and processors typically have limited understanding of quality standards. Adding flavours, roasting, slicing, flour, paste or oil capacities all add considerable value to

the primary product. Lack of information on market demand affects marketing strategy and export penetration.

Photo 1 Peter J. Middlebrook meets Baryalay Artifi, the owner of Morvarid Fruit and Nut Processing Plant in Herat


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❚ Retailers and retailing activities: Retailer presents the almond or its by-products to the consumer, either domestically or internationally. The retailer’s position in the market determines where and how the nuts are sold. Retailers in Afghanistan include the local and larger markets, small community shops and larger shops in the major cities. They also include market stalls, small retail outlets, restaurants and bakeries. In future, products could target high end markets and even airlines and cinemas, for example. In a competitive global market, market information is critical to positioning exports with retailers, and that is lacking currently.

❚ End Consumers: Consumers are domestic and foreign. However, outside of Afghanistan,

most almonds are not branded as Afghan Almonds, with Pakistan (for example) re-exporting products to third country destinations. Consumers are the final participant in the marketing chain and the single most important one when it comes to choice and satisfaction. Consumers care about quality and price.

MARKET POTENTIAL The principal market for Afghan Almonds remains domestic, though that is changing, and targeted investment can support a far strong export orientation. Almonds are purchased from merchants in local and main city bazaars from the growers directly. The almonds are sold in both the in-shell and shelled form. Additionally, value added almond products are utilized in a variety of bakery and culinary ways though there are no figures on such volumes. We found it difficult to determine market prices and distribution of sales because prices are not set in stone, but are bartered. According to the Dalberg analysis, developed for the German Government: ❚ Historical growth in production of 14% a year (MAIL statistics 2009-2012), as a result of

expanded area under production and improved yield, both of which may vary widely by geography;

❚ Current processing capacity equals around 1,200 tonnes per year, which is only a very small percentage of current production (less than 5%) (Nut feasibility study, USAID);

❚ Current export share of production: 30% (96% to regional markets);

❚ Cost per processing plant is around USD 1.3 million for a capacity of 2,000 tons/year (Nuts feasibility study, USAID); and,

❚ Total investment required for 6 new plants (donor + private): USD 8 million. The total capacity of 13,200 tons/year in the target state would represent 11 times the current processing capacity, which would transform export potential.

MAIN REPORTED CONSTRAINTS Field assessment across the value chain highlights considerable market development constraints, many of which can be resolved with the right balance of public and private investment. Considerable money has already been spent by Government (MAIL, MRRD, AAIDO etc.) and the international community, and there is ongoing investment from BMZ and USAAD, among other actors. These constraints therefore need to be pared down into actions that the AKT can support, based on further details to be developed in the main report. However, main, micro, meso and macro constraints reported through the field survey are as follows.

Major Local Varieties There are an estimated 68 to 99 Almond genotypes found in Afghanistan, and some of the major varieties are listed below: ❚ Satar Bayee (Satar Bayi) ❚ Khairuddini (Khairuldini) ❚ Qahar Bayee (Gharhar Bayi) ❚ Qambari (Ghambari) ❚ Nakhshi (Sise) (Saizi?) ❚ Shokar Bayee (Shukar Bayi) ❚ Zareeri ❚ Abdul Wahedi ❚ Kap Mal ❚ Khaghazi ❚ Moravaja ❚ Sanghak ❚ Shakh Bozak ❚ Dasi The value of exports for a specific variety is unknown.


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Main Structural Constraints: ❚ Lack of product consistency; ❚ Variable product quality; ❚ Lack of trade finance export expansion; ❚ Lack of domestic processing capacity; ❚ Land-locked nature of the market implying ❚ Lack of wider international market knowledge including on pricing; and, ❚ Lack of country branding capacity. Micro Level Constraints ❚ Lack of product standardisation; ❚ Lack of processing capacities; and, ❚ Lack of packaging and quality control. Meso Level Constraints ❚ Low networking/ marketing capacity of key trade associations (ADFEDA, AAIDO); ❚ Non-existent product branding; ❚ Lack of coordination among farmer groups at district and provincial levels; ❚ There are no local farmer almond associations, undermining aggregation, extension and

knowledge and inputs sharing; and, ❚ Few fora for producers to coordinate water sharing Macro Level Constraints ❚ Lack of long-term financing products (both for tree crop production and packaging/processing

equipment); ❚ Water and land constraints, in particular lack of irrigation systems; ❚ Absence of system for quality standards/certification; ❚ Difficulty navigating export/investment licensing processes; and, ❚ High cost of air freight to export almonds (e.g., to Gulf States or India) Leading world almond production markets from which lessons can be gained include: ❚ USA (California alone has 83% of the world production); ❚ Spain; ❚ Tunisia; ❚ Morocco; ❚ Portugal; ❚ Turkey; ❚ Greece; ❚ Italy; and, ❚ Iran (particularly North-West of Iran, in the Azerbaijan (Tabriz) region).

Figure 9. US DOMINATES GLOBAL PRODUCTION


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As a result, given the market development capacity of these leading producers, it is critical to take a longer term investment view, focusing on lowering the costs of production, standardizing product quality and conformity, establishing market networks - on product diversification in particular. PRICING Getting market prices for almonds is difficult due to bartered prices, different qualities and multiple varieties, different supply and demand conditions and high seasonality. Moreover, medium-quality almond varieties include Qahar Bai, Khairodini and Abdul Wahidi with high-quality almond varieties including Satar Bai, Bela Bai and Qambari, and all differ in price markedly. Furthermore, depreciation of the Afghani undermines comparative export prices. Domestic retail prices in Kabul, depending on quality, ranges from un-shelled Afs 600 to Afs 700 per Kilo and shelled almonds fetch prices from Afs 700 to 1,200 per kilo, again quality and demand dependent. Prices on the market in Kandahar show a considerable difference from wholesale markets in India and the Gulf States, with a wholesale price being 150% to 350% higher than wholesale prices in Kandahar. Examples of 2014 export prices and transport costs are provided in Table 3 below, for different traders by destination. The exorbitant costs of reaching Central Asia should be noted.

Table 3. AFGHAN ALMOND PRICE BY TRADERS AND TRANSPORT COST IN 2014

Company Name Variety Export Price US$/Kg

Transport Cost New Delhi Per Kg

Transport Cost to Pakistan Per Kg

Transport Cost to Central Asia Per Kg

1 Angaza Ltd Processed

Processed Gourbandi Almond

7.6

2 Zmaray Rasoli Ltd Processed


8.0

3 Mujtaba Sajad Refa Processed Gourbandi Almond

8.5

4 Rahmat Kamal Ltd Processed


8.0

5 Aziz Basit Ramaky Ltd


7.6

6 Haji Sayeed Karim & brothers


8.0

7 Painda M. & Brothers


7.6

8 Aziz Hedayat Ltd Processed Gourbandi Almond

8.0

9 Khalid Shoaib Ltd Processed Gourbandi Almond

8.2

20-30.5 Cent

10.5-20.5 Cent

40.5-45 Cent

In the UAE, for example, loose shelled almonds (unprocessed) fetch prices from Afs 1,300 to Afs 1,500 and processed, flavoured and roasted almonds fetch prices of Afs 1,800 to Afs 2,000 per Kilo. Prices increase in winter.


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Figure 10. AFGHANISTAN ALMOND PROCESS VALUE CHAIN ANALYSIS – DOMESTIC AND EXPORT MARKET PRICES


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Table 4. ALMOND PRODUCT COMPLIANCE WITH AKT SELECTION CRITERIA

Product Justification # Compliance with Criteria Field Based Observations Trade and Economic Observations

1 Product export growth potential

❚ Very significant indeed, with shelled almonds receiving a high RCA.

❚ Increasing domestic processing capacity and production internally.

❚ Options to promote increased exports and value addition through internal processing and marketing are relatively strong.

❚ Even including import tariffs, CIF prices still show competitiveness.

❚ Afghanistan RCA for almonds (both in shell and shelled) is the highest across all products studied. Shelled almond is the product with the highest share (2%) in Afghan total exports when compared to all other identified products.

❚ Afghanistan’s global export share of almonds in shell is 0.45% and that of shelled almonds is 0.40% which is also among the highest in preselected products.

❚ While India still is the largest market to which shelled almonds are exported (61%), a fair share of exports go to EU countries as well (particularly Germany), indicating diversification of exports and familiarity with the large markets thereby underlining a potential for future increase in market shares

❚ US$18.2 million in export of shelled almonds in 2014 and though there has been volatility in volume, the last few years have clearly been showing an increase in exports.

❚ World almond production/exports continue to track growing demand from established and developing markets.

2 Product import substitution potential

❚ There is no important substitution for this product as a net exporter, though with world population set to double, domestic demand is expected to double.

❚ While Afghanistan’s exports in almonds both in shell and shelled have been 4Mn USD and 18 Mn USD respectively, imports are negligible hardly being a few thousand dollars; thereby import substitution is not an issue for this product.

3 Product volume which could impact trade balance

❚ Almond production is increasing considerably, and with land under Government ownership slowly being redistributed, potential production volume increases are considerable.

❚ Product quality is also slowly improving, and increasing domestic processing (shelling, roasting)

❚ 62,000 tonnes in 2102, though lower in 2014 (42,000) ❚ Until 2012 there has been a clear upward movement in terms of

production volumes. The last two years show a decline but if sufficient levels of investment go into the product, and value chains promoting exports are developed, there would a further impetus to produce more, reversing the decline

❚ Yields per hectare are less than half that of the US, 60 per cent that of Pakistan, though they are higher than Iran indicating regional competitiveness

4 Product potential for

cross border value chains among 3

❚ While there is limited potential for exporting to Tajikistan and Kyrgyzstan, Afghan almonds do reach both markets, though often as informal flows.

❚ Limited, but sharing experience can be useful if walnuts are to be chosen as the primary target product for AKT in Kyrgyzstan for example.


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Table 4. ALMOND PRODUCT COMPLIANCE WITH AKT SELECTION CRITERIA

Product Justification countries ❚ These markets may benefit indirectly from exports, though

they would not be primary markets. 5 Product employment

multiplier potential ❚ There are 220-240 days of employment added per year per

hectare under production, and this excludes backwards and forward linkages, particularly in relation to processes.

❚ Not inconsiderable, and given other linkages with industrial processing capacity, employment elasticity seems strong. Almond production employs mostly widows in processing, adding a potentially strong social benefit.

6 Appetite for public and private investment

❚ Considerable interest in this product, in Government, the international aid community and with the private sector. The potential for linkages, networks and sharing experience and information is considerable, and given high rates of return on investment, this is a great road show product with considerable potential.

❚ Global almond production increased by 69% from 2003 to 2013 and exports increased by more than 400% during this period indicating an ever growing global market demand. With global market demand set to double in the next decade or so, there is considerable product and market experience that can support further expansion.


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Figure 11. AFGHANISTAN’S MAJOR EXPORT DESTINATIONS FOR ALL PRODUCTS BY VALUE (US$) IN 2013


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Section F. PRODUCTS EXCLUDED AND JUSTIFICATION While we propose to focus on almonds as a significant export product, we have considered all other major pre-selected products based on feasibility. The worsening macro-economic outlook, currency devaluation, declining aid flows but new economic corridors planned (the China Pakistan Economic Corridor (CPEC) and Chabahar Garland Highway bridging through Zerang and Herat) mean that only non-perishable products have the potential to reach international markets beyond India and Pakistan. This is a national economic development objective, as we discussed with the Economic Advisor to the President, Omar Zakhilway and the Director General for Economic Cooperation in the Ministry of Foreign Affairs, Wahid Waissi. Quantifying trade flows to Pakistan is made complex as a result of the open and porous borders across the Pashtun south, and in many ways such flows are not considered formal exports at all, given the contested issues around the Durand Line. As a result, a great deal of produce moves between Kandahar, Helmand, Paktika and Khost for example, informally. Moreover, with Pakistan, Afghanistan, Iran, Turkey and even Egypt applying for membership of the Shanghai Cooperation Organization (SCO), the reality is that increased levels of production at competitive prices make almonds a product of choice, with considerable options for forward and backwards linkages into these markets.

Figure 12. COMPOSITION OF FRUIT, VEGETABLE AND NUT EXPORTS IN 2013 (US$374 MILLION)

This short section, supported by the summary table at the front of the report, provide justification for not selecting the following products. There are a number of products that already have substantial penetration into foreign markets, buoyed by the massive inflows of aid in recent years which has increased national purchasing power considerably. Moreover, while products such as pomegranates and apricots show great potential, there are strong forward and backward linkages for almonds – as a non-perishable product – with considerable potential for small scale industrial processing and packaging in-country, adding considerable value to GDP. The following product exclusion justification is provided.


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FRUITS Afghanistan produces some of the best fruit in the world, and with Pakistan and India as export markets, it continues to show great potential. However, lack of value chain infrastructure, lack of cold storage systems and lack of product standardization and certification make expansion into new markets challenging. A number of key informants note that the reason trade is strong with these countries is also because of the capacity of these countries to purchase, transport, process and export products to third markets. It is this external capacity that must be leveraged where possible until such processing capacities are installed in Afghanistan. New export markets must be a priority.

GRAPES (RAISINS) Afghanistan exported some US$65.3 million of grapes in 2013, being 9% of total exports, and 17% of total fruit, nuts and vegetables exported. As a result, grapes already have an established market, particularly for raisins. Given that cold storage systems make the grape stems turn off colour, processing grapes as a dried and non-perishable product is a considerable business. As of November, based on market prices collected from Herat, Jalalabad, Kabul and Mazar, prices for different varieties of red and green table grapes ranged from Afs 60 to Afs 90 per kilogram. Afghanistan’s global share in export of fresh grapes is 0.59% while that of raisins is 3.8%, indicating that Afghanistan has a competitive edge when it comes to exporting dried grapes (raisins). Data indicate that Afghanistan is the sixth largest exporter of raisins, although it also has to be noted that the top two exporters Turkey and United States do take up a major chunk of the global market (54%). For raisins, while the US is the largest global exporter, for Afghanistan a strong regional competitor is Turkey which exports 30.26% of global exports of raisins and 3% of fresh grapes. Iran is also a lesser but still strong regional competitor in terms of raisins. For imports of fresh grapes, the US, EU and China are the key markets; for raisins it is primarily EU countries followed by Japan and Canada importing smaller shares. As an established industry, and given the need to diversify export markets to non-traditional trading partners, we determine that there is less upside from focusing on this crop, which has already benefitted from hundreds of million of dollars in external support.

APRICOTS Afghanistan exported some US$12.4 million in dried apricots in 2013, and US$3 million in fresh apricots, highlighting the limitations of cold storage systems and the importance of focusing on non-perishable products until such infrastructure is in place. While fixed capital formation of private sector assets is increasing, with a reported US$10 to 12 billion in capital leaving Afghanistan since early 2014, domestic liquidity for investment remains at an all time low. There were no fresh apricots available on the market during the survey period, through dried apricots fetched prices from Afs 200 to Afs 300 per kilo, in wholesale and retail markets respectively. Among the AKT countries Afghanistan and Kyrgyzstan are the more significant exporters of fresh apricots. Interestingly, Afghanistan is the larger producer of apricots but exports are almost on a par with Kyrgyzstan. Tajikistan also seems to be producing more apricots in terms of volume, though exports much lower. Kyrgyzstan seems to have a competitive advantage when it comes to exports. The global share of both Afghan and Kyrgyzstan exports are 1.3% and 1.09% respectively. Afghanistan’s key export market is Pakistan while that for Kyrgyzstan is Kazakhstan. There is clearly no export diversification in terms of markets. The key global markets for apricots are EU countries (Germany, Italy and France) and Russia. The key exporters are Spain, France and Italy, while the key regional exporters are Uzbekistan and Turkey, making it difficult for Afghanistan to diversify into new markets without considerable investment and support. MELON Total official melon exports in 2013 totalled around US$873,000, though informal export flows are likely to be higher still.


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Data are available only for Afghanistan in terms of production. While trade data are available for all three AKT countries, global share of Kyrgyzstan and Tajikistan is extremely low and almost insignificant. Afghanistan has 0.05% of the global share of melon exports and this is also extremely low when compared with the key global exporters. Pakistan is the key market for Afghan export of melons. Melons traded to Pakistan across the border likely only occurs as a result of ease of access, indicating a lack of any supply chain structures such as cold storage and transportation over long distances. The key importers of melons are the United States and EU countries. Afghanistan does have an entry point already into the UK which is the 5th largest importer of melons in the world. Afghanistan currently (out of its total exports), exports an extremely small share of 0.23% into UK. While this is almost insignificant it is important because there might be existing channels of trade that could be taken advantage of. It would be useful for Afghanistan to diversify its export markets and increase its share of exports to UK. However, more information needs to be collected from exporters of melons in Afghanistan as to why the share of exports to the UK is minimal, and why the UK, given its distance from Afghanistan. Is it because of few entry barriers in the UK, such as standards or other requirements? Most significant global exporters of melons are from the Latin American and EU region, with no significant exporter in the Central Asian or MENA region and it will be difficult for Afghanistan to scale exports considerably under current conditions. LEMON/ CITRUS Lemon is an important but rarely cultivated crop in Afghanistan, and currently there are no reported exports. It takes three years to Tajikistan is the only country for which lemon production and trade data is available indicating that among the AKT countries this is the only significant producer and exporter. But even for Tajikistan lemon production and exports have fallen with current export shares only constituting only 0.002% of global trade. Further there is very limited export diversification with almost all exports from Tajikistan going to Kazakhstan. None of the AKT countries have a positive RCA in lemons indicating there might not be much potential in developing value chains in this product. Turkey is the only regional country that is a strong exporter of lemons. Afghanistan only officially exported some US$390,000 in citrus fruits in 2013, though informal border flows are impossible to value. Lemons, which key informants reported as being very important during Ramadan when people are fasting, was available on most markets surveys priced between Afs 55 to Afs 75/kg, for local and major urban centres respectively. The National Horticulture and Livestock Project (NHLP), a Ministry of Agriculture, Irrigation and Livestock (MAIL) initiative supported by the Afghanistan Reconstruction Trust Fund (ARTF) has assisted many farmers in establishing lemon plantations, albeit with subsidized inputs. Farmers were paying some 20% to 30% of the percent of the actual sapling cost, and were given free fertilizer, micronutrients, pesticides and ‘intercrops’ like peas and zucchini, to grow between the trees while they mature. A new certified South African root stock which is hardy and highly adaptable to Afghan growing conditions was introduced. Currently, however, new production supports local demand, but the potential upside for exports remains limited. STRAWBERRY There is a very small, only a niche market in Afghanistan, for strawberries, though they were available in Kabul and Herat markets, at prices ranging from Afs 100 to Afs 200 per punnet. Quality was not good and they were already perishing in many cases.


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Production volumes and trade values are only available for Kyrgyzstan, indicating that among the AKT countries only Kyrgyzstan has any significant production and trade in strawberries. In terms of production, Kyrgyzstan volumes are increasing in absolute numbers though the share in global production has fallen indicating that other countries have overtaken the country. Current share of Kyrgyzstan production in total global production is only 0.028% (2,200 tonnes). Share in global exports is also very limited at 0.012% in 2014. The only market for Kyrgyzstan strawberry exports is Kazakhstan. EU and US are the key markets for importing strawberries worldwide. The main global exporters of strawberries are Spain, Mexico and US while significant exporters in the MENA region are Egypt and Morocco. None of the AKT countries has a competitive advantage globally in strawberry production as indicated by the RCA analysis. NUTS WALNUT In 2013, Afghanistan and Kyrgyzstan produced 11,122 tons and 5,859 tons of walnuts respectively. Production in both Afghanistan and Kyrgyzstan has been on a general increase, although in 2012/13 it fell in Afghanistan. Kyrgyzstan and Tajikistan, though having lower production volumes than that of Afghanistan, seem to be having higher shares in global exports than Afghanistan. Kyrgyzstan’s share of global exports of in shell walnuts was 0.05%, and for shelled walnuts was 0.6% in 2013. Looking at the key export markets for Afghanistan it can be seen that walnuts (both shelled and in shell) are mainly exported to India. For walnuts in shell Pakistan is also a significant importer of Afghan exports. Interestingly for Kyrgyzstan and Tajikistan, China is a major importer of in shell walnuts. For shelled walnuts, China is the major importer from Kyrgyzstan, and Kazakhstan is the major importer for Tajikistan. Turkey is a significant regional importer of walnuts while there are no other significant exporters regionally. PISTACHIO Pistachio production in Afghanistan for the year 2013 was 2,100 tonnes, and for Kyrgyzstan 9,48 tonnes. Market prices ranged from Afs 700 to Afs 1,400 per kilo depending on size and quality, and there is considerable domestic consumption as a table nut across the country. Compared with Afghan value of exports, Kyrgyzstan and Tajikistan are much smaller. While the key export market for Afghanistan is India, a smaller share of exports also go to a few European countries and in the region towards Lebanon and Turkey. An analysis of key importers and exporters reveals two things. Firstly, Afghanistan and Tajikistan while primarily exporting to their neighbouring countries such as India and Kazakhstan, also export a small share to the European Union which is a key importer. Given an already established relationship with key importing markets, there is a potential for further value chain development without significant obstacles. Secondly, it can also be seen that Afghanistan, while falling to the lower end of the list, does stand with key exporters globally. Regionally, though AKT countries would face strong competition from Iran which is the second largest exporter globally, and from Turkey which is also a strong exporter of pistachios. The key import markets are Hong Kong, Vietnam and the EU. As a result, and with other donors such as USAID focused on this sector, it could be that synergies between almond and pistachio exports can lead to other multipliers. VEGETABLES / OTHERS ONION Afghanistan exported some US$17.8 million in onions and shallots in 2013, which is a considerable export for such an unsophisticated market. Onion prices in Mazar and Kandahar were similar, at Afs 20 to Afs 30 per kilo.


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For onions, the limitation in availability of production data focuses the analysis on trade. Analysing export values of onions it can be seen that Tajikistan is the larger exporter though values have been volatile in terms of exports. Afghanistan exports have increased over the last few years and in 2013 and 2014 export values from Tajikistan and Afghanistan have been similar. In terms of global shares, Tajikistan’s share in global exports has fallen from the peak in 2010 while the overall trend has been upward for Kyrgyzstan and Afghanistan in terms of global share. The shares of all three countries though are less than 1%. For Afghanistan, the most important export market is Pakistan with 99% of the exports from the country going to Pakistan, because of proximity and traders based on both sides of the border. For Kyrgyzstan and Tajikistan – Kazakhstan and Russia are the largest markets. The key importers of onions globally are Netherlands, Mexico, China and India, while the key global exporters are United States, United Kingdom and Germany. Exporting to EU markets is unlikely over the near term. ALFALFA There is no trade and production data available for AKT countries, and it is unlikely that alfalfa seed can find an export market, though it is used for livestock fodder locally. POTATOES Afghanistan officially exported only some US$3.8 million of potatoes in 2013, and in November 2015, local wholesale prices ranged between Afs 20 to Afs 30 per kilogram, for varying varieties and qualities. During fieldwork in Tajikistan, traders stated that they imported potatoes from Afghanistan and Pakistan during winter time. Kyrgyzstan and Tajikistan are significantly larger producers of potatoes in terms of volume than Afghanistan. Potato is being produced in the largest volumes among the pre-selected products by both Kyrgyzstan and Tajikistan. However, in spite of being the lower producer among the AKT countries, Afghanistan exports almost twice as much as Kyrgyzstan in terms of value. Tajikistan has extremely low values of exports globally. Afghanistan and Kyrgyzstan exports constitute 0.4% and 0.1% of global exports respectively. Identifying the key current markets for Afghan and Kyrgyzstan potatoes, it can be seen that Kazakhstan is the single most important market currently. There is limited diversification in export markets for potatoes and there is less focus on the EU markets which are huge consumers of the product. The key exporters and importers of potatoes are mostly European economies. It might be difficult for AKT economies to enter European markets given that producers from the region would give strong competition. Russia is one of the largest importers of potatoes, and there might be an opportunity to divert exports into Russia given regional proximity. OTHER COMMODITIES CONSIDERED NOT ON THE PRE-SELECTED LIST SAFFRON Saffron is an emerging market (new entrant) with lots of interest, particularly around Herat, and was reportedly introduced by DACAAR in 1998. Saffron is dried stigmas of Crocus Sativus and it does not compete for irrigation though it is a labour intensive crop. The entire crops is normally harvested over 3-4 weeks a year in October, Saffron is well suited to the semi-desert and rugged ecology of Afghanistan, particularly in the western provinces, the northeast (Badakhshan), Central (Laghman, Panjshir, and Wardak), and some Southern (Hellmand, Kandahar, Uruzgan, and Zabul) provinces. The success of Herat province


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has much to offer as far as learning for other ecologically-comparable Provinces, though in particular in securing the incomes of farmers in the first three years or so, while the plants are maturing. The consultant team met saffron farmers and traders in Herat, including input suppliers, processors, financiers and traders and wholesalers. It is exported to India, Iran, Pakistan and the UAE. While there are considerable options for improving micro, meso and macro linkages across the value chain, lack of commercial credit and consumption smoothing impedes many new market entrants. Producing a kilogram of dried saffron requires 150,000 to 170,000 flowers and around 400 hours of labour. According to the farmers in Herat, a Jerib of land yields greater profit than opium, though of course it can never compete on such a scale. On a Jerib of land, 2-3 kilograms of Saffron can be produced, sold locally for US$2,500 to US$3,500 per kilo, and fetching more than US$10,000 per kilo at the final consumer. While saffron is a key spice traded across the Silk Road, for medicinal and spice purposes, and though it has considerable potential, it remains a highly specialized niche export crop, and expansion is thankfully happening based on growing internal competencies, though financing remains a major constraint. Domestic demand also remains strong, for tea. . Section G. MARKETING AND FINANCIAL FEASIBILITY Marketing constraints, alongside lack of access and the high costs of finance affects all products, particularly those with long gestation periods and demanding export finance to be put in place. The AISA-funded Feasibility Study of the Almond Industry, based on the Mazar processing plant, provides many insights for this important crop. However, with production levels having increased fourfold since 2003, it is clear that targeting interventions at the micro, meso or macro level can have significant rates of returns on exports, employment and foreign currency, with backwards and forward linkages and spill over effects into other nut and dried fruit production sectors. 4

Table 5. SWOT ANALYSIS FOR ALMOND MARKETING AND FINANCIAL VIABILITY

Strengths Opportunities ❚ Competitive prices on world markets ❚ Strong export potential ❚ Production increasing exponentially ❚ Strong immediate markets in India and

Pakistan, as well as the Gulf States ❚ Suitable climate ❚ Increasing annual yields ❚ Considerable potential for backwards and

forwards employment linkages ❚ Processing and value added small scale industry

options including packaging and certification ❚ Non-perishable, does not require cold storage ❚ Strong private sector interest ❚ Strong government support

❚ Structured private sector financing support ❚ Grading and Packaging ❚ Certification and quality control ❚ Labelling ❚ Gender focus on high-end work force ❚ Low/high value processing into diversified

sub-products ❚ Considerable new end markets ❚ Training ❚ Producer cooperatives and associations ❚ Many varieties ❚ Immediate Gulf State markets as well as Hong

Kong, Turkey and China ❚ Almond milk and other products ❚ WTO Accession

Weaknesses Threats ❚ Fragmented value chain ❚ Inconsistent quality and supply ❚ Relatively high input costs ❚ Lack of sorting, grading and packaging ❚ Lack of value added processes such as roasting

and flavouring ❚ No labelling ❚ Lack of direct linkages with export markets ❚ Low level technical marketing skills

❚ Absence of low cost financing ❚ Product must be price- and quality-

competitive, for example with Tajikistan and Iran

❚ High import standards into EU and US ❚ Disease and lack of herbicide, pesticide and

fungicide inputs ❚ Emerging markets in this space

4 See http://www.aisa.org.af/Content/Media/Documents/Almonds-Feasibilitystudyforprocessingplan7112014142331812553325325.pdf


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❚ Lack of export market information and maps The economic rates of return for a given project must be worked out, but with a standard discount rate of 12% and below applied, NPV likely to be positive. There are also options to link this to the RECCA VI Investment Roadshows, and to consider public private partnerships and international link ups. Section H. TECHNICAL FEASIBILITY OF AN INTERVENTION There is already considerable support for almonds beginning to emerge, which reflects its potential and spill over contribution to other nut and dried fruit sub-sectors. Given the trade imbalance, and the need to close the trade gap, the export potential is strong. Despite growing producers such as the USA, drought in California may eventually reduce production there, and global demand for almond has never been greater. With a further 3 billion people to be born over the next 20 years, existing and new markets can be penetrated. Existing investments in this product, include, but are not limited to; ❚ MAIL, MRRD, AISA, AAIDO etc.; ❚ The Export Promotion Agency for Afghanistan; ❚ Champ/USAID, Kabul Afghanistan; ❚ Root of Peace, Afghanistan; ❚ Afghanistan Almond Association; ❚ Ministry of Agriculture and Irrigation; and, ❚ Afghanistan almond industry development organization. There are a number of intervention options, and these are listed below, based on the field findings. They will be reviewed and recast in the main report, as will proof of cost effectiveness given rates of return on investment. It is critical to assess whether interventions should focus at the micro, meso or macro level, and this will also depend on the levels of financial and institutional support that AKT is able to mobilize. A final project design will assess options in this regard, however the following entry points make most sense, based on the fieldwork alone. ❚ Support the establishment of processing and packaging facilities to add immediate value to

upstream producers, while also agreeing on the most logical geographical locations (linked to expansion on national irrigation) for such facilities;

❚ Improve farmer, merchant and exporters access to market information; ❚ Create and support exporter associations to develop networks and marketing capabilities; ❚ Foster export and investment promotion; ❚ Assess options for reducing freight costs; ❚ Establish national Almond Certification (MAIL, MOCI and ANSA); ❚ Work with Ministry of Foreign Affairs economic attaches to target primary export

destinations; ❚ Consider innovative long-term financing models given start-up time needed; ❚ Customs and transit support, local financial services, dialogue and decision-making; and, ❚ Strengthen coordination linkages with BMZ (RIDF, RCDF and SLS), USAID, EU and other

programs. Section I. RESOURCE & ENVIRONMENTAL FEASIBILITY Almond production is water-intensive, and unless managed well, it can have a negative impact on water tables, affecting the local ecology and even drinking water supply. Given the links with honey bees to pollinate, the fact is that building-in strong environmental conservation into large areas under the crop is critical to long term sustainability. A focus on water use efficiency, improved crop and land management techniques and farmers know-how will go a long way to addressing these concerns.


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Section J. SOCIAL AND INSTITUTIONAL FEASIBILITY Strong employment multipliers and impact on gender equity in the work place are noteworthy, as are the benefits of elevated farmer incomes to poverty reduction. Farmers and traders interviewed clearly see almond both as a product as an important livelihood, in a country with growing joblessness. There are also good gender linkages, in particular, and as highlighted in the excellent analysis undertaken by Dalberg, almonds are second only to dairy for the cost of creating a single job. With more Government land being leased to the private sector, options for job creation, addressing poverty directly, are considerable.

Figure 13. ALMONDS JOBS CREATION IMPACT PER USD/JOB

Analysis by the World Bank estimates jobs created in tree crop horticulture, including forward and backward linkages. As can be seen from Table 6 below, if area under production is to continue to expand, then the total full time employment could close the gap with fruit trees and vegetables in a decade or so. If processing capacities were to be significantly expanded, the direct, indirect, induced and spill over impact on jobs would support both national and local economies.

Table 6. ESTIMATE OF JOBS IN TREE CROP HORTICULTURE SECTOR

Crop Area (Ha.)

man days/Ha

FTE jobs On-farm

Fwd Lnkge

Bkwd Lnkge

Total Employment Linkage Effects

Total FTE Estimate

Nuts 15,796 220-240 17,376- 18,955

0.2 0.1 6,358 23,733- 25,313

Fruit Trees 53,871 260-280 70,032- 75,419

0.3 0.1 32,727 102,759- 108,146

Grapes 61,558 240-260 73,870- 80, 025

0.3 0.15 34,626 108,496- 114,652

Melons 24,717 100-120 12,359- 14,830

0.15 0.05 2,719 15,077- 17,549

Watermelon 22,592 100-120 11,296- 13,555

0.15 0.05 2,485 13,781- 16,040

Vegetables 53,718 240-260 64,462- 69,833

0.1 0.1 13,430 77,891- 83,263


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Section K. VALUE CHAIN GAPS & BANKABLE ENTRY POINTS The main report will detail the major value chain gaps to be addressed, and bankable entry points to be indentified, though we are aware that these findings will need to be socialized. The major gaps have been identified at micro, meso and macro levels, though it is important to indentify a sub-market of potential, and perhaps to establish a very different kind of investment framework leveraging both public and private sectors, including trade financing and technological transfers at the micro and meso levels. Section L. POTENTIAL IMPACT Almonds have emerged a crop of considerable potential, and as show in Figure 14 below, the annual income from harvesting shell almonds and soft shell almonds is better than pomegranates, and only beaten by grapes. The impact of course depends on the scale or project proposed, and that will be detailed in due course. 5

Figure 14. PROJECTED NET INCOME BY CROP (US$ PER HECTARE 2010) The investment would also have a potential positive impact on Afghanistan’s immediate physical integration partners, as outlined below, given upstream and downstream linkages.

Table 7. IMMEDIATE PHYSICAL INTEGRATION PARTNERS INCLUDE

Immediate Trade Potential Countries Afghanistan Tajikistan Iran Turkmenistan Kazakhstan Uzbekistan Kyrgyzstan India Pakistan China

5 Note: (1) Projected income for ‘Tarash Mazari’ variety of almonds (shelled); (2) Projected income ‘Satarbai’ variety of almonds (shelled) (2) Projected income for grapes harvested in trellised vineyards. Source: Crop Income Projection Afghanistan, Roots of Peace, 2010; “Can Afghan Farmers Move Beyond Opium?”, Time Magazine, 2010


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Annex 1: Key Informants

AKT Consortium Feasibility Study: Agro-value chains

Date Name Position Tajikistan workshop

October 15 Ahmad Shareer Shahriar

Deputy Minister of Programmes, MRRD, Kabul, Afghanistan

“ Haroon Rasheed Adviser to Deputy Shahriar, Afghanistan “ Imanaliev Daniyar

Sharshenbekovich Deputy Minister of Economy, Kyrgyzstan

“ Matluba Uljabaeva Chairperson, National Association of Small and Medium Businesses of Tajikistan (NASMBT)

“ Jocelyn Mason Senior Deputy Country Director, Programmes, Afghanistan

“ Erkina Urazbaeva Programme Associate, UNDP Kyrgyzstan “ Mrs Gulcin Salingan Deputy Director, UNDP IICPSD, Istanbul “ Joern Riekin Team Leader, Aid for Trade, Istanbul Regional Hub,

Regional Bureau for Europe and CIS, Istanbul

Afghanistan Field Visit November 10 Ahmad Shareer

Shahriar Deputy Minister of Programmes, MRRD, Kabul, Afghanistan

Haroon Rasheed Adviser to Deputy Shahriar, Afghanistan Hekmat Karzai Deputy Minister for Foreign Affairs November 16 Assadullah Zameer H.E. Minister of Agriculture Zia Massood Special Advisor to the President on Good Governance Erhsad Ahmadi Previous Lead Istanbul Heart of Asia Process Saad Mohseni Entrepreneur Omar Kahilwal Chief Economic Advisor to the President Baryaly Artifi Marvarind Fruit and Nuts Wahid Waissi DG for Economic Affairs, MoFA Massoud Amer UNDP Barekzai Dealawr Office of the President Hamid Karzai Former President of Afghanistan Obaid Ibrahim Business Owner and Trader November 18 Habib Wayand Former MRRD Adviser Suleman Kakar Village Elder and Former Deputy Minister Nadeem Ul Haq Former Minister of Planning in Pakistan Albana Vuji Trade Competitiveness Export Solomon Moore Governance and Exports Vegetable Traders and Transports – Pakistan and Iran Haji Gallbadin Nut Trader Mohib Allah Nut Trader Haji Dawod Nut Trader M. Naima Nut Trader Hisker Khan Farmer / Producer Haji Hamed Farmer / Producer Nower Sayed Nut Trader Sayed Mohammed Farmer / Producer Howja Dawod Farmer / Producer Haji Gallah Vegetable grower Kabul


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Ahmed Shah Vegetable grower Kabul Haji Mher Allah Vegetable grower Kabul Joma Khna Mazar Traders Ajmal Agh Herat Saffron Mostafa Vegetable grower Kabul Barkzi Fruit and Nut Trader Haji Hosahalla Herat Industrial Processing Ismail Khan Kandahar Pomegranate Farmer Merwis Trader Abdulla Wahid Nut Trader Gallam Mohammed Industrial Processing Ismari Kandahar Exporter / Trader Mafois. Fruit and Nut Trader Fresh Fruit Merchants Haji Sher Agh Kabul Exporter Shahai Fruit and Nut Trader Haji Hamyoown Parwan Trader Haji Marza Farmer / Producer Gullah Agh Kandahar Exporter / Trader Haji Fraid Parwan Farmer


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Annex 2. List of Documents Consulted Ackerman, J. M. (2005). ‘Social Accountability in the Public Sector: A Conceptual Discussion’. Social Development Papers 82. Washington, DC: World Bank. Afghan Export Promotion Agency (2014) Afghan Almond Cost Competitive Analysis 2014 AISA (2007) Feasibility Study for Almond Subsector Plan: Operationalising processing plant in Mazar ARTF (2010) Draft ARTF Incentive Program Sy1390 (2011/12), Administrator’s Technical Review: Structural Benchmarks Bates, R. (1999). ‘Ethnicity, Capital Formation and Conflict’. Working Paper 12. Washington, DC: World Bank. Beath, A. B., Christia, F. C. And Enikolopov, R. E. (2013) Randomized Impact Evaluation Of Afghanistan’s National Solidarity Program. Independent Evaluation. MIT. Boots of Peace (2006) GMP and HACCP for Tree Nuts and Dried Fruit Processing Plants in Afghanistan Davon, E.D. Et Al (2013) NSP Subproject Sustainability: Altai Consulting. De Wulf L. and J. B. Sokol (eds) (2004). Customs Modernization Initiatives: Case Studies. Washington, DC: World Bank. DEG, Presentation on DEG-Experience of SME Credit Guarantee Facility (CGF) in Afghanistan (June 2013); FAO (2012) http://faostat.fao.org/site/339/default.aspx Geopolciity Inc. (2012) Iraq Value Chain Analysis and Method, FAO Geopolicity Inc. (2014) Options for Transition and Sustainability of the National Solidarity Program, for the World Bank GoIRA (2013) Central statistics organization year book, Kabul Afghanistan GoIRA/Geopolicity (2010) Afghanistan – Regional Resource Corridor Initiative (AR-RCI) HMG (2009) Scenario Planning, Guidance Note, Foresight Horizon Scanning Centre, Government Office for Science MAIL (2104) Statistical Department, Ministry of Agriculture and Irrigation. Malakooti, A. M. Et Al (2012) The Sustainability Of CDCs: Altai Consulting. Marenin, O. (2005). ‘Policing Nigeria: Control and Autonomy in the Exercise of Coercion’. African Studies Review, 28 (1): 73–93 MoFA, RECCA VI Conference Main Report


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NaWi, Gender Survey (2012); UNDP (2009) Police Perception Survey 2009 - The Afghan Perspective, UNDP Afghanistan Country Office UNDP (2015) AKT Project Document USAID (2008) Case Study of the Poultry and Grape/Raisin Subsectors In Afghanistan USAID (2012) Market Assessment of Almonds, Raisins and Figs, Champ/USAID, Kabul Afghanistan USDA (2012), National Agricultural Statistics Service, California Almond Price Report USDA (2013) Almonds, Tree Nuts: World Markets & Trade, Foreign Ag Service (FAS), USDA USDA (2013) Tree Nuts: World Market and Trade World Bank (2005). ‘Building Effective States. Forging Engaged Societies’. Report of the World Bank Task Force on Capacity Building in Africa. Washington, DC: World Bank. World Bank (2007) The Challenge of Combating Corruption in Customs Administrations in The Many Faces of Corruption - Tracking Vulnerabilities at the Sector Level, Carlos Ferreira, Michael Engelschalk and William Mayville World Bank (2009) Fighting Corruption in Afghanistan – Summaries of Vulnerabilities to Corruption Assessment, July 2009 World Bank (2009) Interim Strategy Note for Islamic Republic of Afghanistan, Report No: 47939-AF, World Bank (2009) Rapid Logistics Review: Transit of Afghan Good through Pakistan-Afghanistan Border Crossing and the Implication of Transit Trade on the Economies World Bank (2010) Afghanistan Economic Update, October 2010 World Bank (2012) “Afghanistan in Transition: Looking beyond 2014”, World Bank World Bank (2014) Agricultural Policy Note World Bank gender mainstreaming reports (2011-2013);


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Annex 3 Almond Exporting Countries and Share of World Market (2013) Source: Atlas for Economic Complexity (2013)


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Annex 4 Almond Importing Countries (2013) Source: Atlas for Economic Complexity (2013)


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