Empowering Rural Women in Afghanistan Rural Change In the rugged, semi-desert environment of north and west Afghanistan, it is common to see fields upon fields of poppies. The red flowers are grown by many to illegally produce opium, which is then processed and sold on the international black market. Historically, opium production has been extremely successful for farmers in rural Afghanistan, although it is frequently cultivated under the pressure of local Taliban forces. Now there is change underway. Since 2006, international organizations such as USAID, the World Bank and DACAAR (Danish Committee for Aid to Afghan Refugees) have been providing assistance to rural Afghans, mostly located in the Herat province, helping them convert their poppy farms to fields of purple crocus flowers, from which the world's most expensive spice, saffron, is produced. Saffron is the red stigma found inside a crocus flower and sells for ten times the value of opium. When added to food, saffron has a distinctive earthy smell and flavour. Each flower produces only three stigmas, which must be hand-picked during the short annual flowering season. It takes approximately 150 flowers to yield one gram of saffron threads. High quality saffron sells for between USD 2,000 and USD 4,000 per kilogram in global markets. In 2015, 18 companies were selling and exporting Afghanistan's saffron from the Herat province and, overall, 60 to 80 percent of the approximately three tons of saffron produced in Herat is exported. In spite of this, 95 percent of the global market share is held by Iranian saffron. International Assistance In recent years, several aid organizations have begun focusing their efforts on women in rural areas of Afghanistan. Traditionally, rural women do not attend school, are often limited in movement outside the home and are unable to gain employment to earn money for their families. With the assistance provided in the form of training, loans and expertise, the contributing organizations have empowered groups of women to form growers' associations and cultivate, process and sell saffron locallyand, more recently, internationally. What began in 2011 with approximately 117 employed had grown to more than 800 female saffron growers by 2015. Feasibility of International Trade 2 FITT One particular group, the Saffron Growers' Association of Afghanistan (SGAA), has experienced a great deal of success in local markets and has begun exporting their locally produced saffron to two suppliers in India, an attainable goal due to India's reduced import standards of food quality and packaging. The SGAA employees are professional and courteous, and the leader of the association is a strong-spoken woman with some business background who operates SGAA according to a solid business plan, created through the training provided by USAID. The SGAA saffron is of high quality by Afghanistan standards, but doesn't quite meet international market standards. A second challenge to the group's success, and by far the biggest obstacle, is the intrinsic belief in the country that women should grow and dry saffron, and men should sell it. Opportunity to Grow One non-governmental organization, the Scottish Association to Eradicate Poverty (SATEP), has been monitoring the story closely and is looking for an opportunity to make a difference. SATEP is a humanitarian development organization that has been working to decrease poverty around the world since 1994. Its global expertise and U.K. location make it well positioned to provide assistance to SGAA, who appears poised to expand even further and begin exporting saffron to other types of markets. SATEP knows this is possible and is confident it can assist. Now it needs to determine whether SGAA is ready to raise its exporting activity to the next level. Premium markets, such as the U.S., the U.K. and Japan, will pay top dollar for high-quality saffron. SATEP has conducted a target market analysis and determined the U.K. is an optimal market for this project. There, saffron sells for between GBP 2.00 (Waitrose, Sainsbury's) and GBP 10.80 (Norfolk Saffron) for 0.4 grams, depending on quality and availability, and the market is not yet saturated. To reach global markets such as the U.K., SGAA will require assistance opening new channels of export. It is lacking in international connections and the tools to forge new partnerships in other countries, such as daily access to the internet and mobile phones. These are areas where SATEP will be able to assist. The U.K. market differs from its Indian counterpart on several areas related to import regulations, as well as on generally accepted market standards. Products entering the market must meet a high standard of quality and are subjected to rigorous controls. Food and beverages entering the U.K. are required to meet specific sanitation and hygiene criteria, beginning with the method of harvesting the product, through to the drying process, packaging and shipping to the target country. Agricultural products must be harvested according to strict environmental and safety standards set by the European Commission. Further standards on labelling are enforced by the Department for Environment, Food and Rural Affairs. In addition to U.K. import regulations, there are other factors an organization such as SGAA will need to examine should they wish to export at a comfortable profit. Packaging, for instance, is extremely important. Packages should have a modern design and be economical, environmentally friendly and consistent from one shipment to the next. Imitation saffron is a major concern in today's markets, due to recent large-scale scandals involving imitation saffron from Spain being sold to importers as the genuine product. Some guarantee of authenticity will be required, such as an irreproducible watermark or symbol on the packaging. Feasibility of International Trade 3 FITT Fair trade is also a growing market consideration, particularly in socially conscious markets such as the U.K. Some thought and planning should go into how the growers' association could take advantage of this growing trend. The opportunity presented by SATEP could be highly beneficial to both parties. SGAA will benefit from training, expertise, increased credit availability and access to global export channels. SATEP will realize its goal of growing the female-produced Afghan saffron market in order to provide greater employment rates and higher standards of living for Afghan families. Learning Outcomes This case study relates to the following learning outcomes from the three modules in the course Feasibility of International Trade: Assess the readiness of the organization to undertake the potential new international trade initiative or expansion. Design a research plan and conduct the designated research. Conduct export cost and pricing analysis of products in order to evaluate financial viability. Analyze the health, safety and security risks to personnel of an organization working in a foreign country. Analyze existing and shifting political circumstances of a country related to the stability of the government and how international business is conducted in that country in order to prioritize target markets. Develop, implement and monitor risk management strategies based on the shifting political circumstances of a country related to the stability of the government and how international business is conducted.

Case Study Question

Question) There are several risks present in this case. Identify two potential risks and suggest mitigation strategies for each.