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AKKAR MUSHROOM CLUSTER DEVELOPMENT PLAN

AKKAR MUSHROOM CLUSTER DEVELOPMENT PLAN


Empowering Municipalities through Local Economic Development (EMLED)-CASE STUDY ! !
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DISCLAIMER This report is made possible by the support of the American People through the United States Agency for International Development (USAID). It was prepared by International Resources Group (IRG) for Relief International (RI). The content of this report are the responsibility of the author, IRG and RI, and do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................ III! GLOSSARY ...............................................................................................................................V! 1.! 2.! 3.! 4.! 5.! 6.! 7.! 8.! 9.! EXECUTIVE SUMMARY ..................................................................................................... 1! INTRODUCTION .............................................................................................................. 2! RATIONALE AND OBJECTIVES ......................................................................................... 2! NATIONAL CONTEXT ..................................................................................................... 3! DREIB EL AWSAT MUSHROOM ........................................................................................ 7! MUSHROOM PRODUCTION ............................................................................................ 8! CONSTRAINTS AND OPPORTUNITIES ANALYSIS .......................................................... 10! CASE STUDY: SMALL FARM/ COOPERATIVE ................................................................... 11! ACTION PLAN: HALBA AND KHERBET CHAR MUSHROOM DEVELOPMENT ................ 16!

ANNEX 1: PROGRAM OF MUSHROOM PRODUCTION TRAINING ....................................... 19! ANNEX 2: INITIAL INVESTMENTS, MUSHROOM PRODUCTION INCUBATOR (PUBLICPRIVATE PARTNERSHIP) ........................................................................................................ 22! ANNEX 3: WHITE MUSHROOM PRODUCTION PRACTICAL TRAINING REPORT:................ 24!

LEBANON AKKAR MUSHROOM -

EMLED CLUSTER DEVELOPMENT PLAN

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GLOSSARY
Kabous Kafalat Caves or traditional stone houses A credit guarantee institution established by the government, which guarantees up to 85 percent of loans made to MSMEs (Micro Small and Medium Enterprises) by commercial banks and offers an interest rate subsidy of up to 7 percent. Relief International United States Agency for International Development value chain analysis

RI USAID VCA

LEBANON AKKAR MUSHROOM -

EMLED CLUSTER DEVELOPMENT PLAN

EXECUTIVE SUMMARY
Sub-Sector: Mushroom Location: Cluster: Dreib el Awsat- Akkar

Summary: This cluster development plan addresses the mushroom sector in Lebanon. The analysis is focused on the Dreib el Awsat cluster in the Caza of Akkar, specifically in the village of Kherbet Char. Mushroom cultivation, a relatively new activity in Lebanon, is also new to the Akkar region. Currently, there are approximately five mushroom farms throughout Lebanon, one of them operating in Halba. However, domestic mushroom consumption has recently increased dramatically, particularly among young families and in restaurants that offer international food. Local mushroom producers are in a unique position to compete for a chare of the imported fresh mushroom market, which sells at a much higher price than the locally produced product. As a new industry in Lebanon, the mushroom value chain has yet to mature; exports barely exceeded $1,000 in 2006. Both local and international mushroom producers provide Lebanon with fresh mushrooms with international producers supplying roughly 90 percent of Lebanons mushroom demand. The value chain map shows the farm-to-market channels for local production, along with an initial assessment of constraints and opportunities. However, the level of mushroom production is so low in Lebanon that there is effectively no structured value chain.

LEBANON, AKKAR MUSHROOM- EMLED CLUSTER DEVELOPMENT PLAN

2. INTRODUCTION
The following case study on mushroom production in Dreib el Awsat- Akkar is part of the USAID funded Empowering Municipalities through Local Economic Development (EM-LED) Program. The goal of the EM-LED program is to support the Lebanese people through effective, democratic and empowered municipalities and a more vibrant local economy. To support this goal, the program will achieve the following objectives: a. Empower municipalities to support local level economic development through publicprivate partnerships and increase employment opportunities; and b. Promote effective, democratic collaboration between municipalities, communities and the public and private sectors. ! The EM-LED project will implement an innovative approach to support municipalities in creating an enabling environment for local economic development. This program is managed by Relief International (IR) and completed under a subcontract to International Resources Group (IRG).

3. RATIONALE AND OBJECTIVES


Considering the low level of development of the mushroom value chain in Lebanon, this report serves four purposes. First, it assesses the current mushroom market in Lebanon, with particular attention to the competitiveness of locally produced mushrooms relative to imports. It concludes that there is significant potential to expand domestic production, based on cost competitiveness. Second, it examines the technical requirements for expanding domestic mushroom production. These technical recommendations inform an action plan to introduce small-scale mushroom production in the Dreib Al-Awsat cluster in northern Lebanon. Third, it presents an action plan to accomplish this through two basic sets of activitiesa training program for local/potential producers and a mushroom production incubator, managed as a public-private partnership (PPP). Finally, it presents a business plan for developing larger-scale mushroom production. This latter objective is a response to the expressed interest of several individuals in the area who have taken Kafalat loans and received small grants through the Baladiyat project funded by the United States Agency for International Development (USAID) in Lebanon and implemented by Relief International.

LEBANON, AKKAR MUSHROOM - EMLED CLUSTER DEVELOPMENT PLAN

4. NATIONAL CONTEXT
4.1 THE LEBANESE MARKET
Fresh mushrooms are not a part of the traditional Lebanese diet, particularly because of the high cost and poor availability (fresh mushrooms are one of the more expensive produce products in Lebanon). Canned mushrooms (mainly from China and Europe) have been preferred because of their affordability. Only recently have fresh mushrooms found their way to the Lebanese market, with the surge of tourism since 2007 and the increase in restaurants offering international cuisine. Demand has increased rapidly (nearly doubling from the previous quarter), reaching roughly one ton of fresh mushrooms per week in November 2009, according to a local retail agent. The domestic market for fresh mushrooms is where Lebanons nascent production will have its greatest competitive advantage. However, it must compete with low-cost products from Syria and high quality products from Europe.

White mushrooms from Holland (in 250g packages)

White mushroom from Holland

Fresh mushrooms in Lebanese grocery stores

Fresh M ushrooms. Most mushrooms are imported fresh and then packaged and labeled in containers of 250g, 500g or 1 kilogram. The principal countries exporting fresh mushrooms to Lebanon in 2006 are presented in Table 1 below. The price of importing mushrooms from France is the highest at $4.00/kilogram. In comparison, importing Belgian mushrooms costs $3.52/kg. The price of mushrooms imported from Syria is the lowest at $2.22/kg. Syrian mushrooms are of medium quality because they are not refrigerated. Prices are competitive but production is seasonal and limited since Syrian farmers follow traditional production methods. Mushrooms imported from Europe are generally of better quality and tend to retain a healthy white color for five days, which explains the continuity of their existence in the market despite their high price.

LEBANON, AKKAR MUSHROOM- EMLED CLUSTER DEVELOPMENT PLAN

Table 1. Principal Mushroom Exporting Countries for Lebanon


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Canned M ushrooms: The canned mushroom industry imports approximately $4 million USD worth of mushrooms per year, mainly from China, Spain, and the United States. Imported brands range between $0.66 from canned mushrooms from China to $2.40 for mushrooms from France. The main importers include Al Wadi el Akhdar, California Garden, and Maxims. A complete list of Lebanese mushroom importers is included below. Canned M ushrooms: The canned mushroom industry imports approximately $4 million USD worth of mushrooms per year, mainly from China, Spain, and the United States. Imported brands range between $0.66 from canned mushrooms from China to $2.40 for mushrooms from France. The main importers include Al Wadi el Akhdar, California Garden, and Maxims. A complete list of Lebanese mushroom importers is included below.

A variety of canned mushroom brands in Lebanese grocery stores

Table 2. List of Canned Mushroom Brands in Lebanon


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LEBANON, AKKAR MUSHROOM - EMLED CLUSTER DEVELOPMENT PLAN

4.2

LOCAL MUSHROOM PRODUCTION

Fresh M ushroom Production: The most commonly cultivated mushroom species in Lebanon is the white mushroom (Agaricus bisporus, known as champignon de Paris), although other species (Pleurotus Ostreatus, or oyster mushrooms) are now being cultivated on a smaller scale. Mushroom production in Lebanon can be classified into two categories: Small businesses utilizing rural farming techniques (average of 5 tons per production) Large industry utilizing modern technologies (with large-scale production of 60 tons)

The major mushroom producers in Lebanon are listed below. The industrial-scale operations are vertically integrated operations, with production, packaging and marketing capacities. One mushroom farm in the Akkar region is run by Mr. Said Naim. Mr. Naim is a largely self-taught producer. He learned by trial and error over the past 10 years, conducting extensive internet research and reaching out to US universities for assistance (e.g. Pennsylvania State University). Mr. Naim has facilities for production, pasteurized compost (compost), and surplus capacity. He has expressed an interest in selling compost either to individuals or to a potential cooperative of which he would be a member.

Table 3. Mushroom Production Projects in Lebanon (2009)


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LEBANON, AKKAR MUSHROOM- EMLED CLUSTER DEVELOPMENT PLAN

Fresh white forest mushrooms are sold in supermarkets packaged or in bulk. Fresh oyster mushrooms are sold packaged and labeled, but not in bulk. These two types of fresh, locally produced mushrooms are shown below.

Locally produced white mushroom (sold in bulk)!

Locally produced oyster mushroom (packaged and labeled)!

LEBANON, AKKAR MUSHROOM - EMLED CLUSTER DEVELOPMENT PLAN

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