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Wen-Chi Huang Deputy Secretary General, TWADA President, Taiwan DHRRA Associate Prof, NPUST

Session 2 : High Quality Products at Higher Prices: The experience of the Taiwan Wax Apple Development Association (TWADA). Wen-Chi Huang Deputy Secretary General, TWADA President, Taiwan DHRRA Associate Prof, NPUST. Background. What is TWADA? Brief Background of TWADA, History

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Wen-Chi Huang Deputy Secretary General, TWADA President, Taiwan DHRRA Associate Prof, NPUST

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  1. Session 2:High Quality Products at Higher Prices: The experience of the Taiwan WaxAppleDevelopment Association (TWADA) Wen-Chi Huang Deputy Secretary General, TWADA President, Taiwan DHRRA Associate Prof, NPUST

  2. Background • What is TWADA? Brief Background of TWADA, History • Why it formed wax apple producers into an organization • Average farm sizes, average production • Brief description of the market of wax apple

  3. TWADA • TWADA = Taiwan Wax Apple Industry Development Association • Established in August 31, 1999. • Initiative by Kaohsiung District Agriculture Research and Extension Station to enhance the ability of the existing “wax apple production and marketing teams” to expand the domestic and export market

  4. What is its current operations engaging and linking farmers and their produce with markets • wax apple production in 2007 • cultivated areas: 6,792 ha, • harvested areas: 6,736 ha, • average output : 12,207 kg/ha, • total output: 82,223mt.

  5. Marketing Initiatives • Major production season is between late Oct. to early June • More than 50% go through the production and marketing team to be collected, graded, packaged and send to Farmers’ Association for joint marketing to the top three biggest consumption market in Taipei, however, it is already a mature and stable channel. • Door-to-Door delivery services by the commercial companies provide a new chance of direct marketing through internet • Export trade is approximately 5% (compared with the national statistics of 0.05% in 2007)

  6. Domestic Market

  7. Farm Gate Price

  8. Brand Names for Wax apples:Farmers Associations 枋寮地區農會 佳冬鄉農會 潮州鎮農會 六龜鄉農會 林邊鄉農會 南州鄉農會 里港鄉農會

  9. Brand Names for Wax apples:Production & Marketing Teams 東港果樹第2班 麟洛果樹第3班 南州果樹第1班

  10. Performance of the Branded Product in the Wholesale Market • The product price information in the wholesale market island wide is available (within one month) show that the price can range from US$2.81/kg to US$12.5/kg with an average of US$5.28/kg

  11. Export and Import Source: Government web page for promoting export of Waxapple

  12. Major Export Market for Wax Apple

  13. Export in 2008

  14. Seasonality of Export • Between 1995 to 2005 the waxapple are exported only during part of the year, but ever since march 2005 to now, there is continuous shipment made • The production are timed to different market from different production area, and the decision of the production planning of the farmers

  15. Export Supply

  16. Import • Taiwan used to import From Thailand • In 1995 (8,540kg @US$ 0.803/kg) From Vietnam • In 1995 (263,385kg @ US$0.466/kg) • in 1997 (309,878kg @ US$0.700/kg) • In 1998 (391,350kg @ US$0.588/kg) • Note: Taiwan started to export in 1995, to US (75kg@US$7.827/kg)

  17. How do TWADA address the following issues: • Economy of scale in terms of delivering products to the market • How do product quality standards and policies are implemented to ensure consistent quality? What are the mechanisms for quality and food safety control • What are the policies that govern product quality and food safety standards within TWADA

  18. Economy of Scale • The teaming up of farmers could have tremendous saving on the chemical and fertilizer costs. And to negotiate the term of the trade. • By knowing the quality and timing of the harvest, the members could plan ahead for the targeted marketing season and channel.

  19. Implementation of product quality standards • TWADA provide technical support for the members. The qualified products are encouraged to be exported to increase the farmers’ revenue.

  20. Mechanism for quality and safety control • TWADA set up the standardized operation procedure based the Global GAP standard • The quality standard has been set up by TWADA into 3A,2A, and 1A. It is still depend on the visual examination of the fruits to see which level does it fit into. • More on the quality standard……

  21. There are 24 grades of Wax apple • 4 fruit sizes: XL (120-150g), L(100-120g), M (86-100g), S(75-86g) • 6 internal quality: AAA, AA, A, BBB, BB, B • Grade A represent sweetness level of Brix 10 or above; B represent Brix 8 or above. • A represents dark red (black)，B represents pink; • AAA is bright black, the level of darkness decrease with AA and A • BBB is red, and the color fades with descending order with BB and B. B is light red color

  22. Policies govern product quality and food safety standards within TWADA • Good Agriculture Practice (GAP) • They are based on the production and marketing teams to apply for the government standards • Traceable Agriculture Product (TAP) • Now focusing on product for export (mandate); other farmers can participate voluntarily • Global GAP • Local government helped financing on the accreditation of the model production and marketing team (of Mr. Tsai) (the first one, globally)

  23. Good Agriculture Practice (GAP) • The GAP logo is a accredited logo for qualified in chemical residual. Weblink for the GAP authority of the Agriculture and Food Agency of COA: http://agrapp.coa.gov.tw/GAP/JSP/index_1.jsp

  24. Traceable Agriculture Product (TAP) • Logo, production information, accreditation organization, traceability code, and where to obtain the information has to be clearly show on the product. • The farmer has to follow the product specific operation manual

  25. Where does TWADA get support, technical, financial, marketing, etc.? • The Kaohsiung District Agricultural Research and Extension Station (KDAS) is the responsible government extension branch in providing technical assistant. • In fact the TGAP for wax apple was complied by KDARES

  26. Where does TWADA get support, technical, financial, marketing, etc.? • TWADA collect membership fees from the members • Financial and marketing initiatives are grant-based; there is no guarantee of funding.

  27. Where does TWADA get support, technical, financial, marketing, etc.?(3/3) • Successful cases • join in the international marketing by COA to various export destinations • Grant on packaging materials; • TWADA communicates to local authority on product show/competition • Wax apple competition is held every year • Wax apple was among the top 10 most popular fruits in 2007 (voted by consumer over the internet)

  28. How does TWADA contribute to the incomes of its members? What are the income levels of wax apple farmers under TWADA? • TWADA is not a profit making entity. • The members annual average revenue is NT$200,000 per 0.1 ha, which means the average revenue per hectare is 2 million. • The average farm size is 0.7ha-1.1 ha

  29. What are the advantages and disadvantages of a commodity-based organization of farmers? • Advantage: wax apple production need special technique. TWADA has its own technical team to help out other members. It is always important to have alternative channels for marketing the products to be better informed of the situation

  30. What are the advantages and disadvantages of a commodity-based organization of farmers? • Disadvantage: since it is difficult to take of the fruits (typhoon and cold front causes the losses) that some of the members are also engaged in other fruit production to diversify the income source. • Other Comments: • The members of the TWADA are also members of the respective farmers associations. The FA provide comprehensive services, and due to concentrated production area of the wax apple, some FA also put their efforts to promote wax apple, but they are not focusing on export market.

  31. Other important advice, suggestions for farmers groups, NGOs on small farmers engaging with markets. TWADA is not a profit making entity. • But we use our advantage as a data-warehouse for channeling the trading companies with the farmers who are interested in international marketing, and help to improve on the term of trade. • Small farmers should try to cooperate with other farmers to enlarge their scale to become more competitive in the market

  32. Some News scripts • On Jan, 2003, a local newspaper in Vancouver, Canada reported that the waxapple from Taiwan is soon to be sold in the supermarket there. The TWADA Chairman, Mr. Chen, M.F. talked to the group of supermarket managers in Vancouver about the marketing plan of waxapple there. • On Jan 15, 2004 one of the branded high quality waxapple (Lin-bien Township in Pingtung) is able to get the top bid of the Taipei wholesale market ever: 10 wax apples for NT$6,000 (US$182)!

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