FOOD AND AGRICULTURE ORGANISATION OF THE UNITED NATIONS GCP/SYR/006/ITA Implications for the Agricultural Sector of Rec

1. FOOD AND AGRICULTURE ORGANISATION OF THE UNITED NATIONS GCP/SYR/006/ITA Implications for the Agricultural Sectorof Recent Developments in Private and Public Agricultural Marketing and Processing Activities in Syria by Daniele Rama

2. The staff: • Intl consultant: Daniele Rama • Natl consultants: Mohammed Zein El Din, MARR Barakat Chaheen, MI • Trainees: Waffika Hussni, Muna Hallak, Fayez Mansour, Usama El Sa’di, Mohannad Melhem • (+ about 70 people more…) Agro-food marketing in Syria

3. A general hint: The study is focused on “non strategic products” and, when analyzing the mechanisms of vertical co-ordination, particularly on fresh and processed fruits and vegetables and on dairy products. Agro-food marketing in Syria

4. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? Agro-food marketing in Syria

5. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? Agro-food marketing in Syria

6. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? 3. how do vertical co-ordination mechanisms work? Agro-food marketing in Syria

7. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? 3. how do vertical co-ordination mechanisms work? 4. which are the policy implications? Agro-food marketing in Syria

8. Four basic questions: • 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? 3. how do vertical co-ordination mechanisms work? 4. which are the policy implications? Agro-food marketing in Syria

9. 1. Are there suitable pre-marketing conditions for the development of an efficient supply chain? 1.1 slow, but significant, change in consumption patterns; 1.2 quantity-oriented development in agriculture; 1.3 low propensity to export and strong protection from import; 1.4 limitations in currency convertibility and access to credit; Agro-food marketing in Syria

10. 1. Are there suitable pre-marketing conditions for the development of an efficient supply chain? 1.5 especially through input and credit allotment, the agricultural planning system crucially affects farmers decisions; 1.6 agricultural and food prices are subject to constraints more or less severe; 1.7 limited effects of the “new” policy for private investment. Agro-food marketing in Syria

11. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? • 2. who are the agro-food operators and how do they perform in marketing competition? 3. how do vertical co-ordination mechanisms work? 4. which are the policy implications? Agro-food marketing in Syria

12. 2. Who are the agro-food operators and how do they perform in marketing competition? 2.1 agricultural co-operatives: not a supply concentration tool; 2.2 agricultural bank: almost unique operator in agricultural credit and main input supplier; 2.3 state agricultural companies: economic units completely separate from farmers, mostly product oriented; Agro-food marketing in Syria

13. 2. Who are the agro-food operators and how do they perform in marketing competition? 2.4 state food companies: non-independent decision makers, they are in a difficult position in order to compete with private companies and can survive only through their access to protected markets; 2.5 private food companies: basing their competition on product differentiation and innovation as well as new retail channels; difficulties in the establishment of contractual relations with farmers and in raising capital; Agro-food marketing in Syria

14. 2. Who are the agro-food operators and how do they perform in marketing competition? 2.6 traders: often a long sequence of intermediate operators between the agricultural producers and consumers; in a non-structured agricultural sector, this sequence represents the only way to have an adjustment between demand and supply; 2.7 state distribution companies: less important and declining role than in the production and processing sectors. Agro-food marketing in Syria

15. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? • 3. how do vertical co-ordination mechanisms work? 4. which are the policy implications? Agro-food marketing in Syria

16. 3. How do vertical co-ordination mechanisms work? 3.a fresh products: 3.a.1 lack of a market information system; 3.a.2 poor sorting/grading, especially for the internal market; 3.a.3 middleman commission (apparently) higher than the official level. Agro-food marketing in Syria

17. 3. How do vertical co-ordination mechanisms work? 3.b processed products: 3.b.1 informal sector is dominant; 3.b.2 processing as an appendix of fresh products market; 3.b.3 seldom contracts between farmers and processors. Agro-food marketing in Syria

18. 3. How do vertical co-ordination mechanisms work? 3.c all products: 3.c.1 traditional retail is by far the most important marketing channel (with exceptions for differentiated products); 3.c.2 collective consumers are often vertically related to state production and processing companies. Agro-food marketing in Syria

19. Four basic questions: 1. are there suitable pre-marketing conditions for the development of an efficient supply chain? 2. who are the agro-food operators and how do they perform in marketing competition? 3. how do vertical co-ordination mechanisms work and how can they be improved? • 4. which are the policy implications? Agro-food marketing in Syria

20. 4. Which are the policy implications? 4.a some general concepts: 4.a.1 solve internal contradictions; 4.a.2 remove obstacles; 4.a.3 develop “push” factors. Agro-food marketing in Syria

21. 4. Which are the policy implications? 4.b tentative action lines: 4.b.1 horizontal and vertical co-ordination: • reorientation of farmers co-operatives; • legislative framework and incentives for integration contracts. Agro-food marketing in Syria

22. 4. Which are the policy implications? 4.b tentative action lines: 4.b.2 services implementation: • market information service; • services for export; • more “classical” services. Agro-food marketing in Syria

23. 4. Which are the policy implications? 4.b tentative action lines: 4.b.3 removing blocking factors: • liberalization of pricing system; • better currency and credit access; • import restriction relaxation. Agro-food marketing in Syria

24. 4. Which are the policy implications? 4.b tentative action lines: 4.b.4 improvement of business environment: • removal of administrative uncertainty; • ensuring guarantees for investments. Agro-food marketing in Syria

25. 4. Which are the policy implications? 4.b tentative action lines: 4.b.5 corporativization of State agricultural and food companies: • adoption of innovative management and investment principles; • opening to private capital. Agro-food marketing in Syria