FAO Regional Office for Europe and Central Asia

Tajikistan’s fresh produce supply chains grow more efficient, profitable

Fruit and vegetables are a major source of income for rural households in mountainous Tajikistan – and essential for healthy diets. Fresh produce such as sweet cherries, onions and table grapes make up an important share of the country’s agricultural exports.

The potential to supply domestic retail and export markets remains largely untapped, but with help from FAO and the European Bank for Reconstruction and Development, Tajikistan aims to change that.

Last month, FAO and the EBRD organized three seminars in Tajikistan on strengthening the country’s fresh fruit and vegetable supply chains and broadening market opportunities.

Held in the capital Dushanbe and in the regional hubs of Khujand and Qurghonteppa, the seminars gathered government officials and key players from the country’s fruit and vegetable sector including local producers, traders and retailers. The events were part of a larger joint technical assistance project of FAO and EBRD on improving fresh produce value chains in Tajikistan and Moldova.

Panellists discussed findings from an FAO-EBRD value chain analysis. They shared market knowledge and technical know-how – from more efficient handling, storage and packaging practices, to trends in regional and global trade of fresh produce.

During the seminar in Dushanbe, a business-to-business or B2B trade forum brought together Tajik suppliers, exporters, local retailers and Russian and Ukrainian importers and retailers to discuss business opportunities.

Annual fruit and vegetable exports in neighbouring Uzbekistan pull in up to US$ 0.5 billion, while Tajikistan’s exports earn only about 10 percent of that amount, and continue to slide.

Inefficiency along the supply chains means that the availability and selection of fresh fruit and vegetables vary greatly, depending on the season.

Tajikistan has few cold storage facilities, and heavy snowfall during the winter often closes the roads connecting the capital with major producing areas. A large part of the food sold in Dushanbe is imported, and prices are high.

Lack of information – about markets, new technologies and techniques – is another big challenge for Tajik producers.

Outdated production, handling and packing practices lead to greater spoilage and decrease the value of their produce. Tajik producers, for example, use packaging that is costly and not adapted to the needs of modern retailers such as supermarket chains, said FAO economist Andriy Yarmak.

Improved techniques
“To export, most local producers make boxes from imported wood which they use to pack and send unsorted fresh fruit and vegetables to Russia, where they can only be sold in open-air markets and at very low prices,” Yarmak said. Open-air markets are in rapid decline in Russia, where supermarkets are gaining a greater share of the market.

Fresh produce experts and leading market players from abroad stressed the importance of grading and sorting produce, storing it properly and using modern packaging. In this area, other operators have introduced lighter cardboard boxes, which cost less than wood and can withstand up to 5,000 km of travel on bad roads.

Unlike the wooden crates, these cardboard boxes can be sold by supermarket chains to recyclers.

“For local trade, we advised producers to use an even more cost-effective solution. They can procure durable plastic crates that fold and can stand up to 250 cycles,” Yarmak said. “These crates help reduce losses while also making the produce look more appealing to retailers.”

Modern food retail
With EBRD’s support, Tajikistan saw its first hypermarket – an Auchan – open in Dushanbe last June.

“Moving from open-air food markets to more modern retail formats will help boost the local economy and create business opportunities,” said Richard Jones, head of the EBRD Resident Office in Tajikistan. “Tajik suppliers will be able to link up to more predictable buyers, such as Auchan and other supermarket chains, and retailers will be able to source locally produced food more efficiently.”

Consumers will also benefit from a stronger fresh fruit and vegetable value chain as they will be able to access more affordable fresh produce, with higher quality and safety standards.

Export opportunities
Thanks to its diverse climate and relative proximity, Tajikistan has all the potential to supply regions with colder climates, such as Russia’s Volga, Ural and Siberia regions, offering a huge variety of high-quality fresh fruit and vegetables at competitive prices.

Tajik producer Azalshokh Mardonov, head of the Amirshokh 2008 Dekhan Farm, said he appreciated speaking directly with decision-makers from Russian, Ukrainian and local retail chains during the B2B forum, bypassing the intermediaries “who usually come to our farms to buy produce at low prices.”

“I just invested in a 70-tonne storage facility, so for me these contacts and the practical advice on storage, packaging, post-harvest handling and marketing come at the right time,” he said.

4 November 2016, Budapest, Hungary