| I recall the surprised, unbelieving, and then happy, faces of farmers who had already grown accustomed to 50% of the crop loss, and then within a few months, they found that it was possible otherwise. Summer is coming and the fruiting season is here. Once again, there will be countries where the fruits will grow, ripen, harvest, marketed, and often exported to leading international markets. In those successful countries, farmers will be smiling and are proudly part of the Middle Class. This is the case in a minority of the fruit growing countries, especially tropical ones. However, in most countries, fruit growers suffer poverty and sometimes-even hunger. This is even when they grow the same crops! The big question is, therefore – WHY? In last week's manifesto, I described The Enormous Opportunity And Risk] For Fresh Fruit Growers (link). However, to seize the Opportunities a country first need to meet the basic requirement to take advantage of the coming Opportunities. Think, why some countries can charge taxes from fruit growers who earn a good living, while others have to support them financially just to survive the day? SIMULATION OF 2 ALTERNATIVES To analyze the reasons that lead to the huge differences between fruit growers in different countries, we will simulate an imaginary country with 10,000 hectares of commercial mango plantations. This will be our Production Unit. Such a Production Unit requires investments in planting, treatment, inputs, research, mechanization, logistics, training, etc. At the same time, it constitutes a magnitude that can contribute significantly to the country's economy. Our economic simulation will consider two types of countries –
Unsuccessful and Successful. To measure the economic impact we summarize the components that create Positive impacts (in Green) and reduce from it components that create a Negative impact (in Red). For example, income to farmers or related industries and service providers created thanks to growing and marketing mango, direct or non-direct investments related to the mango industry, academic research, and extension service, are considered as Positive Impacts. At the same time, reluctant to invest, poverty, shortage of raw material for related industries, chemical residues and farmers' morbidity due to use of sprays, government support, lack of foreign currency (if there is no export), and even damage to the state's image, etc., are considered as Negative Impacts. For the sake of simplicity in presenting complex information, I will use rough figures to indicate trends, and I will ignore some accounting principles. I ask your forgiveness and understanding of the reason for doing this. For illustration purposes only, recent data relating to Avocado and Mango growers in Kenya is attached. Note that these figures represent over 90% of the fruit-producing countries. Feel free to use the below example and template with adjusted numbers suitable for your country. UNSUCCESSFUL ALTERNATIVE Facts • Yield per hectare – 5 tons • Price in Local markets – 0.3 $/Kg • Price in Export markets – 0.6$/Kg. No export (or limited). Potential annual income per 10,000 Ha. – $ 15M (100% marketed locally) Current State • Low yield per hectare. • Low quality. • Crop loss (before marketing, due to fruit flies) - 30% to 100%. • Extensive use of (chemical) sprays. • The local market is limited in size, capacity, and price. • Limitations in the ability to produce added value. • Lack of broad national support infrastructure–research studies, laboratories, nurseries, professional extension services, packaging houses, logistics, cold chain, marketing, investments, etc. Economic Impact • Low income per hectare –250$ Actual annual income per10,000 Ha – $ 2.5M Other Impacts: investments, expenses, losses, and non-refundable investments -
• Farmers' expenses on outputs and labor - $ 2M • Chemical residues in fruits and environment - $ 100K • Crop protection: increased use of pesticides - $ 100K • Farmers' loss of income and erosion of profits - $ 100K • Government support of fruit growers (projects, etc.) - $ 0.5M • Poverty is perpetuated - $ 100K • Morbidity and poisoning among farmers - $ 100K • Reluctance of stakeholders (farmers, state, investors, etc.) to invest - $ 200K • Related industries - underdeveloped and suffering from raw material low quality or shortages and erosion of profitability - $ 200K • An increasing need for financial support of fruit growers - $ 100K • Low food production and the occasional need to import - $ 100K • Undeveloped academic research and extension services(affected by the low economic impact of the industry) - $ 100K. • Lack of foreign currency (no-export) - $ 100K • Damage to the state's image (inability to export reflects on the state) - $ 100K • Investments in 'local solutions', e.g. packing-house/juice factory, goes down the drain - $ 100K • Increasing state loans - $ 100K Annual expenses, losses, and non-refundable investments- $ 4.1M (note the overall Negative impact of the above components) Financial Balance To calculate the actual economic value of a Mango Production Unit for the state economy, we sum the Actual Income, plus the Negative impacts, plus the Positive ones. $ 2.5M+ (- 4.1M) = - $ 1.6M Note that under the Unsuccessful Alternative scenario the country's economy is losing about $ 1.6M for every Production Unit of 10K Ha. of mango plantations. Meaning, the Mango industry is creating a Negative Value at the state level. Root Cause Root Cause encapsulates Why the problems accrue in the first place. Root Cause could be a technical problem, leading to business problems, creating existential problems. In the Unsuccessful Alternative scenario, the Root Cause is a technical problem of inability to effectively control fruit flies, according to the required international standards and regulations. That leads to a business problem; 50% yield loss and inability to export, which lead to existential problems; the inability of the country to keep its economic development and its need to continuously support fruit growers. | 
