Value Chains research report Tajikistan final - Microfinance Centre

- Construction of a greenhouse;
- Annual repair and replacement of a film covering,
- Ones per few years repair and replacement of carcasses, drip irrigation;
- Purchase of seeds or seedlings;
- Fertilizers and crop protections products;
- Heating (if needed);
- Cultivation;
- Service of irrigation system;
- Labor;
-Transportation.
In the greenhouse vegetable production, nature of the business requires growers to
incur upfront expenses (more than 50% of total cost of production) before planting to
purchase polyethylene films and seedlings. Due to the size of their operations, many
growers cannot save their profit for the next season to cover their upfront expenses.
Therefore, they are left with two options: either to borrow necessary funds or to buy
those inputs on credit at higher price. Generally, growers use latter option due to lack of
external financial resources at reasonable interest rate. Both these option could be used
by financial institution for financing that VC needs.
Market Attractiveness
This industry is characterized by multitude of small-scale producers and relatively many
buyers. Products are not differentiated and almost all the producers offer the same
varieties of tomato and cucumbers, thou some producers start to grow tomato cherry
red and yellow colors. Therefore, rivalry among the producers and bargaining power of
buyers is high in this industry. Suppliers of main inputs - seeds and polyethylene films
(plastics covers) - have also some degree of bargaining power over producers.
However, excluding initial investment in the construction of greenhouse, barriers to
entry are somewhat high (especially for December and February planting). Main
reasons as follow:
• Necessary skills for greenhouse production,
• Limited access to land
• Access to the engineers which will construct greenhouse with proper heating
design.
• On average, it takes at least 3 years to acquire necessary skills for proper
cultivation technology.
Distribution Channels
Producers market their output in the domestic market through retailers. Whereas
exported products are sold to foreign retailers in the wholesale market channels out
through consolidators and traders (exporters). There is some degree of vertical
integration in the supply chain between producers and exporters.
Prices for greenhouse tomato
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