Strategy development and policy making
In order to improve poor supplies, two different strategies had evolved within the industry: To increase vertical backward integration (agribusiness through ownership or log term leasing of land). Both strategies recognized that horticultural/agricultural production and processing could not be separated. This interdependency was highlighted by the short life span of fresh fruit and resulting high losses within the production channel if cooperation was not achieved. Either one approach required an agri-business management philosophy.
Ms. Kubekova was left with the feeling of indecision about what strategy to implement. The Cooperative stressed the need for cooperation and leadership of perhaps 20 or more individual growers. She wondered about whom would do the leading and at what terms. The problem was that all members in the cooperative were small; either the producers or processors had demonstrated no significant leadership. The farmers’ interest in forming a cooperative could lead to their channel leadership; this was a step in the right direction.
But this also meant increased market leverage for the coop members, which would lead to higher prices. Her past experience with contract farming had worked when a bumper crop had occurred putting pressure on prices in the open market. However, breaking the contract by delivering
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However, she reasoned that a growers cooperative would have more central command, and she might be better off with signing contracts with central management and let them deal with the individual growers to delivering the contracted produce or not! If she went her own way and became am agribusiness manager by integrating backwards, would this strategy solve her supply problems? She was not an expert in horticulture production. She might have to hire an agronomist. What about the lead-time before harvesting? She also realized that most of her raw materials had a one-year seed-to-harvest crop cycle.
Would she experience discrimination if her crops would fail and had to buy outside her own production system.? What about the additional financial drain i. e. capital investment into land.? Low interest government loans were available but her fixed costs would increase. Should she consider leasing or a joint venture, which would mean less risk, but would also involve the sharing of potential profits? Questions: 1) What are the risks and opportunities involved in using an ‘ cooperative development’ to solve supply problems of Ms. Kubekova? 2) What are the risks and opportunities involved in using a agribusiness management (i. e. through land ownership or long term leasing) to solve the supply problems of Ms. Kubekova?
3) What other suggestion do you have to solve Ms. Kubekova’s supply problems 4) What are the global trends in international agriculture : a) Cooperative Development or b) Agribusiness Management through integrating agriculture with processing 4) What are the prospects of applying agribusiness management to Kazakhstan’s agriculture. To engage in research and development to study the physical and chemical characteristics of the fruit available in Uzbekistan throughout the year and to evaluate they’re processing potential.
To develop formulae for high quality preserves and upgrade the existing commercial formulae specifically for jams jellies chutneys, and non-traditional pickles. Given the above, to develop a marketing strategy for import substitution and maintain prices at competitive levels. To encourage more horticultural production, greater utilization of farm products, improved employment opportunities for processing. To serve as a pilot project for the possible transfer of technologies to the areas where raw materials are in abundance.