Agroindustrial project analysi

THE PROCUREMENT FACTOR 107Seeds and fertilizer are divisible inputs equally applicable to largeand small farms if the project can ensure that financial and technicalassistance are also available. In West Pakistan, for instance,small farmers adopted low-cost tubewell systems, suggesting thatirrigation needs can also be addressed at the small-scale level.' 9LOCATION. The firm must know the location of the producers inorder to determine transport costs, optimal plant location, logisticalcontrol problems, and the vulnerability of supply to disease ordrought (if these are geographically concentrated).CROP MIX. The analysis should identify growers of specific cropsand the relative market importance of these growers and crops toanticipate shifts by suppliers among them. Patterns of crop specializationwill also be revealed by the analysis.OWNERSHIP PATTERNS. The analysis should define land that isowned, rented, sharecropped, or squatted. Owners may be morewilling than renters to adopt new cultivation techniques becauseof the fixed investments but, again, the project should make a consciouseffort not to favor the land-owning farmers over the rentersand thus to encourage the dichotomous agricultural structure. Financialincentives and land-reform programs may be necessary forthe project to maintain this evenhandedness. Inequitable landtenure is a fundamental constraint on agroindustries' achievingtheir developmental potential.FLOW. The analyst should also determine the quantity and sequenceof produce flows through each operator in the procurementsystem. These distribution channels should be documented so thefirm can determine whether the project can also use the existingflow system.Analysis of channel powerNot only the structure of the procurement system must be understood,but its inner operations, including the system's power rela-19. Frank C. Child and Hiromitsu Kaneda, "Links to the Green Revolution:A Study of Small-scale, Agriculturally Related Industry in the Pakistan Punjab,"Economic Development and Cultural Change, vol. 23, no. 2 (January1975), pp. 249-75.