APIP Agricultural Policy Implementation Project

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• inexperience with cost calculation methods Other factors that influence production decisions among Tunisian growers are their experience inprevious years, their willingness to experiment with new flowers, and their knowledge of what the European market will purchase (often this information is provided by European partners or buyers). Quality isof upmost importance, because there isno market "niche" for low-cost, low-quality flowers. How yield, price and cost factors affect the profitability of operations producing quality flowers is illustrated by the enterprise budgets. The results of the analysis shown in Exhibit 8 reveal that cut flower production for export can be potentially very profitable, assuming that high yields of quality flowers are obtained, losses in transit are minimized and flowers arrive on the market ina timely manner. Initial investment costs for cut flower export production are about $201,100 DT, or about 67,000 DT per hectare not including land for a model threehectare Tunisian farm. Under the medium yield assumption, net revenues per hectare for roses are 26,602.9 DT, while gladiola show 7,805.3 DT, and carnations actually show a loss of 667.1 per hectare. Under the high yield scenario, the gross margin per hectare is highest for roses at 52,852.9 DT, followed by 17,555.3 DT per hectare for gladiola and 12,232.9 for carnations. A sensitivity analysis was conducted to illustrate how sensitive net revenues are to changes inprice and yield. Overall, the analysis shows that the effect of price changes on net revenue shows with a 20 percent decrease in price and a 20 increase in price, and indicates that: roses and gladiola are profitable cut flower enterprises carnations are less profitable except at higher price levels growers have to be concerned with quality since net revenues become negative at a 20 percent discount for carnations and gladiola under all scenarios. Ifflower quality does not meet accepted standards, discounts can be substantial, and make all the difference between profitability and loss. The issue of quality was emphasized by all wholesalers in the Paris-Rungis market. Cash-flow analyses were done for all three flowers under low-medium-high yield scenarios and average price assumptions. Estimates of capital investment costs and operating expenditures are estimated based on the figures presented in the enterprise budgets. Cash inflows are the projected revenues (using constant prices) over a 15-year period assuming that 80 percent of production isactually sold. Cash outflows include the initial investment of 201,100 DT, plus replacement costs in later years, as well as operating expeditures. Even under low yield scenarios, positive cash flows are registered for roses and gladiola but not for carnations which show a negative internal rate of return of 23.8 percent. Positive rate of return are shown for all flowers under the medium and high yield scenarios. The highest internal rate of return is for roses, 196.9 percent under the high yield scenario, while gladiola show a 96.1 percent with iii
high yields. Overall, therefore, the return on capital investment in flower production appears to be high under these simplified models. However, much caution should be exercised indrawing conclusions from these. The analysis here reflects a simplified model of existing production systems, and more farm survey work should be done, especially of agronomic practices, so the investment analysis can be more rigorous. GOVERNMENT PROMOTION OF CUT FLOWER PRODUCTION AND EXPORT Export policies and procedures have been streamlined inthe past few years to be more responsive to exporters' needs. In addition, several government agencies responsible for export promotion activities have been established. The Center for the Promotion of Exports (CEPEX), supported by the Ministry of Economy and Finance, promotes Tunisia's foreign trade and assists exporters and foreign importers in initiating business contacts. An export promotion fund (FOPRODEX) managed by CEPEX helps exporters access market research and promotes Tunisian products abroad. Another agency under the Ministry of Agriculture for the promotion of agricultural exports (APIA) provides services, such as information on the agricultural investment code for Tunisian and foreign investments, assists in identifying investment opportunities, and helps potential investors apply for financing from the National Agriculture Bank. Conclusions CONCLUSIONS AND RECOMMENDATIONS The two major conclusions drawn from this review of the Tunisian cut flower export sector are: 1. Tunisia has the natural, physical ad human resources to develop a competitive cut flower export sector ifa concerted effort ismade to remove the constraints identified in this study. 2. Most constraints that affect the Tunisian cut flower sector can be attributed to its very small scale. Economies of scale must be developed by collaboration among current producer/exporters and by cooperation between them and the relevant agencies of the Tunisian Government, Recommendations The report recommends that three interrelated actions be undertaken. The first addresses the private sector, the second deals with GOT actions and the third identifies the most promising foreign market for Tunisian flowers. 1. A private trade association of Tunisian flower exporters should be formed. This Tunisian Flower Exporters Association should promote the organized growth of the sector by representing growers' interests with the government and foreign investors and buyers. Similar successful associations incountries such as Colombia, Kenya and Morocco could serve as models for the Tunisian Association. iv
Page 1 and 2: APIP Agricultural Policy Implementa
Page 3 and 4: TABLE OF CONTENTS EXECUTIVE SUMMARY
Page 5 and 6: LIST OF EXHIBITS Exhibit 2.1 Major
Page 7: orchids, gladioli and tulips are th
Page 11 and 12: 1.1 Study Objectives 1. INTRODUCTIO
Page 13 and 14: covered seven major importing count
Page 15 and 16: 2. WORLD TRADE IN CUT FLOWERS AND T
Page 17 and 18: to all the major importing countrie
Page 19 and 20: 7 6 5 4 3 2 1 0 Millions of US$ Sou
Page 21 and 22: Exhibit 2.6 Value of World Imports
Page 23 and 24: ises in the level of imports were a
Page 25 and 26: Many of the European countries, suc
Page 27 and 28: in both activities. Finally, there
Page 29 and 30: These prices are for "extra" qualit
Page 31 and 32: Exhibit 3.1 List of Selected Grower
Page 33 and 34: grow flowers to sell intheir stalls
Page 35 and 36: flowers. Tunisian growers' willingn
Page 37 and 38: timing and coordination of loading
Page 39 and 40: distinguish it in the market (unlik
Page 41 and 42: profitable, assuming that high yiel
Page 43 and 44: 4.2 Cash Flow Analysis Exhibit 4.3
Page 45 and 46: ',,-t r,,VW AINLY5 o I 4 UR CARNATI
Page 47 and 48: uj CASH INFLOW Yield Price Value of
Page 49 and 50: CASH INFLOW Yield Price Vslc of ToW
Page 51 and 52: , . CASH INFLOW Yield Price Value o
Page 53 and 54: 5. TUNISIAN GOVERNMENT AGENCIES AND
Page 55 and 56: equired so much time. In an effort
Page 57 and 58: 6.0 CONCLUSIONS AND RECONNENDATIONS
Page 59 and 60:
7. Work with government and foreign
Page 61 and 62:
production is expensive because it
Page 63 and 64:
ANNEXES 53
Page 65 and 66:
The following solutions were offere
Page 67 and 68:
Miscellaneous maintenance (buying v
Page 69 and 70:
ANNEX 2-A ASSUMPTIONS FOR CALCULATI
Page 71 and 72:
Pesticide Costs: Lannate 21.0 DT/kg
Page 73 and 74:
GLADIOLA- ENTERPRISE BUDGET, LOW/ME
Page 75 and 76:
ANNEX 3 ISSUES RELATED TO POST-HARV
Page 77 and 78:
Acaricides: Kelthane 0,2 1/hl Systb
Page 79 and 80:
Mildrion: Manbbe 160 g/hl Zin~be 20
Page 81 and 82:
LE GERBERA GERBERA JAMESONII FAKILL
Page 83 and 84:
LE GLAIEUL GLADIOLUS FAMILLE DES IR
Page 85 and 86:
O Annex b Quality Required by the C
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ii) Categorie U1 10 % des fleurs co
Page 89 and 90:
RE7UMLI93B TUMISI MIC KINISTE E DE
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IPARTICIPANTS I ADRESSE TELEPHONE V
Page 93 and 94:
IPA.TIC!PANTS I ADRESSE TELEPHONE I
Page 95 and 96:
Wholesalers/Importers ANNEX 8 PERSO
Page 97 and 98:
APIP Agricultural Policy Implementa
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Abet Jacques 43, Avenue du Cimetibr
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Ariaflor Box 147 - Fleurs 4 M.I.N.
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Berry Fleurs SARI Ruelle des Gats P
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Briois Christine 219, All6e des Oei
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Cochet Thierry SARL 160, AII6e des
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David Barthdlmy Charlin; Delamare G
Page 111 and 112:
I Dia - Fleurs Box no 2 - SICA - Ma
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Fleurassistance GlE 149, Avenue des
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Flora Partner SA 23, rue Nicot 3300
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Galoppe Christine 135, AII6e des Oe
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Granier Michel Ets 28, Avenue Pierr
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Iris 200 199, AII6e des GlaTeuls 20
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Landes Fleurs SARL 44, Boulevard de
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Lotte et Cie Magnon Ets 59, AIIde d
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Marcucci G6rard SARL 4, rue Layriss
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Minnaar Fleurs SARL Moreau Th6r~se
Page 131 and 132:
Olivreau SARL 220, A1l6e des Oeille
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Penja 260, A116 des Arums 94644- RU
Page 135 and 136:
Pierlot et Cia 259, AlMa des Oeille
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I Roata - Pignet SA ROA TA . PIGNE
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La Roseraie 51, AII6e des Arums 941
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Salanque Flours Domaine Sainte Eug6
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Silva Flor St6 Aquitaine de Diffusi
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Sodlh Monpalasir 47320 - BOURRAN T6
Page 147:
Vettese Jean Fleurs 360 112, AIl6e
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