Practice Abstract 40 - Determination of market prices for chickpea crop – Case study for Portugal

Short title (native language): 
Determination of market prices for chickpea crop – Case study for Portugal

Short summary for practitioners (native language): 
Chickpea are the third most important grain legumes in the world. According to FAO data area and crop performance are increasing. Year 2017 :14.6 million hectares and production 14.8million tons. In Portugal is a small producer yet the trend is the same. Rotational benefits and the superior financial returns drive the trend. Not an agricultural commodity, prices are not defined the international market. In recent years, prices have been derived by major producers, using schedule based on seed size. Large fluctuations in the value result, creating uncertainty for all actors in the chain. AICF Agro Inovação S.A., a company dedicated to the production of grain legumes, such as chickpea, has been trying to define new strategies for the production and sale of the final product for human consumption, allowing all actors in the chain to take advantage.
To avoid price fluctuations to farmers, AICF uses 3 year fixed price contracts.With security for all actors in the chain. The Agricultural Marketing Resource Center report economic viability of chickpea using on the same strategy. Ultimately it depends on market development, contract and seed pricing, and production capability.
Contracts define the seed price, produce quality specifications and prices. Permissible percentages for grain sizes, broken grain and impurities are defined. The cost of the seed and impurities is deducted from the final production value. Note that contract values are the minimum prices, taking into account the producer company, and are in accord with studies realized to reach the average cost of production/hectares, edaphoclimatic conditions of the production area and margin for the company.
The fixed price strategy allows the value chain to be strengthened.
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