Freekeh in Lebanon - Value Chain Assessment and Analysis - Executive Summary and Recommendations

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Executive Summary

Freekeh (sometimes spelled freek or farik) is a cereal type of food made from green durum wheat (Triticum turgidum var. durum) that is traditionally dash-burnt and rubbed to create its unique flavour. It is an ancient dish derived from Levantine and North African cuisines, remaining popular in many countries of the eastern Mediterranean Basin where durum wheat originated.

Based on market studies, mainly by the LIVCD program of USAID, it was determined that FFreekeh had a high market demand locally, regionally, and in developed markets such as the US and Europe where Freekeh is recognized for its superior health benefits. Following a comprehensive survey on Freekeh production and marketing, it was observed that its production is mainly concentrated in South Lebanon.

Value chain actors and stakeholders expect promising future development for Freekeh due to its high profitability and job creation opportunities. These two drivers carry together the majority of the socio-economic weight (66%).

Although export is a highly appreciated target in the economic balance, its expectation weight was modestly low (15%). This is mainly due to the fact that the internal market is still thirsty for Freekeh and demand is much higher than supply; hence, imported volume is higher than what is locally produced. The majority of Freekeh quantity sold in Lebanon is imported mainly from Syria and other countries such as Egypt and Turkey, representing about 66% of the total market. About 31%, or about 100 MT, are produced locally by individual farmers and/or organizations such as agro-food cooperatives dominated by house-wives.

The target market of Freekeh is diverse, informal, and governed by availability and concentration of customers, particularly Southerners - inhabitants of South Lebanon - who are more familiar with the product than other Lebanese. The largest selling platform of Freekeh (over 80%) is controlled by exporter and wholesalers, whereas, the villagers’ share is about 3%, and cities buyers are just below 8%.

The marketing system in Lebanon is not well defined and channels are hidden away from the source i.e. farmers or cooperatives from small producers, particularly farmers who are too busy with their land work operations and are not capable of hiring experts. Centralisation of Freekeh marketing (capital-oriented) is still very effective by all means and dimensions in Lebanon, and therefore, a service provider organization in Beirut should be utilized to facilitate access to marketing and distribution channels. Although export of Freekeh is a significant economic target, however it is still very limited mainly due to a small volume of production (about 100 MT) and inferior quality due to lack of mechanization, microbiological and physical contaminants, and a poor marketing strategy.

Quantitative data of Freekeh (market volume, position in the market life cycle, saturation of the market, Growth rate, partial market, stability of demand) is not border clear. The total volume of Freekeh does not exceed a few hundred tonnes (less than 300 MT), the vast majority of which is imported (about 200 MT). The general estimate of production by individual farmers - i.e. farmers not incorporated in cooperatives or other associations - reaches 23 MT from a potential capacity of 25 MT. Their marketing platform is mainly sold to villagers (locally) and to individuals and families who are living in cities, mainly Beirut, but originally from South Lebanon. It is quite clear that target customers are mainly Southerners and target regions where Southerners reside. Qualitative data (structure of customers’ needs, purchasing motives, purchasing process and attitude, and intensity and strength of competition) are also short. The only selling factor is the traditional legacy.

Competitors are mainly foreign producers relying on national traders or establishments which import Freekeh out of need and market satisfaction. The estimated volume of imported Freekeh is about 120 – 200 MT compared to about 100 MT that is locally produced. Competitors, mainly Syrian, are attracted by high prices on the Lebanese platform and relatively high power of purchase, especially since their cost of production is much less than that of Lebanese mainly due to labour and raw materials cost.

Farmers (16.8%) are the only group that handle Freekeh production up to a bulk end product, with villagers - and to a lesser extent city customers - as their target market, whereas, cooperatives (mostly women) may be involved in further processing to packaging and marketing, with wholesalers or business enterprises are their main target market.

To date, Freekeh production in Lebanon is still mostly bound to farmers and cooperatives in particular. The average production per farmer is about 0.5 - 1.5 MT, whereas cooperatives (mainly women) production ranges from 0.5 – 10 MT. Most of the producers belong to the poor segment of rural society.

Cost analysis revealed that the highest cost was consumed by labour work which is due to inferior standards of technology. This can be reduced significantly if technology is developed to meet requirements. Also, the difference between Bekaa and South Lebanon is mainly the production capacity, both the potential and actual. Unlike Bekaa, in South Lebanon most of the wheat grown for Freekeh is rain-fed and therefore, productivity is lower with inferior quality (small grains size). As a result, the netincome of southerners is reduced by about 50%.

Taking into consideration the mapping practices and the overall techno-economic assessment, a market-driven network formulation with strengthened interactions between vertical and horizontal chains should be formulated. The value chain upgrading vision focuses on the objectives of direct relevance to the operators, especially value creation (increased sales volume and cost differentiation). This will lead to enhanced value captured or job created for the benefit of the poor. The expected impact is “to improve socioeconomic livelihood of Freekeh farmers, chain operators, and the rural community through an upgraded value-added chain with higher real incomes.”