Egypt: Smallholder contract farming for high-value and ... - IFAD

for shipment. Less perishable produce will also be pre-cooled, but shipped by sea in refrigerated
containers from Alexandria to the final destination. In the analysis below, a typical export quantity
of 5 tons of beans and 40 tons of potatoes has been used, but the share of the revenue is based on
1 feddan of smallholder land.
The total exporter margin for beans and potatoes is 700 and 444 per cent, respectively, of which
72 and 76 per cent, respectively, are related to value added, which makes the actual return on the
exporters investment 28 per cent for beans and 24 per cent for potatoes.
Produce for the modern domestic retail market. According to Carrefour, a premium of around
45 per cent could be paid for export-quality beans, and 20 per cent for export-quality potatoes. If
exporters had sold the above consignment to Carrefour instead, minus the cost associated with
overseas shipment, it would have returned a profit of EGP 8,675 and EGP 4,032, or 26 and 17 per cent,
respectively, for green beans and potatoes. The absolute monetary return is lower than the return
on exported produce, but still lucrative.
Produce for processors. If an exporter had sold the produce to a processor, the profit (minus the
cost related to pre-cooling, packaging and export administration) would have been 18 and 13 per cent,
respectively, for beans and potatoes. This is lower than the profit for export and sale to supermarkets,
but engagement in the supply for processors is still attractive.
Table 15 Cost mark-ups, exporter sales to the modern retail market
Logistics time, hours
Logistics cost, EGP
Green beans, Potatoes, Green beans, Potatoes,
Activities and cost items 5 tons 40 tons 5 tons 40 tons
Cost of the crop 6 500 32 000
Coordination of harvesting 8 2 20 3
Pre-cooling, including transport from the field 8 16 1 250 10 000
Grading and packaging, including carets and bags 5 8 3 750 1 375
Road transport to importers and offloading 8 16
Landed cost - - 11 520 43 378
Profit 4 032 8 675
Retailer price 15 552 52 055
Cost per kilogram 3.1 1.3
Table 16 Cost mark-ups for sale to processors
Logistics time, hours
Logistics cost, EGP
Green beans, Potatoes, Green beans, Potatoes,
Activities and cost items 5 tons 40 tons 5 tons 40 tons
Cost of the crop 6 500 32 000
Coordination of harvesting 8 2 20 3
Road transport to importer and offloading 8 16 50 400
Landed cost 6 570 32 403
Profit 1 530 4 860
Processor price 8 100 37 263
Cost per kilogram 1.62 0.93
40