UHBDPУкраїнський проект бізнес-розвитку плодоовочівництва

Kakhovka, Ukraine September 14, 2015

Dry Beans. Prospects for the product that generates high added value.

Overview

UHBDP

• Dry edible beans, or field beans, come in a wide variety of market classes, including kidney bean, navy bean, pinto bean, and black bean. These beans, although differing in the size and coloring of the seed, are all just different types of a single species, Phaseolus vulgaris L.

• Originally domesticated in Central and South America over 7000 years ago, dry beans moved their way northward through Mexico and spread across most of the continental U.S.

• Although grown on a much smaller acreage than soybeans, dry beans are still an important food crop in the U.S. The leading states in dry bean production are North Dakota, Michigan, Nebraska, Colorado, California, and Idaho (The same climate of South Ukraine).

• However, the advantage of dry beans as an alternative is their relatively high price, ranging from $12 to $20 per bushel (0,88-1,46 USD/kg). ttps://www.hort.purdue.edu/newcrop/articles/ji-beans.html

Overview

UHBDP

• According to the 2007 Census of Agriculture, 6,236 U.S. farms produced dry edible beans (excluding dry lima beans) on 1.46 million acres, 24 percent of which was under irrigation. More than a fourth of that irrigated land was in Nebraska. North Dakota produced the most dry beans, 38 percent of the national output, in 2006-08. Michigan (14 percent), Nebraska (11 percent), Minnesota (10 percent), and Idaho (7 percent) were among the top five States. The average farm value of the dry bean crop was $759 million in 2006-08, with about $2 billion in estimated consumer sales http://www.ers.usda.gov/topics/crops/vegetables-pulses/dry-beans.aspx

Exports• The United States shipped more than 8.9 million cwt of dry beans, a slight increase from the previous

year, to 102 nations in 2010. Mexico, Canada and the United Kingdom (UK) remained the top three destinations, accounting for 50 percent of dry bean exports. The volume shipped to Canada rose by double digits (38%) while the volume shipped to Mexico and to the UK dropped by double digits (-23% and -10% respectively). (ERS 2011) http://www.agmrc.org/commodities__products/grains__oilseeds/dry-edible-bean-profile

Overview

UHBDPhttp://www.ers.usda.gov/media/1680444/vgs-354.pdf

Overview

UHBDP

• The mature pods prior to harvest. Modern varieties of the crop stand erect with most of the pods high up the stem where they can be easily harvested. Typically beans contain twice the protein content of cereal crops like wheat - a factor that has contributed to their continued use in the UK over the last 3000 years.

• Harvesting beans The national bean crop typically covers between 110 and 170,000 hectares each year. Average yields for the UK crop are around 3.75 tonnes per hectare with typical values between £70 - £90 per tonne.

• Most of the bean crop is grown for stock feed and is used as a locally grown GM free alternative to protein crops like soya.

• The major human consumption market for beans is the Middle East where beans are used prior to the Ramadan fasting period. http://www.ukagriculture.com/crops/field_beans_uk.cfm

Overview

UHBDP

Canada's Dry Bean Industry• There are several types of dry beans (Phaseolus vulgaris) produced in Canada including white

pea beans (navy beans), red kidney beans, great northern, black, small red, pink, pinto and cranberry (Romano) beans. A warm-season crop, sensitive to frost, dry bean quality is evaluated on the basis of three main criteria: size, shape and colour. Dry beans are a leguminous crop and are able to fix their own nitrogen. Crop rotation with cereals grains or corn is recommended to reduce disease, improve soil fertility, and help in overall weed control.

http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-product-sector/crops/pulses-and-special-crops-canadian-industry/dry-bean/dry-bean-statistics/?id=1174506503179

Overview

UHBDP

Canadian Bean Acres, Production, Exports Up (Sep 14, 2012)• According to Statistics Canada’s survey of farmers, dry bean

acres have rebounded from last year. Statistic can estimates white dry bean acreage at 100,000, up from 55,000 last year, an 82 percent increase. Acres of colored beans are pegged at 182,000, up 58 percent from the 115,000 acres planted in 2011.

• As a result, total Canadian dry bean production and supply are expected to rise, especially for the larger classes of dry beans such as white pea and pinto types. Exports are forecast to increase due to the increased supply and carry-out stocks are expected to rise. The US and the EU-27 are forecast to remain the main markets for Canadian dry beans, with smaller volumes going to Japan and countries in Africa.

• Agriculture and Agri-Food Canada pegs total Canadian dry bean area at 291,000 acres, up 71 percent from 2011. Production is expected to jump 59 percent from last year, to 230 million tons. Exports are estimated to rise 20 percent from the previous marketing year, and the average dry bean price is projected to decline 12 to 13 percent.

http://www.farms.com/news/canadian-bean-acres-production-exports-up-55224.aspx

Overview

UHBDP

• Over 12 million tons of dry beans are produced annually world-wide, with a total production value of US million $5717.

• Of this production, 81 percentage occurs in tropical countries.• Today, Brazil remains the most important country for production and consumption of

beans in the world (13), followed by Mexico. These two countries are nearly self-sufficient in the crop, but bean imports can be essential to supplement periodic production shortfalls.

The United States has lost its position as top world exporter to China. Unlike rice and wheat, fundamental to the Chinese diet, dried beans are not government controlled in China. Farmers have a valuable cash crop with production almost wholly for export. This has made China the fastest growing supply source in the world although quality control is lacking.

http://www.fao.org/3/a-av015e.pdf

Overview

UHBDP

• Beans - traditional culture for Ukraine. Unfortunately, in recent decades, the area under this crop was small, it mainly grown in home gardens. According to the State Statistics Service of Ukraine, on the basis of bean production in 2014 amounted to 43.3 kT, which is almost 20% higher than the previous year and reached record levels (2014). Over the last five years, production of beans varied from 28.8 to 43.3 kT.

• The main factors that influence the production include cultivation area and yield of crops. Thus, last year the beans were grown on an area of 28.7 kHa, more than the previous year by 13%.

• Thus in recent years the area under the crop was less than last year. The actual yield of beans in all categories Ukraine significantly inferior biological.

• If potential yield varieties of beans exceed 2 t/Ha, in fact located within 1,7 t/Ha. In addition, in some years did not exceed 1 t/Ha.

• http://www.agro-business.com.ua/ekonomichnyi-gektar/3047-pryvablyvist-kvasoli.html

Overview. Dynamics of production beans in Ukraine

UHBDP

UHBDPУкраїнський проект бізнес-розвитку плодоовочівництва

Kakhovka, Ukraine, October 7, 2015

«BEANS WAY»FIRST phases

Sustainable development of small farms in Southern Ukraine

Creating a Service Cooperative as a collective of like-minded

Main objectives for the Project UHBDP• The Project UHBDP should create the opportunity to

develop the greatest possible number of small farms (SHF&MHF, from 2 to 50 hectares) to get more income every new year in particular region.

• The Project UHBDP helps to create and rooting new for the region efficient forms cooperation small producers of fresh fruits and vegetables - a new generation of Service Cooperatives.

• The Project UHBDP creates a successful example of small growers, followed by multiple repetition of the experience for other regions and other crops.

• The Project UHBDP creates the preconditions for the development of financial instruments for the development of both small growers and Service Cooperatives.

• The project should make an attempt to find new avenues for sales (export other direction, except for Russia and Europe) products with High Added Value.

UHBDP

Main objectives for small growers (SHF&MHF)• Small growers (SHF&MHF) are eager to find a crop

that allows them to stable every year get added value and not lose money.

• Small growers (SHF&MHF) looking for a culture that would be involved in the crop rotation and created ideal conditions for the cultivation of vegetables after harvesting of this crop.

• Small growers (SHF&MHF) looking for additional sources of funding (financial instruments) for use as working capital for agro inputs.

• Small growers (SHF&MHF) trying to find a permanent and stable markets for their products and be able to plan their family budget or their company.

• Small growers (SHF&MHF) looking to stay in a comfortable and easy to understand for themselves zone - growing area, not distracted by trade processes.

UHBDP

Assumptions for FIRST phases (climate & farming community):

• Kakhovka region has become vegetable growing epicenter of Ukraine.

• Over 50% of all open field vegetable drip irrigation is used in Kherson region where of Kakhovka is the pioneering growth driver

• Dry climate (average annual rainfall less than 400 mm), ideal soil types for vegetables and sustainable water availability for irrigation are exists

• The region has scaled in vegetable growing the past 10 years 8 times which 2010 represents an utilization of 24% of irrigated land availability

• Solid base of reliable farmers that are keen to develop ( «Chumak» 15 year experience, «Green Team» 5 year experience).

• All major agriculture input suppliers have their main offices in Kakhovka region which is proving strategic viability.

• The population of Kherson region (TOTAL) on 1 July 2015 amounted to 1065.0 thousand people, including in urban areas - 651.7 thousand people, rural - 413.3 thousand people.

• Approximate number of small farms in the Kherson region, the main source of income is the cultivation of vegetables

is estimated 60 000 households (SHF). UHBDP

Assumptions for FIRST phases (climate in relation to the cost):

UHBDP

Northern regions Southern regions

Yield less 2,2 MT/Ha

• Enough rain. No drip irrigation.

• You can not make additional fertilizer and anti-stress agents directly to the plant.

• The unstable weather during the harvest creates additional risks, and reduces the quality for storage.

• The fungicidal agents can be added only by leaf, and the main problems accumulate inside.

• Insufficient rainfall, drip irrigation needs

• Fertilizers, plant protection products (fungicides) and the anti-stress agent may be delivered directly to each plant.• Dry weather during the harvest allows you to get the beans with the required humidity value.

• Bean pod needs further treatment to avoid the early disclosure.

cost price up

cost price down cost price up

cost price up

cost price up

cost price down

cost price down

cost price up

Assumptions for FIRST phases (growers):

• grow crops, which each year produces high added value and provided the requirements of the export specification leaves the country. This culture does not generate a crisis of overproduction because of the need the high cost of manual labor and relatively low yields (unattractive to large farmers and agricultural holdings).

• gets an ideal precursor for vegetable crops, which restores the balance of nitrogen in the soil.

• at relatively low investment in the cultivation generates income to grow steadily the household in general.

UHBDP

With the ability to sell the beans to the export market small farmers gain:

Assumptions for FIRST phases (product):• Beans - traditional crop for Ukraine. • Small growers (SHF&MHF) do not feel fear for a new culture

and do not engage in cultivation due to lack of a market strategy (e.g. export deliveries).

• At this point in time the culture of growing uniform product to create export consignments is not widely used.

• The increase of Muslims among the European population (eg refugees from Syria) form additional opportunities for the development of exports of dry beans.

• Low investment in the cultivation of one hectare – at level 28 000 UAH (1120 USD)/per 1 Ha make this product available for growing small farmers (SHF&MHF) without much financial assistance.

• If the expected yield (worst case of drip irrigation) to 5 tons per hectare cost of beans in the rolls will be within 5.6 UAH\kg (`0.22 USD).

• Difficulties in harvesting and (important!!!) threshing - creating an opportunity for the creation of cooperatives (service cooperatives of the new generation).

• Beans refer to products with a high protein content at a low cost to the poor and is widely used for food in developing countries.

UHBDP

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Assumptions for beans for the export market

UHBDP

Ø soybeans (100g = 600-800 pcs)

Max 2,5 Ø soybeans Min 2,5 - Max 6,5 Ø soybeanshigh export opportunities100g = 600-400 pcs 100g = 350-150 pcs

The real situation with the harvest of beans for small farmers

UHBDPLabour productivity is 100 kg of dry beans after winnowing (shift - 4 men who have threshing)

Women to harvest beans in rolls (run-up) Men prepare rolls for threshing

Men threshed beans rolls Gathering beans in the bucket before winnowing

https://youtu.be/pczYaQ3db7U https://youtu.be/vvhZjvXbm8E

https://youtu.be/upi7l5Wa0Rk https://youtu.be/S4vsTxpwcb8

Assumptions for two ways of harvesting & threshing dry beans

UHBDP

Ø soybeansMax 2,5 Ø soybeans Min 2,5 - Max 12 Ø soybeans

Yield less 2,2 MT/Ha Yield more 2,2 MT/Ha

Mechanical harvesting with harvester directly into the hopper

mechanical sorting (loss of 5-11%) mechanical sorting (loss of 2-3%)

product with high added value

Picking of rolls in the trailer Thrashing roll on a special threshing drum

of less than 300 rpm

Assumptions for fixed assets owned by the cooperative

UHBDPhttp://store.farmstart.ca/blogs/farmerreviews/12062361-growing-grains-dried-beans-on-small-farms-5-tools-to-buy-if-you-can-t-buy-everything-by-simon-jacques

pick-up rollers thresher for dry beans

devices for treatment against pests grain storage for dry beans (optional)

Assumptions for Coop triggers for creating (by Alexandra Garmash)

UHBDPhttps://meda.sharepoint.com/Contracts/1064/_layouts/15/Lightbox.aspx?url=https%3A%2F%2Fmeda.sharepoint.com%2FContracts%2F1064%2FShared%2520Documents%2FCoop%2520triggers%2520for%2520creating.png

SHF&MSF

SHF&MSF

SHF&MSF

SHF&MSF

SHF&MSFLEAD

Farmer ORcooperative

UHBDPgoods

Commercial Aggregator

commodity money ($)

goods

goods

goods

goods

Commercial Activity zoneDevelopment zone

Only growing zone

Kirill Novak

responsible person (side project)

*look for new products with

high added value

education and support

education and support

finan

cial

in

stru

men

ts

Assumptions for FIRST phases (commercial, for a trial period):

• for the first year of production, we can not fully appreciate the yield and costs level.

• for small farms, using their own labor and traditional fertilizer, we can not fully calculate the costs

• value GM 40% for SHF is sufficiently high, but requires additional knowledge of this product

UHBDP

0,226 $

0,15 $

0,10 $

0,224 $

cost of

Growing(yield 4 or 8 MT)

added ValueSHF

1 kg

gross income Cooperative

gross income Aggregator

average price for export (split) - 700 $/MT EXW

basic model

see Appendix

Assumptions for FIRST phases (EXPECTED RESULT):

UHBDP

1 year 2 year 3 year 4 year 5 year 6 year Participating SHF number 60 150 300 1000 3000 2500

Average size of beans plot Ha 1.5 2 2 1.3 1 2The total beans area Ha 90 300 600 1300 3000 5000

Cost of growing 1 ha of beans USD\Ha 900 900 900 900 900 900Yield (plan) MT\Ha 4 5 6 6 7 6

Expected sale price for the farmer USD\MT 376 400 400 420 420 400Gross yield MT 360 1500 3600 7800 21000 30000

Gross turnover SHF kUSD 135.36 600 1440 3276 8820 12000Gross income SHF kUSD 54.36 330 900 2106 6120 7500

Gross margin % 40% 55% 63% 64% 69% 63%

1 year 2 year 3 year 4 year 5 year 6 year

40%

55%63% 64%

69%63%

Development Project "Beans". First phase Gross margin SHF, %.

%

Assumptions for FIRST phases (EXPECTED RESULT):

UHBDP

1 year 2 year 3 year 4 year 5 year 6 year60 150 300

1000

3000

2500

Development Project "Beans". First phase . Numbers of SHF

Par

ticip

ating

SH

F

1 year 2 year 3 year 4 year 5 year 6 year0

2000400060008000

100001200014000

Development Project "Beans". First phase Gross turnover SHF & Gross income SHF

Gross turnover SHF Gross income SHF Linear (Gross income SHF)

kUSD

UHBDPУкраїнський проект бізнес-розвитку плодоовочівництва

Kakhovka, Ukraine October 26, 2015

Creating a Service Cooperative as a collective of like-minded

«BEANS WAY»SECOND phases

Sustainable development of small farms in Southern Ukraine

Lima Beans (unshelled)

Assumptions for SECOND phases :

• Fresh beans - a more attractive product for export. • Sale price at the conditions EXW could reach more than $ 4 per 1

kg with a relatively small change in the cost of growing and harvesting.

• This stage requires a higher level of preparation infrastructure.• Requirements for products can be found at the link http://

www.oecd.org/tad/code/46591391.pdf

UHBDP

SHF&MSF

LEAD farmer

UHBDP

Commercial Aggregator

Commod

ity

- mon

ey ($

)

goodsgoods

goods

goods

Commercial Activity zoneDevelopment zone

Only growing Zone (a great number of

adequate and loyal producers)

responsible person (side project)

Processor&

Packer (Brand)

SHF&MSF

SHF&MSF

goodsGrowers seedlings

Buyer or export

*look for new products with

high added value

education and support

finan

cial

in

stru

men

tsAgronomist education and professional support

IL

Appendix 1. Dry Beans. Costing (Plan for 1 Ha)

UHBDP

Section expensesUsage per

1 ha

Usage, unit of

measure

Cost per 1 unit of

meas., UAH incl.VAT

Cost per 1 unit of

meas., USD incl.VAT

Total cost, UAH

incl.VAT

Total cost, USD incl.VAT

Usage per 1 ha

Total cost, USD incl.VAT

Tillage, autumn (depending on the predecessor)Peeled, 1 pass-6-8 cm, 2 pass -8-12 cm 300 12 0Disking, 1 pass - 8-10 cm 300 12 22Deep autumn plowing of 20-22 cm (25-30 cm after maize) 600 24 24Tillage, springCultivation, harrowing, leveling (interim) 8-10 cm 1,000 40 24Presowing cultivation at planting depth (5 cm?) 300 12 24Bean seeds, for 1 Ha 230 kg 28 1 6,325 253 120 kg 164Seed treatment (fungicide + rizotorfina) 0Sowing with harrowing 1,300 52 50

AGROINPUTSLayflet, m (scheme 60+15-20 ) 100 m 83 3.300 1,650 66Drip tape, m 11110 m 1.1 0.043 11,943 478Herbicidal treatment 102.8Stomp 3 liter 258 10 774 31Bazagran 0.8 liter 345 14 276 11Watering (normal) 2500 cub.m. 1.5 0.1 3,750 150Fungicidal treatment 4,000 160 32Insecticidal treatment 3,400 136 52Feeding 100Nitrogen 0.3 tons 8,500 340 2,550 102 90phosphorus 0.1 tons 6,000 240 600 24 26potassium 0.15 tons 20,000 800 3,000 120 65Antistress preparations 1,875 75 75Processing against the disclosure of the pod ("glue") 3 liter 90 4 270 11 11Desiccation 3 liter 359 14 1,076 43 43Total 35,664 1,427 45,289 1,812 904.8Yields, MT\Ha (plan) 8 4Planned cost of 1 MT 226.44597 226.2

Northern regions

33

Thank you!!!