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

Discussing the findings
Comparison of growth trends and smallholder involvement
The estimated annual growth trend for domestic value chains in vegetables and fruits is around
4 per cent, amounting to 672,000 tons of incremental horticultural produce. This compares with
the export quality value chains, which show a 9.9 per cent growth in fruits, amounting to
110,715 tons of incremental produce per annum, and a 12 per cent growth in vegetables, amounting
to 61,000 tons.
The rapid rise in demand for export quality is forcing exporters and processors, who have used
all their own land resources, to obtain horticultural produce from smallholders. The potential for
increasing the EU market share of Egypt by widening the number of countries receiving Egypt’s
exports is considerable. This would also raise the demand for Egypt’s products.
It is important for smallholders to participate in producing export crops at a stable annual
growth rate, thereby reducing the possible impact of economic shocks. The export crops with the
most stable growth from 2000 to 2005 are shown in table 18. It would require an additional
2,778 feddan per annum to keep up with the growth in the demand for these crops. Exports of
tomatoes have steadily increased over the past three years; the annual growth has been 40 per cent
(1,505 tons). If this trend continues, the crop could also become important for smallholders.
Data on the consumption of vegetables in the modern retail market and the processing industry
are not available by type of crop, but the bulk of consumption involves tomatoes, potatoes, onions,
beans, peppers and artichokes, representing around 60 per cent of the total annual consumption
of 89,220 tons for the two markets. It is estimated that an additional 8,922 feddan would be
required to meet this growth.
Strawberries, grapes and bananas might be considered for fruit production by smallholders.
They show yields relatively quickly and early and, therefore, only require a short period of
investment before they generate a cash flow. Strawberries and bananas would show yields the year
they are planted, while grapes would show yields 14 months after planting. The annual growth
trend based on the period from 2000 to 2005 is shown in table 19, together with the corresponding
incremental feddan needed for the extra cultivation.
Table 18 Growth trends for selected vegetable crops for export
Annual average
Estimated annual
growth
increase in feddan
to produce the
Vegetable crops Tons % increase in exports
Potatoes 18 875 10 1 840
Green beans 2 090 10 442
Artichokes 1 271 31 135
Onions 1 168 63 82
Chillies and green bell peppers 720 91 106
Chicory and lettuce 587 24 61
Garlic 532 17 56
Melons 517 54 54
Total - - 2 778
Source: FAOSTAT, 2000-2005.
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