Agroindustrial project analysi

THE PROCUREMENT FACTOR 85Is there competition in procurement among similar agroindustries?* Number of competitors?* Size of their raw material needs?* Their procurement methods?What are the probable crop losses?* From rodents, insects, handling, storage?* Measures to reduce losses?* Adequacy of on- and off-farm services and storage facilities?Acceptable QualityA firm should not only have an adequate supply of raw material,but the material should meet the qualitative requirements of theoperation. Raw material of poor quality may yield a product ofpoor quality that can create consumer resistance and have longrangeeffects on the firm's market position.Marketplace requirementsThe analyst must decide qualitative criteria for the raw materialthe firm uses. These criteria depend on standards of acceptability inthe consumer market. This correlation again illustrates the interdependenciesof agroindustry: to analyze the supply segment, theanalyst must examine the marketing segment; to determine theparameters for quality, the analyst must perform the consumeranalyses discussed in the previous chapter. In that chapter it wasindicated in the consumer analysis that market segments within thesame market have different qualitative standards dependent onvariations in consumers' buying patterns. Cucumbers produced inGuatemala are an illustration of this variation. If the produce is tobe packed and exported to the United States during the winter, itwill be entering a highly quality-conscious market, and the analystshould identify the qualitative characteristics that reflect themarket's preferences.For example, a Guatemalan cucumber-packing project exportingto this market would have to apply rigorous criteria for color,size, shape, taste, and general appearance to the local crop (in