Agroindustrial project analysi

THE PROCUREMENT FACTOR 91Even with such adjustments, storage is the prime regulator betweenthe production and transformation of raw material. Storageabsorbs the concentration of raw material and channels it into theprocessing operation as it is needed. Although external storagecapacity and services may exist, the agroindustrial plant usually willalso need to provide its own storage. The storage capacity requiredby a firm can be determined by computing the cumulative flowneeded during the harvest period to meet the firm's annual requirementsof raw material. As an example, the flow of raw materialand the utilization of milling capacity for rice in Thailand areshown in table 3-3. Smaller mills have lower storage capacities andsteadier milling rates throughout the season than do larger mills.Differences in the nature of the businesses are responsible for thediscrepancy: the small mills provide services primarily to farmerswho store their paddy rice at home and bring it for milling as theyneed to consume it, whereas the large mills buy the rice fromfarmers at harvest time, mill it, and resell it. Thus, the nature of thebusiness also determines when a crop is supplied.For perishabilityRaw materials are perishable in varying degrees. Some materialsmust be processed immediately or the product suffers a significantloss in quality and economic value. For example, the nut oil fromthe African palm must be processed within a few days of picking orit acidifies and cannot be used. Similarly, if cucumbers are notharvested during the few days they are mature, they rapidly becomeoversized and unfit for exporting. The time of harvest canaffect nutrient content, and postharvest delays can cause nutrientlosses. For example, vine-ripened tomatoes contain approximately40 percent more vitamin C than tomatoes picked green for subsequentripening in storage. 16 Perishability places great importanceon harvest programming and the scheduling of farm-to-factorytransport and the analyst must determine whether transport servicesand scheduling are adequate to the resources of suppliers.16. J. M. Krochta and B. Feinberg, "Effects of Harvesting and Handling onthe Composition of Fruits and Vegetables," in Nutritional Evaluation of FoodProcessing, 2d ed., ed. R. S. Harris and Endel Karmas (Westport, Conn.: AviPublishing Co., 1975), p. 98.