Coral Town, The Paradise Islands A Case Study in Value Chain Analysis for Poverty Alleviation

Coral Town : A Case Study in Value Chain Analysis for Poverty Alleviation Coral Town is located on the east coast of Vanua-taki, the main island of the Paradise Islands, separated by 60 kms of mountains from Port Raro-ria-lofa, (the capital city) which is on the west coast. It has three kilometres of sandy beaches fringing a lagoon that is 500 metres wide, with a coral reef that runs for more than 30 kms offshore making CT a haven for scuba diving. The Paradise Islands Vanua-Taki Port Raro-ria-lofa Coral Town

Coral Town : A Case Study in Value Chain Analysis for Poverty Alleviation Exercise 1. Draw a map of the town, showing the location of the following features: 1. Determine a boundary of the town (= = = = =) Plus other features ……

Key statistics The poverty line is regarded as less than $150 a month for a household of 6 persons (2 adults, 4 children under the age of 20 yrs). Demographics Coral Town - population of 6,220, which includes 300 foreign residents. There are 888 households, and the average household consists of 3 adults and 4 children under the age of 20 years Village One - 85 families averaging 10 members per household (total 850). Village Two - 54 families averaging 8 persons per household (total 432). Total number of households in Town + villages is There are about 300 Minorities people who squat in and around the town, scavenging on the town garbage dump and picking up itinerant unskilled temporary jobs. Monthly incomes are not known but estimated to be about than $100 per family of two adults plus three children (recycling waste is main source of income).

Employment: The Town  In the Town, 710 or 80% of all households have at least one family member employed full time.  Of these, 590 earn above the poverty line, 70 earn between $150-$160 per month, and 50 earn less than $150 per month.  There are 178 households with no member employed full time and whose monthly income is $100 or less.  70 households or 15% are female headed households and for all of them their income is less than $150 a month.

Employment, accommodation sector The resorts, hotels, and guest houses employ 650 people full time, 420 people part time throughout the year, and an additional 500 people part time during the peak four months of the high season. The three beachside resorts have a total of 96 expatriate management staff for whom they provide accommodation in 44 x 2-3 bedroom bungalows or apartments. In addition the scuba dive resort employs a husband-wife dive master team.

Employment, food and beverage sector Restaurants, cafes and bars employ 210 people of whom only 54 are full time. Employment, excursions and transport sector Travel agencies, tour operators, the one taxi company (ten cabs) in the town and local transport carriers employ 80 people full time and 35 part time.

Employment, handicrafts/souvenir sector  The three retail handicrafts/souvenirs outlets employ nine people full time and 6 people part time. There are many more itinerant handicraft artisans of whom only 30 work full time at producing crafts. Six of the nine f/t staff (husband/wife owners) average $300 per month in income. The 3 sales assistant (one per shop) earn $160 per month each. The p/t staff average $125 per month (p.a. total of $9,000).  The income of itinerant handicraft producers varies enormously from more than $5000 for ten master carvers to less than $500 p.a. ($50 per month) for about 200 mainly women basket makers and weavers. The handicrafts ‘industry’ is a supplementary cash income for the farming and fishing activities of most village households.  About 20 Minorities women occasionally make and sell handicrafts (baskets, etc) but earn less than $25 per month each.

Employment: the villages  Most of the adult villagers are itinerant farmers and fishermen. Children assist the adults in these tasks.  Of the combined total of 139 households, only 22 have at least one family member working full time in the formal sector (the four nodes above).  A further 56 are employed in part time menial positions (cleaners, gardeners, maids, etc).  About 50% of the households have one or more family members involved in some sort of handicraft production. Cash income per household is less than $100 per month.

 Tourism: Direct Income generation  The Accommodation Sector has a total of 950 beds (346,750 bed nights).  The 3 beachside resorts average 80% occupancy throughout the year (90+% in the high season, 65% low season), selling a total of 175,200 per bed night for a gross turnover of $22,776,000. ALOS (average length of stay) is 7 days six nights. Staff salaries and wages total 14% of operating costs ($3.2 million).  The main street hotels and backpackers lodge average 65% occupancy throughout the year, selling a total of 71,175 bed per bed night for a combined gross turnover of $3,303,875. ALOS is 3 nights. Staff costs are 12% ($396,000).  The five guesthouses average 50% occupancy throughout the year, selling a total of 9,125 bed per bed night for a gross turnover of $228,125. ALOS is 4 bednights. Staff costs are 33% ($72,000).

Food and Beverage sales in the restaurants, cafes and bars total $9.9 million.  Staff wages account for about $1,225,000. Almost 20% of staff are expatriate (owner/operators) and they account for almost $1 million of wages costs.  Purchases of fish - $1,475,000  Purchase of local fruit and vegetables - $1 million  Purchase of local beverages - $100,000 (mainly sugar cane juice)  Imported food and beverages - $5 million  Total costs $8.8 million  Margin $1.1 million or 11%.

Excursions and transport expend $215,400 on wages (guides, drivers and office staff).  Full time staff monthly wages vary from 40 above $220 per month, 20 averaging $160 per month and 20 averaging $140 per month (total pa.$177,600).  The 35 part time staff average $90 per month (total p.a.. $37,800)

Exercise 2. Using the figures above, work out value chains for the 4 nodes – accommodation; food and beverages; excursions and transport; and handicrafts. Exercise 3. Map where the poor participate within each value chain (households below the poverty line).You will have to use commonsense and guess-timates (e.g. exactly how many staff in a hotel may be earning less than the poverty line of $150 per month and where are they located; how many middle men/wholesalers are involved in the food/fish supply value chain or the handicrafts value chain?) Exercise 4: For each sector propose 2-3 interventions likely to have the best prospects for contributing to a reduction in poverty (Hint: refer to the long and short lists derived from the Port Raro-ria-lofa exercise). END