Agroindustrial project analysi

8oAGROINDUSTRIAL PROJECT ANALYSIS- Other industrial uses- Competitors' purchases- Losses= Net availability.Each of these deductions from gross production of raw material isdiscussed below.ON-FARM CONSUMPTION. One early crop deduction is that quantitywhich does not enter the commercial market but is consumed on thefarm. In general, the more important the raw material to the diet ofthe rural population and the smaller the farm, the greater is itsproportion of on-farm consumption. A subsistence farming pattern,however, may simply reflect the lack of a ready cash market outlet.If there is a market opportunity, a greater portion of the cropmay be sold. If the market opportunity causes a crop switch fromstaple to cash crop, the nutritional well-being of farm families (aswell as of landless laborers) may suffer. This possible effect dependson the increased sales, the income and price elasticities of thefamilies for food and nonfood items, and the prices of these goods.Accordingly, the analyst must project and monitor the effects of theprocessing plant's raw material requirements on the population'snutritional intake. 5CONSUMPTION OF FRESH VERSUS PROCESSED CROPS. Another deductionis for the portion of the crop that is consumed in fresh, ratherthan processed, form. Some agroindustries must compete againstthe market for fresh agricultural products, and the intensity of thecompetition and its variation according to consumer preferencesshould be assessed by the analyst. In Mexico, for example, 90percent of tomato production is consumed fresh. Fifty percent isfor the domestic market and 50 percent exported to the U.S. wintermarket, where tomatoes receive a premium price in the absence ofU.S. production. 6 In the United States, however, 83 percent of the5. See Richard Goldman and Catherine Overholt, Nutrition Intervention inDeveloping Countries: Agricultural Production, Technological Change, andNutrition Goals, U.S. Agency for International Development, Special Studyno. 6 (Cambridge, Mass.: Oelgeschlager, Gunn, and Hain, 1980).6. Organization for Economic Cooperation and Development (OECD), "Tomatoes:Present Situation and 1970 Prospects" (Paris, 1968), pp. 11, 79.