Breakdown of growth factors in amaranth production in the national scope

To determine precisely the degree of influence that factors such as yield, an innovation indicator and the surface harvested have had, or a combined effect in the growth of production, the ^{Venezian and Gamble equation (1969)} was used, modified by ^{Contreras (2000)} and data from ^{SIACON-SAGARPA (2012)} were used:

where: P_t = Total increase of the production for the period analyzed; Y₀ (A_t-A₀ )=Quantifies the contribution of the surface; A₀ (Y_t -Y₀ )=Quantifies the contribution of the yield; (A_t A₀ )(Yt-Yo)= Quantifies the combined effect of surface and yield; A₀ =Average surface harvested initial (1980=222.50 ha); A_t =Average surface harvested final (2010=3047.33 ha); Y₀ =Average national yield initial (1980=0.41, in t ha^-1); Y_t =Average yield final (2010=1.34 t ha^-1).

If the total increase in production for the 1982- 2010 period is equal to 100 %, it is possible to determine the proportion that corresponds to each factor, to evaluate if the yield has been intensive or extensive. The extensive growth consists in the increase in production through the increase of the surface harvested, situation that refers to technological obsolescence. The intensive growth relates to the increase in production via yield increase, fact that refers to a higher technological level. A combined growth refers to an increase in surface and yield equally (^{Zarazúa et al. 2009}).

Work panels

The technique of panels was used to build the characteristics of the amaranth value chain. The panels were made up of groups of experts from the states of Estado de México, Puebla, Morelos, Oaxaca, Hidalgo, San Luis Potosí and Tlaxcala, to achieve the characterization of the production system, its technological level, and the scales within a range of productive capacity. People who know the chain participated in these panels. They were carried out during the month of October, 2013.

The first working session in the field consisted in training about the foundations, principles and concepts around the methodology of value chains, during which the participants defined the first guidelines with regard to the analysis of the chain and the factors that define competitiveness.

Using a process of consensus building, in each panel a dialogue was established with the experts, with the aim of collecting information related from the production, as well as the technical parameters and commercialization systems for one base year. Therefore, the information was agreed upon under consensus of the panelists. Later, feedback was received and strategies and recommendations were developed. It took place during November, 2013, the attendees were representatives from the value chain in several states, such as input suppliers, producers’ representatives from different zones, two of the main transformers in the amaranth industry, representatives from SAGARPA, INIFAP, and non-governmental organizations.

Once the information was captured and processed, and with the aim of ensuring the validity and representativeness of the data obtained, the results were validated by the panelists.

The validation was performed through a consensus process, where the participants from the original panel were called again. In this stage, the results were presented with the intention of verifying whether the information was complete and correct, in addition to verifying if this information reflected the situation of the value chain. Likewise, it was verified that the panelists agreed in that the prospective analysis adequately reflected their expectations regarding the sector’s trends. The validation process is an indispensable requirement for publishing and divulging results (^{Zavala-Pineda et al., 2012}).

The amaranth value chain was modelled with the information given by the group of experts participating in two panels.

Field surveys

Seventeen surveys were carried out with key informants in the chain, which are part of the production system or else of the Producers’ Council in the states of Estado de México (3), Puebla (3), Morelos (3), Oaxaca (3), Hidalgo (1), San Luis Potosí (3) and Tlaxcala (1). At the level of industrialists and markets, five surveys were performed: San Luis Potosí (3), Hidalgo (1) and Tlaxcala (1).

The surveys were made up of qualitative questions that were transformed using a scale of 1 to 5 for qualitative analysis. The questions asked were with the aim of generating the variables described next.

Conceptual map of the amaranth value chain

In order to obtain a map of the value chain, the following levels were analyzed:

Decomposition of growth factors of amaranth production in the national scope

The growth of amaranth production is determined by the combination of the increase in surface and the yield in 66.12 % (Table 1); that is, this growth has occurred because of the interaction between both factors, not only because of the increase in surface or yield, but rather from a combination of both.

Table 1 Participation of factors in the increase of amaranth production. 

Source: authors’ elaboration with data from ^{SAGARPA-SIACON, 2012}.

On the other hand, the increase in yield per hectare between 1982 and 2010 increased at a mean annual growth rate (MAGR) of 4.36 %, while that of production at 15.34 %.

With regard to the increase in productivity, its growth is in function of the adoption of technological innovations, which are recommended according to the characteristics of the production zones (^{Estrada et al., 2006}). However, the adoption of these technological packages has been almost non-existent. According to ^{Muñoz et al. (2007)}, multiple factors intervene in the adoption of technologies, but one of the most important ones is the participation of a trained extension agent, who is knowledgeable about innovation networks, and this situation is practically unfulfilled.

Map of the value chain

The map of the amaranth value chain (Figure 1) was generated to show the actors, their functions, support services and relationships in the flow of the product from its production to the final market.

Figure 1 Map of the amaranth value chain in Mexico. 

Actors and functions. The flow of the chain begins with the agroindustry that supplies inputs, mainly for primary production; it continues with the stockpiling of production; then, grain transformation, and concludes with the sale (wholesale and retail). To the left of the image the main functions in the product flow are represented, from their elaboration to the final market.

Minor producers (less than 10 ha) fulfill several functions in the chain and, therefore, are represented with a rectangle that covers the production of raw material, the stockpiling and the artisanal processing of products made with amaranth (Figure 1). The differentiation based on the size of producers happens because those with less than 10 ha sell their production to local collectors, who in turn sell their production to local artisanal processers. These, in turn, sell their production wholesale to the central market, or retail in small stores, local supermarkets, health food stores, and in some cases to the industry. According to comments by panelists, producers who own more than 10 ha normally sell their production to the large transforming industry.

Horizontal relationships and connections. Figure 1 shows the different relationships and flows. For example, in the flow of input suppliers to the market, there is no diversity between the supply of inputs and the final market; nevertheless, there are informal traders to whom suppliers sell their products and do not add any value to the chain, since they are only dealers.

The power relations in the chain are hierarchical; few buyers who have the power, the information, leaving the relationship with their suppliers at a commercial level, except in the case of Empresa San Miguel, which according to key producers surveyed have a serious social commitment; it is an example of responsibility, and its equitable involvement with members has determined that a whole town improves its quality of life around this processing company.

It is important to highlight that several of the leaderships recognized within the amaranth chain in México have the vision of being able to develop it under guidelines of Solidary Economy, taking advantage of the window of opportunity that there is in face of the absence of a preponderant corporate actor that would impose the commercial logic, according to several actors interviewed.

Horizontal connections. Based on the information analyzed from the surveys and panels, there are no relevant examples in terms of horizontal connections at the level of producers. A culture of association among producers, which would allow them to improve their capacity for negotiation and to modify the power relations, could not be identified in this study.

At the level of industrialists, horizontal connections have been developed to elaborate the Mexican quality regulations for the grain and popping of amaranth. On the other hand, the actors have a representation of horizontal connections in a planning board for the Product System in the states of Morelos, Tlaxcala, Mexico City and San Luis de Potosí. Oaxaca is not recognized as Product System, but does participate in the dialogue table at the national level; Puebla does not participate and we pretend for this initiative to have a reach for the National Product System in the future, to define the strategic reagent plan for the amaranth chain.

Of the actors surveyed in the chain and the panelists, 59 % mentioned that there is a low to very low participation of the members in the value chain for decision-making, which is a limiting factor because the level of participation is also linked to the willingness to invest to improve the chain.

It is interesting that 76 % of the people surveyed mentioned that there is a low to very low level of cooperation between actors, and the main reasons for the lack of cooperation appear in the following figure. Likewise, in terms of the degree of association of producers, 77 % mentioned that they do not belong formally to any type of association. This limits the power relations, especially with regard to the volume and the producers’ ability to negotiate, and is an important limiting factor in the chain (Figure 2).

Figure 2 Cooperation between actors in the amaranth value chain. 

Primary information from the national market. Because of the type of process in México, 79.9 % of the products are based on popped grain, 17.2 % based on flour, and 2.9 % based on extruded (^{Espitia et al., 2012}).

^{Escalante (2011)} mentions that the “popped grain” refers to the seed that is placed on clay or metal pans that are heated up with firewood or gas so that it becomes inflated; once popped, the expanded grain is left to cool, then it is sifted to separate the grain that did not expand, it is poured into bags to be stored, and it is sold as cereal or used as input for other products.

In México, 58.9 % of the products are consumed as alegrías (traditional sweets), made with honey, sugar or molasses, and other ingredients. Among the products of greater acceptance in the market, there are simple palanquetas (24.3 %), wafers (7.9 %), covered (6.3 %), and other products (^{Espitia et al., 2012}).

According to comments from panelists, the greatest risk in the chain is on the side of producers, since the production depends on the weather conditions, since the rains at the time of the harvest can make them lose the production; however, the profitability is increased as you move forward in the chain’s links.

At the level of market, the team of interviewers quantified that 65 % of the people who purchase are the ones who consume. Consumers mentioned that the main uses of the amaranth-based products are powder to mix with water, food supplements, granola, or for direct consumption. The main products consumed are alegrías, palanquetas, granolas, cereals, popped grains, and wafers. The consumers declared that the attributes of the products that determine their purchasing decision are the nutritional level, the flavor, price and presentation, according to the percentages that are shown in the table. This information is important to guide the communication efforts to generate a culture of consumption of the products (Figure 3).

Figure 3 Specificities of the product’s attributes 

Critical support services. The primary information gathered showed some services that are critical in the amaranth value chain. Next, the results from the surveys are presented.

Financial services. In the working sessions and in the surveys applied, financing was mentioned as a limiting factor to improve technology or working capital. Of those surveyed, 65 % mentioned they have low to very low access to credit. On the other hand, there are a series of entities that offer credit to agricultural producers, which are shown in Figure 4. However, apparently since amaranth is not declared as a strategic crop, other crops are the priority for financing; 47 % mentioned that either they are not candidates for credit, or the capital cost is too high.

Figure 4 Results of financial services. 

Technical assistance services. The difficulty in access to technical assistance is also a limiting factor that is generally mentioned, both in the working sessions and in the surveys. 94 % of the producers indicated that although there are entities that offer technical assistance at the rural level, they do not have access to quality assistance, because the technical assistance available is focused on other crops declared as priority (Figure 5).

Figure 5 Results of technical assistance. 

Quality management services. Differences in the quality and innocuousness of many of the amaranth- based products were identified, particularly in those produced at the artisanal level, which is something that requires regulation. According to ^{Escobedo et al. (2012)}, in a sample made of amaranth-based products, 65 % complied with standards of excellence in quality such as those established in the applicable Mexican norms [NMX-114-SCFI-2009. Amaranth grain. Specificities of quality and assay methods; and PROY NMX-116-SCFI-2010. Popped amaranth grain (Amaranthus spp.) for human use and consumption].

According to the results from the surveys and working sessions, 47 % of the actors state that there is a high to very high compliance to the quality standards, and 41 % of people mentioned that there are high incentives to improve the quality in the chain. 82 % of the producers indicate they do not have the infrastructure to improve the quality. A low percentage indicated they have the equipment for threshing, the gathering center and appropriate logistics to ensure an adequate quality management.

Commercial intelligence. The purpose of participants in the working sessions with regard to the market in common was to generate a consumption culture of amaranth quality, and to connect consumption to the nutritional properties and of cultural identity. However, a deficiency identified in the amaranth chain is the knowledge about the final consumer’s profile, and about marketing management. This analysis needs to be complemented with market and marketing research that allows identifying segments, potential channels, and based on this information, finding the adequate strategy to communicate and position in the mind of consumers the appropriate marketing message.

Logistics and storage. Regarding the services of logistics and storage, no actors were identified who offer these services, according to the surveys and meetings that took place.