Agroindustrial project analysi

THE PROCUREMENT FACTOR 89of the qualitative specifications for the raw material. Some firmsoffer premium prices and penalty discounts to stimulate producers'use of inputs and cultivation techniques that improve the qualityof raw material. Other firms inspect crops while they are growingto detect problems such as insect damage and to minimize loss ofquality. Sometimes the plant must produce the raw material itselfto ensure adequate quality control. This form of backward verticalintegration will be discussed in the section "Organization of theProcurement System," below.Salient points for project analysisIt is evident from the discussion above that quality is importantin procurement. The analyst should consider the following questionswhen examining the quality of an agroindustry's raw materialsupply.What are the market's qualitative requirements?* Different segments' standards?* Price premiums for quality?What is the quality of the inputs for farm supply?* Effects of seed varieties?* Effects of agrochemicals?* Farmers' knowledge of input usage?How does handling and transport affect quality?* Personnel adequately trained?* Availability and quality of transport?* Nutritional deterioration?i Adverse changes in appearance?How does storage affect quality?e Type of facilities?- Quality of facilities?- Nutritional deterioration?* Adverse changes in appearance?What services can increase quality control?* Inputs provided by processor?* Cost?