Post-harvest Loss is an Important Factor for Lowering Profitability in an Agribusiness or Agro-Industry

During diagnosis of an existing value chain, it is an essential task to analyze the key aspects of the material flow under the chain. As the material flow of an agricultural or agro-industrial value chain closely relates to some important factors like production cost, postharvest loss, standard & quality of the finished product, it requires to develop a relationship among these factors and the profitability or value addition level at all stages under the chain. A study has been conducted recently in Western Afghanistan under ‘Promoting Value Chain-Western Afghanistan Project’ being implemented by FAO-Afghanistan that focused on the material flow behavior in analyzing value chains for saffron, grape (and raisin), pistachio, watermelon seed, jujube and wheat. To contribute to assessment of the material flow behavior for the value chain actors throughout the supply chain, the study developed a profitability as well as postharvest loss assessment tool using Microsoft Excel based on the as usual method for profitability analysis of a small scale business or agro-industry incorporating material balance, postharvest loss and moisture content issues. The tool has been used under the study to assess the profit margin alternatively added value, final product recovery rate as the indicator of the postharvest loss and moisture content level in the final product as an important quality attribute, prices and diverse cost elements for the agribusiness and agro-processing SMEs in relation to the selected crops. The validation workshop for the value chain study was held on 27th June 2018 in the Auditorium of the Provincial Agriculture, Irrigation and Livestock, Herat, Afghanistan. Stakeholders from diverse disciplines attended the workshop and contributed to validate the data achieved from survey, KII and FGD.

The Profitability and Postharvest Loss Analyzing Tool may be used in performing the following activities:

i. Assessment of profitability of an agribusiness

ii. Assessment of postharvest loss using the value of recovery rate in a system

iii. Checking the effect of excessive loss of moisture in final product on the yield, quality and profitability of an agro-processing system 

iv. Use in upgrading a value chain through application of appropriate interventions

v. Monitoring a value chain at its development stages in assessing the changes in profitability and postharvest loss levels due to the effect of applying interventions

vi. Helping the agro-processors in predicting the yield of finished products as well as profitability controlling the postharvest loss and moisture content level of the raw commodities and the final products and also in many other purposes.