Analyzing Quality

Constraints in

Sri Lankan Cinnamon

Value Chain

Dilani Hirimuthugodage

Outline

• Objectives of the study

• Methodology & Data analysis

• Overview of the cinnamon industry

• Cinnamon value chain

• Quality standards: product and process

• Quality constraints in each value chain level

• Recommendations

Objectives of the study

• Identify levels, actors, functions and relationships in the cinnamon value chain

• Identify and map cinnamon value chain

• Identify product and process quality standards

• Identify specific quality constraints in each levels of the value chain

• To provide recommendations to improve quality of the products at each levels

Methodology and Data analysis

• Focus Group Discussions (FGDs) with small and medium scale producers and collectors in Galle and Matara districts – using a FGD guide

• Key Informant Interviews (KIIs) with exporters, wholesalers, village collectors, government officials in ITI, SLSI, Department of Export Agriculture, MPI, etc. –using a KII guide

• Short questionnaire survey amongst producers and collectors

• Desk Research : existing literature was reviewed on cinnamon industry in Sri Lanka

Methodology and Data analysis

Data Analysis

• All the discussions/interviews were digitally audio-recorded

• Content analysis was used for analyzing qualitative data using NVivo-10 software

• Quantitative analysis of survey data collected was done in excel spread sheet analysis

• Qualitative and quantitative analysis used for mapping of actors, their functions and relationships and to identify quality constraints

Overview of the cinnamon industry

Overview of the cinnamon industry cont..

Exports of Spices -2015 Cinnamon Exporting Countries -2015

Overview of the cinnamon industry cont..

Overview of the cinnamon industry cont..

30 % of the Overall world cinnamon market

(Indonesia, China, Vietnam)

Emerging true cinnamon markets : Seychelles,

Madagascar

90 % of the true cinnamon

Cinnamon value chain ACTIVITIES STAKEHOLDERS SUPPORTING

Cultivation/

Production

Collection

Wholesale

Processing/

Exporting

Retailing

Input Supply

Smallholders/Medium

Scale

Large Plantations

(RPCs)

Town Level / CMB/ Collecting

Centers

Village Level Collectors

Processors / Exporters

Inputs

Domestic

Market/Hotels,

Restaurants, Boutique

International

Markets

MPI

DEA

Private

Sector

Farmer

Org.

Spice

Council

CTA SAPPTA

SLSI

ITI

EDB

Product and process standards

Product Standards

Sri Lanka Standard Specification for Ceylon

Cinnamon – SLS 81 : 2010

Process Standards

GAP

GMP

ISO 22000:2005

HACCP

Product standards • Sri Lanka Standard Specification for Ceylon Cinnamon – SLS 81 : 2010

Commercial designation of grades and qualities

Diameter of quills

Max mm

Number of whole

quills (1050mm)

per kg min

Extent of foxing1 % max 2

Minimum length of quills in a

bale mm

Pieces of tube and broken

pieces of the same quality per bale max

% (m/m)

Alba 6 45 Nil 200 1

Continental C 0000special

C 00000 C 0000 C 000

C 0

6

10 13 16 17 19

35 31 24 22 20 18

10 10 10 15 20 25

200

1

Mexican M 00000special

M 00000 M 0000

16 16 16

22 22 18

50 60 60

200

2

Hamburg H 1 H 2 H 3

23 25 38

| 11 9 7

25 40 60

150

3

• Classification for quills (ISO 6535:1997) (SLS 81:2000)

• Quills are graded on the basis of the diameter of the quill and the level of foxing.

Source : ISO 6535:1997(SLS 81:2000)

• GAP

Production and farm level approaches to ensure the safety of fresh produce

for human consumption

• ISO 22000:2005 –

It specifies the requirements an organizations food safety management system has to meet

To obtain ISO 22000:2005 the company has to demonstrate its ability to control food safety

hazards

• HACCP –

HACCP stands for 'Hazard Analysis and Critical Control Points'

HACCP is a food safety management system based on 7 principles to ensure that

potential hazardous products do not reach the end customer

• GMP Certified Company –

GMP stands for 'Good Manufacturing Process'

Process standards

Quality constraints in cinnamon industry

At producer level

34.21

31.58

2.37

15.79

Land Extent-Cinnamon Cultivation

<2

2 to 5

5 to 10

10 to 50

27.1

0.0

2.1

66.7

4.2

Input Suppliers

Government

Exporters

Collectors

Sales Center

Other

At producer level

Main buyers at producer level Buyers main requirements

At producer level

• Tendency towards in making coarse grades except fine grades

– Insufficient skilled labor (peelers)

– High labor cost

– No price differences

• Lack of proper production infrastructure and technology

– No separate processing place (in-house)

– No use of an uniform, cap etc…

At producer level

• Use of traditional methods for processing

– Use of primitive equipments (ko-keththa)

• Lack of storage facilities

• Lack of awareness of quality standards

At collector level

• Lack of awareness of international standards and specification

– Less concern to assure the quality

– Use very primary tools to measure quality (only

moisture meter)

• Poor hygienic, sanitary in storage and transport facilities

• High competition amongst collectors

– Tendency towards collect less quality products

At exporter level

• Finding quality products is the main constraint

– Limited linkages with producers, depend on collectors

– Collectors provide bales which are a mix of several grades

• High cost of obtaining and maintaining standard certificates

– Renewal of certificates in every three years

• Lack of interest on international buyers

– More than 50 % goes to Mexio as cuts/bales

Recommendations

At producer level

•Conduct awareness programmes on the importance of meeting quality standards •Introduce techniques, methods or equipment to make peeling, rolling and quilling job easy •Attract new labour and provide proper training on quality standards •Provide stable farm-gate prices (guaranteed price scheme as in paddy)

Pro

mo

te makin

g fine grad

es

At producer level

•Disseminate newly developed technologies to grass root level producers •Extend government subsidy on “in-house processing sheds” to less than 5 acres plantations •Establish central processing units •Promote organic fertilizer and encourage producers using organic fertilizer and also promote adoption of Good Agriculture Practices (GAP) for cinnamon

Imp

rove p

rod

uctio

n

infrastru

cture an

d

techn

olo

gy

At collector level

• Promote sound storage and transport system for cinnamon. Warehouse should be a covered premise, well protected from rain, sun and excessive heat

• Strengthen and introduce new technologies for quality assurance and improvement of cinnamon

• Make them aware on collecting quality products

• Introduce a support scheme to cinnamon collectors

Imp

rove in

frastructu

re facilities an

d aw

areness

At exporter level

• Develop appropriate methods and technology programs for processing

• Make linkages with producers

• Conduct market research to identify new markets and expand existing markets for cinnamon

• Provide intensive scheme for exporters who wish to achieve quality standards

Imp

rove in

frastructu

re facilities an

d assu

re qu

ality in

pro

du

cts

Thank You…