Floriculture is an important industry in many nations,
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1 SOUTH AMERICA Cooperative Flower Production and Marketing in Paraguay By Dr. Hsieh Sun-ching, ICDF senior advisor Floriculture is an important industry in many nations, and can be an ideal area of prosperous economic development. The industry, typically comprised of many small and medium industries and a handful of larger producers, yields high-value products and can revive declining agricultural sectors. In Taiwan, total flower sales between 1986 and 1999 increased from US$74 million to US$314 million, while export value increased from US$3.7 million to US$42.7 million (Republic of China Government Information Office). In the United States, floriculture industry sales reached $4.6 billion in 2000, with the majority of floriculture products sold by just over 9,000 small growers with approximately five employees each (United States Department of Agriculture). In addition to producing floriculture products for export and domestic sales, floriculture industry facilities and displays are popular tourist destinations. Taiwan has long been a major producer of floriculture products (the nation is a leader in orchid development) and the ICDF has capitalized on this expertise by launching floriculture development projects in Bahrain, Costa Rica, Guatemala and Paraguay. Many different floriculture products have been produced: bedding and garden plants, potted flowering plants, cut flowers, fruit trees, decorative greens and leafy flowers. In these projects, new flower varieties and tissue culture techniques have been developed, seedling centers and greenhouses have been constructed, farmers have been organized and sales channels have been created. Farmer Production Marketing Teams are key elements of all ICDF floriculture projects. After farmers are trained in various growing techniques and introduced to the potential of the floriculture industry, they are formed into cooperative teams, based on geographic proximity and common farming interests and approaches. A portion of their profits are placed in joint funds that are used to further develop their skills, purchase tools and tissue-culture technology, and generate new business opportunities. The following article is adapted from a field report about ICDF floriculture work in Paraguay written by ICDF senior advisor Dr. Hsieh Sun-ching, an agricultural scientist at Taiwan s National Pingtung University of Science and Technology. After extensive floriculture development, the creation of dozens of Production Marketing Teams, many educational and 28 International Cooperation & Development
2 promotional activities, and the construction of floral exposition centers and markets, there is great potential to develop the domestic and export flower industries in Paraguay, writes Dr. Hsieh. Cooperative Flower Production and Marketing in Paraguay Paraguay is a landlocked nation in the middle of South America, with a population of 5,734,139 (2001). The Paraña River splits the country into eastern and western regions. The eastern region is a rolling plateau where soybean, maize, cotton, rice and tropical fruits are grown. The western region, a grassland array, has distinct dry and wet seasons. Nearly 95 percent of the population lives in the eastern region, which receives more precipitation than the west. Forty-five percent of Paraguay s total labor force works in agriculture. Taiwan began its floriculture work in Paraguay in 1981, with the establishment of the Flower Culture and Demonstration Farm in San Lorenzo City. In order to expand its research and activities, the farm was moved to Paraguay s National Agricultural Research Institute (NARI) at Caacupe in Caacupe has since become the hub of ICDF floriculture work in Paraguay. During the 1990s a new tissue culture laboratory was built on the NARI campus, with financial support from Taiwan and the Republic of Korea. Dr. Tsay Hsinsheng, head of the Tissue Culture Laboratory of the National Taiwan Agricultural Research Institute, directs the laboratory. In 1995 an onsite Flower Development and Training Center equipped with laboratories, classrooms, greenhouses and a five-hectare demonstration farm was completed. The center has successfully introduced many species of orchids from Taiwan, which have been sold not only in domestic markets in Paraguay, but also exported to neighboring countries. Scientists and technicians at these facilities perform necessary experiments, and then, working with Agricultural Demonstration Centers built in villages throughout the country in the 1980s and other institutions, successful cultivars are distributed to farmers. Also in Caacupe, large-scale flower production specialized zones, modeled on the Changhua and Yenlin flower production centers in Taiwan, were created to foster floriculture production. The Technical Mission began its current phase of floriculture industry development in Paraguay in At that time, different orchid varieties were introduced from Taiwan. Most introduced orchid varieties performed quite well under greenhouse conditions in Paraguay, and 29 out of 40 were selected for development. The project started auspiciously, but some problems were encountered, which had to be tackled by Technical Mission experts working in conjunction with Taiwanese and Paraguayan scientists and technicians. Controlling flowering time is essential in floriculture in order to steadily supply orchids to the market during high and low seasons. In Paraguay, buds of developing orchids were first initiated during the autumn/winter period (May-July), which resulted in concentrated production of flowers from August-October (late winter-spring). The price of orchids fell because of abundant production during this period. Realizing that modifying flowering time would enable farmers to supply off-season orchids to the market and reap greater profits, Technical Mission specialists devised a method to prolong and control International Cooperation & Development 29
3 blossoming. From August-September they cut off the developing orchid stalks, leaving 1-2 auxiliary buds on the base of the stalks. They then placed the plants in lower temperature conditions, where the treated plants developed a secondary stalk from the base of the cut primary stalk. In this way, the flowering time of orchids could be delayed for 2-3 months. This technique allowed farmers to produce flowers yearround, ensuring good prices. In fact, a three-year analysis of costs and returns showed that farmers were realizing 171 percent returns on their initial costs for orchid cultivation, which was significantly more profitable than other varieties of flowers (which nonetheless realized good rates of return). The ingenious Technical Mission specialists also devised a method to forecast the flowering time of each plant, based on the length of the developing stalks. They observed that the growth of stalks is initially slow, but that after days the growth increases to a rate of one centimeter a day. Stalks reach their maximum length in days, and cease growing after flowers blossom. Based on these findings, they forecast the flowering time of given orchids. For example, when orchid stalks were 1-5 centimeters long, they knew they would flower 60 days later; when they were 6-10 centimeters long, 50 days later; centimeters long, 40 days later; and centimeters long, 30 days later. With this information, the specialists provided producers with information that enabled them to precisely predict the amount of flowers that could be harvested and shipped to market. Application of these techniques to regulate and forecast flowering time enabled farmers to earn better profits. Paraguayan flower farmers receive a range of training from the ICDF, NARI and the other institutions. Classes have been organized in fertilization, pest control, growth regulation, irrigation and post-harvest treatment. In addition to classroom training, field days are organized to demonstrate production technologies. Table 1. Seedlings propagated in the NARI Flower Development and Training Center Type No. of plants Herbaceous (leafy) 32,775 flowers Ornamental plants 7,174 Cut flowers 1,918 Fruit trees 2,277 Orchids 36,155 Total 80,299 Paraguayan growers are now producing many varieties of orchids and other ornamental plants for sale. Favorites have included Oncidium (Dancing Lady), Dendrobium (a lovely flower that has attracted many buyers), Paphiopedilum (Lady Slipper, which gets its name from its delicate shape), Cymbidium Alliance (with beautiful aromatic flowers), Cattleya Alliance (a South American variety, currently the most popular cultivated orchid in Paraguay), Anthurium, chrysanthemum, lily, rose, and various leafy flowers and ornamental plants. A partial list of seedlings propagated in the NARI Flower Development and Training Center in is included in Table 1 above. Organization of Production Marketing Teams After a sturdy training foundation had been laid and flowers were being produced, the ICDF Technical Mission laid plans for an integrated system of flower production and marketing in Paraguay the ICDF s preferred Production Marketing Team (PMT) model. Farmers who successfully complete training are eligible to apply for membership to PMTs. The applicant must own land and other farming facilities, and fully participate in PMT activities. The ICDF Technical Mission built three Production and Marketing Centers, 30 International Cooperation & Development
4 and 134 farmers were organized into 17 PMTs. ICDF micro-loans were extended to farmers, providing capital for growth and investment. Some PMTs focus on production and marketing of different flowers, including orchids, roses, gladiolus, sunflowers, grassy flowers and ornamental plants. Other teams produce flower seedlings to supply to farmers. The members of the teams are mostly year-old men, with education levels ranging from primary school to the university level. The PMT system has been extended to Caacupe, Atyla, Tohati, and Altos in Paraguay s Cordillera Province, and Asuncion, Itague, San Lorenzo and the Aregua region in the Central Province. The Technical Mission conducts all PMT planning. A PMT Committee has been organized, with members from each PMT, as well as invited technical and marketing experts. Committee meetings are normally held once a month. Technical Mission Chief Fu Weiko and government officials are present at every meeting, to provide advice about technical and financial issues. Each PMT holds a meeting once per week, chaired by the team leader. Technical Mission Specialist Lan Tao and other experts from the Technical Mission attend the meetings to help solve technical, farming and production problems. Establishment of a Modern Flower Marketing System Efficient marketing of agricultural products is a key to gaining maximum farm profits. Which commodities to sell, where to sell them, whether to sell them directly to consumers or through intermediate dealers, and how the commodities will be transported to the market are all important concerns. As Paraguayan farmers achieved higher levels of production and expertise, and prepared to increase domestic sales and exports, Tao and Chief Fu planned and then established a direct floriculture marketing system. First, Fu visited several local shopping centers to investigate the possibility of setting up a fixed marketplace where farmers could sell their flowers. In June 1999, working with local government, businesses and media, Fu succeeded in setting up a Flower Market at the Mcal Lopez Shopping Center in Paraguay s capital, Asuncion. The manager of the center agreed to let farmers use its parking lot as a market on Wednesday of every week. Produced flowers are collected and sent to the flower market, where they are sold in booths run by PMTs. The Wednesday Flower Market has provided an excellent venue for direct flower sales, and has been doing a brisk business since operations began. Flower expositions have also been held at the shopping center, attracting thousands of visitors. According to PMT records, each team can earn a total of one million Guaranies (US$ 286) from Wednesday sales each week. Each farmer can earn 39,564 Guaranies, which is times higher than the labor wages they previously earned per day. Monthly income from the first seven months of sales at the Wednesday Flower Market at Mcal Lopez Shopping Center is included in Table 2, below. Table monthly income from the Wednesday Flower Market at Mcal Lopez Shopping Center Month Total income (US$) June 2,859 July 7,428 August 6,570 September 12,582 October 6,286 November 6,000 December 2,572 Robust sales and a growing number of PMTs indicated that establishing an additional flower market would be desirable. Caacupe in the Cordillera Province was deemed an ideal location for a floral market and exposition center. Millions of Catholics visit the sacred International Cooperation & Development 31
5 Technicians at Paraguay s National Agricultural Research Institute Tissue Culture Laboratory. places in the city in December, each worshipping with a bundle of flowers in hand. Caacupe is also situated at the midway point of the busiest highway in Paraguay, and many travelers rest in the city. Additionally, although Caacupe is a traditional area of flower production, the metropolis had no fixed flower market. After consultation with provincial government officials, the ICDF Technical Mission set up a trial flower market in Caacupe. It was extended because of excellent sales, and the provincial government and the ICDF then approved a permanent flower-marketing center, with a budget of US$250,000. The ICDF s Fu designed the center, which was opened on April 8, 2000, with Paraguay President Luis Gonzalez Macchi in attendance. The booming Caacupe flower expo market has enabled the creation of a revolving fund established especially for this project. The fund is used to pay expenses to run the market and for loans to farmers for farm investments. Conclusion Demand for decorative flowers has increased steadily in recent years, and it has become clear that floriculture is an excellent industry propelling economic development. The ICDF is capitalizing on these trends by encouraging floriculture development in several of the countries it works in, particularly in Latin and South America. Floriculture Production Marketing Teams organized by the ICDF in Paraguay are functioning well, and improved methods (such as a central information clearinghouse for farmers) and extension into new areas are projected. Continued research to improve cultural practices and farm management is planned, and enhanced production of seeds and seedlings is helping farmers meet increased demand. Active exploration of foreign markets is expected to increase export opportunities. Floriculture is now well established in Paraguay. With its fertile land, favorable climatic conditions, excellent technology, thriving production and marketing systems, and hardworking farmers, Paraguay s flower industry is moving in the right direction. It is anticipated that with continued cooperation between local, provincial and national governments and the ICDF, the flower industry in Paraguay will have a very bright future indeed. 32 International Cooperation & Development
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