One critical factor for success or failure in developing an agricultural value chain are the modes

of intervention at the farmer level i.e., do we just provide him with the required inputs, or
provide financial assistance, or provide the market and technical information, or improve his
access to the markets supply and demand forces, or provide closed loop solutions. It is very
important that external interventions are not just concerned with the increased Yields for
farmers produce without considering the markets supply and demand forces, because
increased yield could still result in losses for players in the value chain and especially farmers if
the market prices drop sharply (excess supply in the market could be one reason). Thus,
farmers should also be connected to the market by reducing the information asymmetry. PCI
Pakistan followed an integrated approach to the value chain developed and focused on
reducing the risk for farmers by intervention across all four sides (closed loop solution) of the
farmers ( EXHIBIT) and making the value chain more stable by reducing the inherent
uncertainties for farmers such as assured purchase of produce at pre-determined price.

Another major challenge that PCI Pakistan faced was that in Pakistan, around 75%-80% of the
potato produce was harvested in January to March season, which meant that for year-round
production of its chip’s brands, PCI Pakistan had to store the potato produce in cold storage.
But some varieties could only be stored for a period of 5-6 months and not longer. Therefore,
PCI employed a strategy to address this challenge by classifying the potatoes into different
quality (storage) categories based on a detailed quality assessment. Thus, for December to April
period it would process the fresh produce. for May to August period, use the short-term
storage produce and for August to November, process the long-term storage procedure. This
strategy enabled Frito Lay to continue its operations throughout the year for its Lays and Wavy
brand.