Evaluation of the Conditions and Factors for The Development of a Regional Peanut Cluster

N. Bencheva, St. Georgiev

Abstract: The main objectives of the study presented in the article are: analyzing the state of peanut production and opportunities for converting it into a competitive sector; assessing the conditions, assumptions and factors for the development of a regional peanut agro-cluster and proposing a design model for the South Central Region. Diverse methods for collecting and processing information have been used in the research regarding cultivated areas, production, average yields and market prices from FAO statistics database, the Ministry of Agriculture and Food, „Agristatistics” and regional agricultural offices. Information concerning resources expenditure - seeds, fertilizers, chemicals, irrigation water, manual and mechanized labor, fuel, as well as revenue and profit per unit area per kg - has been computed on the basis of data collected from questionnaire feedback provided by 235 peanut-growing farms. It has been estimated that by 2000, Bulgaria used to be a leading country in the peanut production in Europe. Over the past 10 years, the peanut-growing areas and production have been heavily reduced to the critical level, which caused crisis in this industry. The main reasons for the latter are: large and uncontrollable import of peanuts from China and countries in Africa and America at significantly lower prices than those of the locally grown peanuts; very limited financial capacity of farmers to purchase production resources - seeds, fertilizers and others. Moreover, due to small-sized area of 5 - 10 da, agricultural machinery is used unprofitably, which impedes both the construction of appropriate crop rotations and the investments aimed at improving soil fertility and yield increase. Last but not least, this is the large number of resellers and small traders who purchase peanuts at prices lower than production cost. The main conclusion is that in order to convert peanut production into a competitive industry, it is essential to move on to a new and better form of governance and organization, such as the cluster framework. It has been proven that the main prerequisites for the peanut cluster development are present: availability of producers and processors of peanuts, availability of competitive advantages for peanut production, geographic concentration and specialization, research potential, good transport infrastructure in the South Central region and easy communication among cluster participants. On the other hand, a favourable impact is exerted by the main groups of factors, such as: production and technology, marketing, investments, innovation, infrastructure, legislation and strategy that enable the organization of modern production of peanuts, implementation of a single pricing and marketing policy, introduction of new technologies in production and marketing the finished products. Each of these factors contributes to the ultimate goal - building a cluster with a good interaction among participants, directed to the development of competitive peanut production and products. A design model for building a regional peanut cluster in the South Central region has been proposed. The aim is to increase competitiveness and reduce the risk of production, to limit the dependence on natural and climatic conditions, to avoid the uncertainty of peanut market, as well as the dictate imposed by traders and processing companies. The design structure of the cluster model is built on four levels allowing participation of all stakeholders in the sector dealing with production, processing and marketing of peanuts.

Keywords: competitiveness; conditions; factors; prerequisites; regional clusters of peanuts; SWOT analysis

Date published: 2018-02-15