Cesar Flores

Agribusiness Development Specialist East-West Management Institute 575 Madison Ave 25th Floor New York, NY 10022

Phone: 212-843-7660 Fax: 212-843-1485

E-mail: cesarflor@yahoo.com

A Livelihood Development Strategy for Earthquake Affected Pakistan

September 2006

Executive Summary
This report provides a business model for expanding the wild mushroom export industry in earthquake affected Pakistan. The existing export industry for the dried Morel mushroom has been long established and may form a base from which to diversify the sector into fresh Yellow Chanterelles, a completely unexploited variety at this time.

Diversify mushroom hunters into a new mushroom variety to increase their cash incomes. Strengthen and develop links in the wild mushroom supply chain to access international markets. Program Components Anticipated Results Target Community: Landless Potential Beneficiaries: 53% women and 47% men Intermediate Outcomes: 1. Train and organize gathering teams 2. Provide packaging and transport solutions 3. Strengthen or create export market linkages Livelihood Outlook: Cash income from fresh mushroom sales August – September every year

Wild Mushroom harvesting as a livelihood activity
Livelihood constraints in the region include:
• Rural communities are already maximizing natural resource exploitation of communal lands. Pressure on forests for grazing, cropland, timber and fuel wood are approaching unsustainable levels. Many of the most vulnerable live at the interface between agriculture and forest. Land for agricultural production is at a premium in the region. Many families are not reaching their subsistence needs even with fully planted fields and have no surplus land for cash crops. Tenant sharecropping is a historically persistent and common practice. Seasonal labor migration is unavoidable for most men. Women have few acceptable work opportunities.

Advantages of wild mushroom harvesting:
• • • • • • Land ownership or rental not required No inputs required for harvesting Cash earned daily near home in season Very high-value crop with a good margin for the collector Gender neutral livelihood activity Does not damage forest resources

Morel Mushrooms
International Market
Morel mushrooms (Morchella spp.) are the most valued wild mushroom variety in Western Europe, particularly in France, Germany, Italy and Switzerland. The international trade in dried Morels is estimated at 225 000 kilograms per year. Sources are Turkey, China, India, some Eastern European countries, and North America. Approximately 65 000 kilograms are exported annually from Pakistan, making it a major player in the international market.

Hunting and picking Morel mushrooms is performed by thousands of villagers in all the hill districts of Northwest Frontier Provinces (NWFP) and Azad Jammu Kashmir (AJK). A large number of villagers in the region are familiar with the morel variety and are extremely eager to find them, as they are by far the most valuable commodity they can sell. One estimate claims 289,000 individuals engage in morel mushroom hunting on a part-time basis, including 33% women, 27% men and 40% children. The Morel mushroom hunting season is March through July, and the peak is late April to early May.

Processing and Distribution
Processing is very simple and performed by the collectors in their homes. Fresh mushrooms are brushed gently to remove dirt and then hung as a garland to dry for 2 or 3 days, either in direct or indirect sunlight. Small grocery shops in the villages act as collection depots (photo 1), sometimes through barter arrangements. The shopkeepers sell to itinerant wholesale traders, who bring them to the exporters. Some collectors, (particularly in Swat, because they are closer), choose to sell directly to the exporters. There are only 4 primary exporters in Pakistan dealing with Morels, half of them located near the source regions in Mingora, Swat District: • • • • Rehman Traders, Mingora Hussein Fazal, Mingora Essa Jaffar and Co., Karachi Salman Traders, Islamabad

Photo 1. Dried Morel Mushrooms at a collection depot

Morel mushrooms are procured and priced in 4 quality grades. Prices also vary according to species. The average price paid to the collectors is 50 USD per kilo (fig. 1) in 2006. As a comparison, collectors in British Columbia, Canada were paid an average 92 USD per kilo. Average price: Collector Wholesaler Exporter Importer USD per kilo 50 166 216 330

Figure 1. Dried Morel mushroom price structure

This supply network is well established and functions smoothly. There are long standing relationships between participants. Storage and transport of the product is uncomplicated in its dried condition. A weakness in the harvest system is the tendency to pick before mushrooms are mature, due to the immediacy of realizing a profit by the collectors. The large number of people involved in collection limits total potential earnings for any one individual.

Yellow Chanterelle Mushrooms
International Market
The global trade in Yellow Chanterelle mushrooms (Cantharellus spp.) is much larger than the Morel trade. 200 000 metric tons are bought and sold annually worldwide. Volumes total between 1.25 and 1.4 billion USD every year. Germany is the largest chanterelle importer followed by France and other western European countries; the same destination markets as the Morel trade. The geographic range of Chanterelle is large. In addition to the supply from consumer countries, traditional suppliers include North America, Scandinavian countries, Poland, Lithuania, Belarus, Russia, Latvia, Romania, Bulgaria, Montenegro, and Turkey. Declining production, due to environmental pressure in Western Europe and increasing consumption is driving international networks to expand. The newest player is Africa, with chanterelles from Zimbabwe and Tanzania recently appearing in French markets. The critical difference between Morel and Chanterelle in the international market is that Chanterelle is traded fresh. Less than 5% of chanterelle imports are dried. Refrigerated, Chanterelle has a 3 – 4 week shelf life. It is anticipated that Morel exporters in Pakistan would have an interest in networking with their Morel buyers and diversifying into fresh Chanterelles.

Domestic Production
Chanterelle readily grows wild in the stands of softwood and Spruce forests typical of NWFP and AJK Pakistan (photo 2). Chanterelle is a Mycorrhizal fungi, coexisting with forest trees. The network of tree roots and mycelium increases the surface area through which trees can absorb water. The mycelium gets its nutrition from the tree. This symbiotic nature of the chanterelle life cycle is what prevents it from being commercially domesticated.

Chanterelle grows slowly relative to many other mushrooms and persists for an average 44 days and as long as 90 days. The season for collecting is August through October, peaking in September.

Photo 2. Wild Yellow Chanterelle growing in Pakistan upland forest

A field survey was conducted in August 2006 in upland forests in the Mansehra district of NWFP. The Yellow Chanterelle (Cantharellus Subcibarius or Clavatus?) was plentiful. 6 kilograms were easily collected by 4 persons in less than one hour (photo 3). The quality of mushroom was excellent, with good color and no parasite infestation.

Photo 3. Field survey – August 2006

Mushroom hunters in Pakistan do not currently collect or recognize Chanterelle. The collectors’ skill in Morel collection could be transferred to this new variety with some elementary training. The fresh market is more demanding than the dried, so collection would involve the following requirements for a marketable harvest: • • • • Clipping or cutting the stem instead of plucking, to ensure a clean product Carrying in open weave baskets in a single layer depth to prevent damage (Photo 4) Avoiding collecting other mushrooms or any debris Sustainability should be emphasized: -collecting one by one -no raking -collecting only marketable mushrooms

-not disturbing the moss layers

Photo 5. Chanterelle collection basket

Field transportation, standardized packaging, refrigeration, and air freight are all services that are integral to the timely delivery of mushrooms to the world market. The following challenging components are critical to success of a fresh Chanterelle mushroom enterprise: 1. Consignments. Organized collection coordinated to fill exporter’s firm orders. 2. Organized teams of collectors, unlike the independent hunters that collect Morels. 3. Mobilized buying stations, strategically placed on roadsides receiving, weighing and grading the deliveries of collectors at coordinated times and dates. 4. Onsite packaging into mushroom flats, made of wood, plastic (Photo 7.)or corrugated fiberboard. Handling should be limited to 3 -- Collector, Packer, and Consumer. 5. Rapid motorized transport of enclosed vehicles dispatched directly to the airport (Photo 6) 6. Air Service. Pakistan International Airlines serves Western Europe and could be an important partner in the supply chain.

Photo 6. Suzuki “Carry” Appropriate Pakistan cargo vehicle

Photo 7. Packaging for shipment

Although ambitious, this business model could build on the successes of the Morel mushroom industry as many of the same participants are involved. A benefit for the collectors and exporters will be the ability to extend their mushroom activities an additional season; Morels in the Spring/Summer, Chanterelles in the Summer/Fall. Profitability will depend on price discovery during the initial phase of implementation. The emphasis will shift from the high prices and low quantities of dried and concentrated Morels, to a much lower price but much higher volume of available fresh Chanterelles. As a reference for comparison, collectors in North America average 6-8 USD paid per kilogram. One option not yet examined, is the possibility of other mushrooms in the forest for both fresh and dried markets. Japan is the other major importer after Western Europe and is very keen on sourcing Asian varieties, many of which grow wild in similar forests to Pakistan’s. Further survey work is required to verify availabilities.

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