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Most of SMFPIs obtained raw material from market. In certain season it was supplied from other district.
Most industries explained quality requirement
Price differentiation because of quality of raw material
0
10
20
30
40
50N
umbe
r of
SM
FPIs
Market Ow ned Contract Farmers Middlemen
Sources of raw material
0
5
10
15
20
25
30
35
40
45
Num
ber
of S
MFP
Is
Price protection Price
dif f erentiation
Quality
explanation
Communication
with f armer
Issues related to raw material procurement
Quantity of raw material was the important factor
The middlemen have strong role in raw material availability
0
0.5
1
1.5
2
2.5
3
3.5
4Le
vel o
f pe
rcep
tion
Quantity Quality Continuity Competition Transport Storage
Perception of raw material factors
3.05
3.1
3.15
3.2
3.25
3.3
3.35
3.4
3.45
3.5Le
vel o
f pe
rcep
tion
Buying process Price decision Materialavailability
Involment of middlemen n=63
Most of SMFPIs have 11% to 20% total defective products mainly due to raw material quality, use of old machinery and equipment and lack of operators skills.
Raw material was the most important factor among processing factors
0
5
10
15
20
25
30
35Nu
mbe
r of S
MFP
Is
0-10% 11-20% 21-30% 31-40%
Percentage of defective products
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4
4.1
Per
cept
ion
leve
l
Raw material Market Transportation
Processing factors
Results..Results..
Procurement of raw material
0
10
20
30
40
50
60
70
80
90
Perc
enta
ge
Market Ow n Contracting Farmers Middlemen
Raw material procured from
BFPIs
SMFPIs
• BFPIs use a contract system to reduce risk because of large raw material requirement.
Raw material supplies practicesRaw material supplies practices
0
10
20
30
40
50
60
70
80
Perc
entag
e
Price Protection PriceDifferentiation
Quality Communicationw ith farmers
Raw material activitiesBFPIs
SMFPIs
BFPIs communicate to farmer and midlemem for price, quality and delivery time
Processing factors..Processing factors..4.22
4.05
3.78
3.62
4
3.59
3.2
3.33.43.5
3.63.73.83.9
44.14.24.3
Perc
eptio
n le
vel
Raw material Market Transportation
Factors
BFPIs
SMFPIs
• Raw material remains the foremost factor in determining processing efficiency
• Transportation is vital to facilitate and support procurement of raw material for processing and bring finished product to the market.
Control activitiesControl activities
0
10
20
30
40
50
60
70
80
90
100
Perc
ent
age
Hy giene Nutritional
Quality
Contamination
lev el
Temperatur
control
Chemical
composition
Packaging
Quality control activity
BFPIs
SMFPIs
• Large production quantity and markkets makes QC an crucial activity for BFPIs