Situation Analysis of Biofuel Industry in Zambia by Frank

8/3/2019 Situation Analysis of Biofuel Industry in Zambia by Frank

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Report

SITUATION ANALYSIS OF THE BIOFUELS INDUSTRY

IN ZAMBIA

By

Frank M. Kayula

(Private Consultant- fmkayula@yahoo co uk)


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(Private Consultant- fmkayula@yahoo co uk)

ACKNOWLEDGEMENTS

I would like to thank the Civil Society Biofuels of Zambia, who contracted me though the

Zambia Land Alliance to undertake this research study on the Assessment of the

Biofuels Industry in Zambia.

Many thanks are also rendered to Mr. Richard Mwanza and Mr. Gear M. Kajoba for the

initial contribution to the writing of the study report. I am grateful also to Mr. Munguzwe

Hichaambwa for the data entry and tabulations.

Other thanks go to the different stakeholders in government, Private sector and Civil

Society for responding to requests for information relating to the Biofuels Industry in

Zambia.

Gratitude is also given to OXFAM GB for coordinating and Finnish Embassy for funding

the study.

FM Kayula


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EXECUTIVE SUMMARY

The past decade has seen the biofuel industry raise to greater recognition as a cardinal

part of the energy sector in Zambia. Various companies, civil societies and donor

organizations have taken different roles and interest in the energy sector to promote bio

energy and improved rural livelihoods. This report is a synthesis of data collected and

assessed for the status of the Biofuels Industry in Zambia basing on the study

conducted in seven districts.

The overall objective of the study was to ascertain the socio-economic impact of the

biofuel promotions on the small scale farmers. The study was divided into six main

areas of concern as highlighted below:-

i. To collect and analyse general Information on the biofuels industry in Zambia

ii. To establish interventions by government and other stakeholders in the biofuels

industry

iii. To establish the nature of biofuels out grower schemes with respect to

production, processing, marketing, extension services, contracts, organization of

the scheme and of the biofuel feedstock.

iv. To ascertain the impact of biofuels industry on food security and land use, land


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support of SNV and HIVOS in Kapiri Mposhi, Solwezi, Kabompo and Zambezi to give a

wider perspective of the status of the biofuel industry in Zambia.

The key findings showed that the Zambian bio fuels industry was still in its infancy

stages; it was just emerging and characterized by experimentation with feedstock crops

and biofuel production models. There were two competing bio fuel production systems,

namely biodiesel and bio-ethanol. In Zambia, the proposed feedstock for bio ethanol

were sugarcane and sweet sorghum, while palm oil, soy beans and Jatropha were

suggested and being used for biodiesel. There was a strong drive to promoting

Jatropha as the main feed stock crop for biodiesel.

The findings further showed that government and other stakeholders had put in place

strategic guidelines for engaging in biofuels production. However the guidelines did not

seem to be adequate enough to protect the wellbeing of the vulnerable small scale

farmers from large companies out to make profit from the industry. In this vein, while

stakeholders like the Biofuels Association of Zambia (BAZ) and private investors were

advocating that government provides incentives, investment, and policy guidelines to

establish the industry, civil society on the other hand was advocating for a pro poor

biofuels industry, through the Civil Society for Biofuels Forum (CSBF).


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to meet local demand, it was estimated that by 2010, 428 million litres of bio-ethanol

would be required in order to achieve a 20 per cent rate of blending with petrol.

The survey gathered data from eight (8) processing companies operating in the study

areas. This was besides the other companies that have produced some biofuel for use

in the greater city of Lusaka and other districts. It was observed that over 87% of the

companies interviewed in the study areas were local and small while about 12.5 %

where foreign and large companies. Unlike big companies that were affected by the

credit crunch and reduction in fossil fuel prices on the global market to the extent that a

number of them retreated from rural areas, small companies seemed firm and wishing

to expand their outreach programmes.

With respect to land tenure, some of the interviewed companies had their own land on

which they grew jatropha. However, much of the jatropha was grown on small scale

farmers land. This had implications regarding the allocation of land to biofuel crops as

opposed to food crops. Although the aforesaid had not occurred in the study area,

Kayula and Chitah (2009) did find out that size of land used for biofuels is indirectly

related to size of land assigned to food crops as the hectarage increases beyond one.

At five hectares, the relationship is inversely tied with land for food crops taking a

positive steep up unless were jatropha is grown as sole crop for biofuels


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farmers revealed that more than 85% small scale farmers interviewed were contracted

for less than 2 ha of jatropha. Some of the smallholders indicated that they would

consider expanding their jatropha hectarage for various reasons including anticipated

increased revenue from the jatropha schemes.

Although the majority of the contracts were for a period of less than 5 years (34.1%); the

second bigger chunk (22.5%) had contracts of more than 30 years. These contracts

were either written (85.4%) or verbal (14.6%) and the majority (72.0%) of the

smallholders were not happy with the nature of the contracts, because contracting

companies made no follow up support as per contract and because of the low prices

offered for the jatropha grain.

On average, smallholders had not put much land under biofuel crops. Most (85%) of

the farmers put up less than 1 ha of jatropha. The fears of farmers converting land for

food production to jatropha production did not come out during the study. Rather

possibilities to give up jatropha production were more likely due to low returns from

jatropha. It could be argued that farmers were careful to avoid putting land that is

required for food production to biofuel crops, as strategy to ensure food security.

Although jatropha was said to be labour demanding 72 9% of those interviewed were of


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A total of 99.2% of the farmers stated that they were not involved in biofuel processing.

Fifty percent of the farmers that processed the jatropha into oil sold the oil, while the

other 50% used it at home. It was found important to empower small scale farmers to

process the jatropha into oil not only to add value and thereby make extra more income,

but also to provide access to cheaper and environmentally friendly energy for lighting

and soap locally.

In terms of perceived environmental impact of biofuel production, 61.5% of the farmers

stated that jatropha production contributed to loss of and /or variation to biodiversity.

However, further probing revealed that there hasnt been such changes in the

biodiversity. It is possible to lose biodiversity with clearance of large tracts of land for

biofuel oil plants. Similarly, 93.8% feared that jatropha growing would lead to pollution

of ground and surface water; nutrient depletion, domination of indigenous plants; and

deforestation (11.0%). However, like any other crop, jatropha requires replenishment of

soil fertility for it to grow well over a longer period as it mines for nutrients to feed itself

to grow.

It is concluded that jatropha industry is relatively new in Zambia. Although guidelines

have been formulated to regulate the industry, these need to be reworked to include

protection for the small scale farmers engaged in jatropha production under out grower


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ACRONYMS

BAZ - The Biofuels Association of Zambia

CARB - California Air Resources Board

CFU - Commercial Farmers Union

CSBF - Civil Society for Biofuels forum

EIA - Environmental Impact Assessment

ERB - Energy Regulation Board

GHG - Green House Gas

GRZ - Government of the Republic of Zambia

IEA - International Energy Agency

ILUC - Indirect Land Use Change

IPCC - Inter Government Panel on Climate Change

LCA - Life Cycle analysis

MACO - Ministry of Agriculture and Cooperatives

MDG - Millennium Development GoalsMEWD - Ministry of Energy and Water Development

NGO - Non Governmental Organization


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TABLE OF CONTENTS

CONTENTS

ACKNOWLEDGEMENTS ............................................................................................... iiEXECUTIVE SUMMARY ............................................................................................... iiiACRONYMS ................................................................................................................ viiiTABLE OF CONTENTS ................................................................................................. ixCHAPTER 1 .................................................................................................................... 11.0 INTRODUCTION ...................................................................................................... 11.1 BACKGROUND......................................................................................................... 11.2 OBJECTIVES OF THE ANALYSIS ........................................................................... 31.2.1 Overall Objective .................................................................................................... 3

1.2.2 Specific Objectives ................................................................................................. 31.3 METHODOLOGY ...................................................................................................... 31.3.1Study Tools and Methods ........................................................................................ 31.3.2 Target Area ............................................................................................................ 41.3.3 Target Group .......................................................................................................... 41.3.4 Sample Size ........................................................................................................... 41.3.4 Sampling Methods .................................................................................................. 5


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2.2.1 Global Trends ......................................................................................................... 82.2.2 Biofuel Potential ..................................................................................................... 92.2.3 Policies ................................................................................................................... 92.3 ISSUES WITH BIOFUELS ...................................................................................... 102.3.1Biofuels on Socio-economic Development ............................................................ 102.3.2 Environmental Impact and Biodiversity ................................................................ 112.3.2 Impact on Land and Land Use ............................................................................. 112.3.3 Impact on Women and Children ........................................................................... 122.3.4 Impact on Out grower Schemes and Small Scale Farmer Contracts ................... 12CHAPTER THREE ........................................................................................................ 133.0 FINDINGS ON biofuel PROCESSING COMPANIES OPERATING IN ZAMBIA ... 133.1 NATURE OF COMPANIES ..................................................................................... 133.1.1 Reasons for Engaging in Jatropha Production ..................................................... 143.1.2 Common Biofuel Feedstock ................................................................................. 143.2 FEEDSTOCK PRODUCTION ARRANGEMENTS .................................................. 153.3 SERVICES PROVIDED .......................................................................................... 163.3 PERFORMANCE OF BIOFUEL BUSINESSES ...................................................... 173.3.1 Biofuel Production Levels ..................................................................................... 183.3.2 Benefits of Rural People from Jatropha Programmes .......................................... 213 3 3 Impact on Land Use and Tenure 21


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5.1 OUT GROWER SCHEMES .................................................................................... 315.2 PRODUCTION ........................................................................................................ 325.2.1 Biofuel Crop and Varieties Being Grown ............................................................ 325.2.2 Period of Growing the Crop ................................................................................ 325.2.3 Companies Contracting Farmers and Types of Contracts .................................. 335.2.4 Hectares Contracted and Plants Grown ............................................................. 345.2.5 Uses of Jatropha Seed ....................................................................................... 355.2.6 Expansion Plans ................................................................................................. 355.2.7 Benefits of Biofuel Production .............................................................................. 375.2.8 Problems Encountered ....................................................................................... 385.3 NATURE AND LEGAL IMPLICATION OF CONTRACTS ................................... 385.3.1 Length of Contracts with Companies .................................................................. 385.3.2 Legal Entitlements in the Contract ...................................................................... 395.4 PATTERN OF GROWING FEED STOCK .......................................................... 405.5 POTENTIAL CROPS FOR BIOFUELS ............................................................... 415.6 PRODUCTION CONSTRAINTS.............................................................................. 425.7 CAUSES FOR INADEQUATE PROCESSING AMONG SMALE SCALE FARMERS445.8 FARMERS INVOLVEMENT IN DECESION MAKING ............................................ 45CHAPTER SIX .............................................................................................................. 486 0 IMPACT OF BIOFUEL INDUSTRY ON LAND RIGHTS 48


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7.5 BENEFITS OF BIOFUEL PRODUCTION ........................................................... 53CHAPTER EIGHT ......................................................................................................... 548.0 CONCLUSION AND RECOMMENDATIONS ......................................................... 548.1 CONCLUSIONS ................................................................................................. 548.2 RECOMMENDATIONS ...................................................................................... 56REFERENCES .............................................................................................................. 59APPENDIX 1: LIST OF ENUMERATORS .................................................................... 63APPENDIX 2: STAKEHOLDERS INTERVIEWED ...................................................... 64APPENDIX 3: GM FOR JATROPHA ............................................................................ 65


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LIST OF TABLES

Table 1: Organisations Promoting Jatropha Production ................................................ 14

Table 2: Jatropha Farmer Distribution ........................................................................... 16

Table 3: Soap Production List and Quantities ............................................................... 20

Table 4: Bio Fertilizer Production List ............................................................................ 21

Table 5: GM at Fossil Fuel Pump Price ......................................................................... 37

Table 7: Bio Diesel Projections ..................................................................................... 40

Table 8: Projections for Bio-ethanol needs in Zambia ................................................... 41

Table 9: Preferred potential crops for biofuels in Zambia .............................................. 41

Table 10: Sources of Labour ......................................................................................... 43

Table 11: Farmers rating of participation in the Biofuel Industry ................................... 46

LIST OF FIGURES

Figure 1: Biofuel Options ................................................................................................ 1

Figure 3: Distribution of Respondents in Districts ........................................................... 5

Figure 4: A Comparison of Out Grower Companies Activities ..................................... 23

Figure 5: Common Challenges Faced by Organisations Supporting ............................. 24

Figure 6: Distribution of Jatropha Hectarage Among Target Group 34
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CHAPTER 1

1.0 INTRODUCTION

1.1 BACKGROUND

There has been an unprecedented increase in the promotion of renewable energy since the

adoption of the Kyoto Protocol in 1997 (UNFCC, 2007:3). The growth in interest in

renewable energy has been observed both in developed and developing countries.

Similarly, an increase in the number of countries formulating or changing policies to tackle

renewable energy issues has been recorded over the past decade. Different governments

have opted for a wide range of renewable energy considerations from wind, solar PV, solar

hot water and bio fuels. The majority of developing nations involved in renewable energy

promotion have opted for

biofuels. Governments

have different reasons for

promoting these biofuels.

Some governments

envisage increased use of

bio fuels as one of the ways Figure 1: Courtesy of REN21, 2007


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models on the other. At policy level, Zambia is considering to produce both biodiesel and

bioethanol. The proposed feedstock will be sugarcane and sweet sorghum for bioethanol;

and palm oil, soyabeans and jatropha for biodiesel. There is a strong drive towards

promotion of jatropha as the main feed stock for biodiesel in Zambia. However, due to the

infancy of the biofuel industry in the country, productivity and crop husbandry techniques

are still largely in the experimental stage. Nevertheless various structured outgrower

schemes and extension programmes being developed to support jatropha production

among small scale farmers. Civil society and other concerned stakeholders would like to

ensure that the small scale farmers benefit equitably from the biofuel industry, unlike what

transpired during the previously failed promotions of paprika and castor bean outgrower

schemes.

The Ministry of Energy and Water Development (MEWD) has developed a draft Zambian

Biofuels Industry Strategy which indicates governments desire to create an industry that

meets strategic energy needs while contributing to significant rural development, and to

ensure that bio fuel production is carried out in an efficient and sustainable manner so as to

derive maximum benefits to the people of Zambia. The Biofuels Association of Zambia

(BAZ) and private investors have been engaging government to accelerate the provision of

incentives, investment and policy guidelines to establish the industry. In as much as it is the

interest of everyone to undertake the biofuel industry from the business point view Civil


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biofuels industry in Zambia. This is a report of the analysis which was undertaken from

September 2009 to March 2010.

1.2 OBJECTIVES OF THE ANALYSIS

1.2.1 Overall Objective

The overall objective for the biofuel analysis was to establish the status of the biofuel

industry in Zambia with the view to promote equitable development of the industry amongst

all stakeholders including the rural farmers.

1.2.2 Specific Objectives

Specific objectives for the analysis are as follows:

i. To collect and analyse general Information on the biofuels industry in Zambia

ii. To establish interventions by government and other stakeholders in the biofuels

industry

iii. To establish the nature for biofuels out grower schemes with respect to production,

processing, marketing, extension services, contracts, organization of the scheme

and of the biofuel feedstock.

iv. To ascertain the impact of biofuels industry on food security and land, its use, rights

and tenure


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processors. The questionnaire for small scale farmers was pre-tested by the trained

enumerators (see appendix 1) and adjusted accordingly.

The field work commenced with the training of enumerators in conducting interviews to the

sampled smallholder farmers. The training provided an understanding of the data collecting

instruments and processes. The purpose of the training was to reduce on errors in data

collection.

All the above-mentioned data collection tools were employed to provide for triangulation of

information collected. Focused group discussions were used to get a general view of the

socio-economic status of the biofuel industry in the target areas.

1.3.2 Target Area

The survey purposively selected the Northern, Central and Southern provinces for data

collection. A total of six districts were selected as outlined below:

Chinsali and Mungwi in Northern Province

Mkushi and Mumbwa in Central Province Choma and Monze in Southern Province


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1.3.4 Sampling Methods

Sampling for the district was done purposively while farmer respondents were selected by

simple random sampling. The target provinces and districts as well as the key informants

and participating companies were chosen for their active participation in biodiesel activities.

1.3.5 Data Validation and Entry

A total of two hundred and seventy three (273) respondents were interviewed. The data

was coded, cleaned and entered into the Statistical Package for Social Scientists (SPSS)

by an experienced data entry clerk. The data was finally analysed by a professional and

experienced consultant in SPSS. Qualitative data tables were generated for analysis by the

researchers.


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1.4.1 Unwilling Respondents.

Some key informants like the Ministry of land and the Zambia National Farmers Union could

not give information and or officers were not always available to give information. This

made the data collection difficult as some of these were key in the understanding of the

biofuel situation in the country.

1.4.2 Obsolete Information

When the small scale farmers were interviewed, they were expectant and unless one

probes, they gave information that obtained in the early stages of the jatropha outgrower

programme in Zambia when large companies were available to give full support. Such

information was not only obsolete but unreliable.


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CHAPTER TWO

2.0 LITERATURE REVIEW: OVERVIEW OF THE BIOFUEL INDUSTRY

2.1 BACKGROUND INFORMATION

2.1.1 Definition

Biofuels have been defined in several ways depending on what is the most common

understanding within a locality or the scientific understanding of the issues involved

(Solway, 2007). The definition has also depended on the subject matter inclination of the

concerned organization or individuals. Environmentalists have referred to biofuels as any

fuel sourced from living matter with a view to preserve the environment while providinghuman needs from the ecology. The Alternative Energy News Network (www.alternative-

energy-news.info/technology/biofuel ) for example accepts any fuel as biofuels only when

sourced from at least 80% renewable materials. Many industrialists refer to biofuels as any

solid, liquid or gaseous source of energy produced from bio-renewable or combustible

renewable feedstock (Demirbas, 86:2009; Scragg, 62-136:2009). The Worldwatch Institute

(2007) definition states that biofuels are liquid fuels made from organic matter typically

crops. This report restricts itself to the Worldwatch definition as this is more contemporary
http://www.alternative-energy-news.info/technology/biofuelhttp://www.alternative-energy-news.info/technology/biofuelhttp://www.alternative-energy-news.info/technology/biofuelhttp://www.alternative-energy-news.info/technology/biofuelhttp://www.alternative-energy-news.info/technology/biofuelhttp://www.alternative-energy-news.info/technology/biofuel


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the fourth generation biofuels was muted by British researchers that sought to improve CO2

up take and sequestration by plants (Clark, 2008; Trapp, 2009:39).

The most populous classification of biofuels has been according to intended use; as bio-

ethanol- a target replacement for petrol/gasoline or as biodiesel- a target replacement for

fossil diesel. Bio-ethanol is derived from sugars found in crops while biodiesel is derived

from oil crops.

2.1.3 Feed stock

Feedstock used for the biofuels depends on whether the energy required is biodiesel or bio

ethanol. Generally, oil crops like soyabeans,

groundnuts, palm oil, and jatropha are used forbiodiesel while crops and substrates with

carbohydrates and sugars are used for bio ethanol

worldwide. Picture 1 shows the nursery for a Chinsali

small scale farmer. Picture 1: A Jatropha Nursery in

Chinsali


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between countries that have national programs in bio-energy research, development and

deployment. The U.N. International Biofuels Forum is comprised of Brazil, China, India,

South Africa, the United States and the European Commission.

2.2.2 Biofuel Potential

The Renewable Energy Network 21 (2007) reports an incredible increase in biofuel use

between 2000 and 2007, with bio-ethanol production reaching a staggering 40 billion liters

production worldwide. Scragg (2009) and Demirbas (2009) postulates that the biofuel

industry may take over the fuel industry if well managed. With an estimated 46 billion liters

of biofuel produced over a short period of time worldwide, biofuels technology is said to be

a single largest contribution of biotechnology to human development in the recent couple of

decades (Olssen and Ahring 2007:98). It is not an underestimation that biofuels are on anincrease worldwide and may overtake fossil fuel supplies with time. The future is open for

biofuel development and with the increasing acceptance of the biofuel as alternative fuel

source to fossil fuels, the looked for fuel security may not be farfetched. However, as

Furfari (2008:39-41) cautions, care has to be taken in implementing biofuel production as

theories and postulates do not always turn into reality. Potential for biofuel growth of

production and for income generation is high.


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2.3 ISSUES WITH BIOFUELS

Without doubt there are both positive and negative arguments about impact of biofuels on

various human endeavors and their environment. Among the most discussed include

biofuels impact on food security and the environment, land and water. Another dimension is

the impact of biofuels on the social and economic welfare of people. While some support

biofuels as environmentally friendly, others think biofuels are environmentally unfriendly.

Others still argue that biofuel can be used to fight poverty.

2.3.1Biofuels on Socio-economic Development

The importance of fuel energy to development cannot be overemphasized. The most

common areas of debate under this discussion are issues relating income and food

security.

Biofuels and Food Security

One of the most contentious issues on biofuels is its impact on food security. Beggs

(2009:80) contend that the 2007 escalation of food prices in the US were due to shift of

some land from food production to corn for biofuels. It has been argued by many

development experts that cultivation of biofuel feedstock cannot avoid taking up land

i l d f f d d ti th f d t l l k f i i l d t


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2.3.2 Environmental Impact and Biodiversity

Biofuels derive their feedstock from crops grown on new land or land previously put to other

crops. The effect of biofuels on the environment may be observed from its role in climate

change fight and during production of feedstock.

Biofuels and Climate Change.

Some professionals argue that biofuels are not all roses when related to the science of

climate change because production of the biofuels energy makes use of climatically

condemned fossil fuels i.e. 0.77 units of fossil fuel is used to produce 1 unit of ethanol, and

0.4 units for biodiesel energy (Beggs, 2009:79). However, many agree that as long as a

favorable carbon balance towards environmental sensitivity is maintained in the growing

and production of biofuels, then the biofuels are climate friendly (Maphosa, 2008).

Environment and biodiversity

It is almost inevitable that biofuel production disturb the environment and biodiversity. As

Tabak (2009) argues, production of biofuel will either use land previously used by other

crops and purposes or will use newly cleared land opened solely for the production of

biofuel feedstock. When new area is cleared off the vegetation, biodiversity is lost and the

area is predisposed to other weathering processes that contribute to the loss of natural

niche for stable ecosystem.


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other use. Countries should be weary of the requests for big tracts of land for other use. In

Tanzania, there have been requests for 50 100,000 hectares of land when only 5

25,000 hectares have been in use (Green Facts, 2010). Although land is an issue in

developed and some developing countries, Professor Sinkala (2009) and the Biofuels

Association in Zambia argue that there is sufficient land for Zambia to meet biofuel need

and this can be produced wholly in the country. In this regard caution should be practiced

when getting appeals for large tracts of land for biofuels production. Rather than rush into

agreements that will just meet raw material needs for foreign countries, the benefits for the

local people should be considered too.

2.3.3 Impact on Women and Children

There isnt much study done on impact of biofuels on gender. Rossi and Lambrou (2008)

indicated in their FAO commissioned study that biofuels impact gender through changesthey exerted on the environment and socio-economic structures. The large scale clearance

of land and processes of oil production may be a source of employment and income, but

they may also replace land for food production thereby infringing on the food security in

rural areas. Rossi and Lambrou (2008) argue that due to differentiated roles men and

women have in production and due to unequal access to land between men and women,

biofuels may exert pressure on those with access to land to reallocate pieces of land given

to women for biofuels.


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CHAPTER THREE

3.0 FINDINGS ON BIOFUEL PROCESSING COMPANIES OPERATING IN ZAMBIA

This chapter gives a brief background to the biofuel companies in the study areas in

Zambia. It also analyses the operations of these companies and their interaction with the

smallholder farmers that are involved in the biofuel industry. Emphasis is made here that allthe companies interviewed focused their promotions on jatropha production as the main

feedstock for biofuel.

3.1 NATURE OF COMPANIES

The companies involved in biofuel production were motivated to go into the industry for

profits because of the emerging messages about great wealth hidden in green fuels.

The survey identified eight organizations operating in the study areas classified as

community based cottage industries; community based women and youth associations;

medium scale commercial processors and large-scale commercial processors. There is an

interest in the industry by both indigenous and foreign investors. However, some

respondents indicated having links with other large-scale commercial out-grower companies

h M li I t t O l Bi f l d D1 Oil


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Table 1: Organisations Promoting Jatropha Production

Organisation Location Hectare No. Of

Farmers

Bruno Jatropha Limited

in Lusaka

Lusaka 4 -

Moskas Lusaka 35 15

Southern Bio Power Choma 250 3000

Wamalema Enterprise Chinsali 2 40

Ifyishali Fintu

Enterprise

Chinsali - -

Twasanga Youth and

Women Association

Mungwi 4 15

Mulondolwa Enterprise Mungwi 100 50

TOTALS 395

(Source: Field Survey, 2009)

3.1.1 Reasons for Engaging in Jatropha Production

The survey found out that eighty eight percent (88%) of the organizations were involved in


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However, large-scale promotion of jatropha production is very recent in Zambia. Although

there has been ardent promotion of jatropha, much of that

was based on what has been read or heard about jatropha

and its potential. For most of the companies interviewed,

they had more theoretical knowledge than experience on

jatropha production. Most of what the organisations

promoted was based on what they had heard other than

what they had really experienced. This finding is congruent

with the fact that jatropha production on a large organised

scale is relatively a new feature in Zambia. Therefore,

caution should be exercised in the credibility (scientifically) of the source and use of

Jatropha information before full-scale dissemination to small-scale farmers is effected.

3.2 FEEDSTOCK PRODUCTION ARRANGEMENTS

Most of the organizations (62.5%) in the target area had contracted local small-scale

farmers to produce jatropha for them. The contracts were done under out-grower schemearrangement. Other organizations grew their own Jatropha.

Picture 3: Jatopha Seed


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Table 2: Jatropha Farmer Distribution

Organization

Farmers

contracted Percent

Moskas , Lusaka 15 0.5

Southern Bio Power

Lusaka 3,000 96.2

Wamalema Enterprise,

Chinsali 40 1.3

Ifyishali Fintu Enterprise,

Chinsali - -

Twasanga Youth and

Women Assoc. Mungwi 15 0.5

Mulondolwa Enterprise,

Mungwi 50 1.6

TOTALS 3120 100


3.3 SERVICES PROVIDED

Services provided by companies varied with the contract and depending on the capacity of


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Figure 3: Services Provided by Companies (Source: Field Survey, 2009)

Although the organisations felt they had rendered adequate services, farmers felt that they

were not well supported, especially in terms of extension visits and learning, an indication of

poor service provision. The survey also reveals that farmers need the following services:

loans (37.5%), support for market outlets (12.5%), training (12.5%), and chemicals (12.5%).


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and perceived increase in jatropha production among local organizations from Chinsali and

Mungwi. Most of these were small scale producers and processors of jatropha. Small scale

jatropha processing provides one opportunity for increased jatropha crude oil production.

The crude oil may then be sold to emerging large green oil industries for final processing

into usable oil.

Southern Bio-Power on the other hand was scaling down on the jatropha business

because of reduction in fuel prices, low GRZ support and high Investment Costs. Other

organisations that saw the business scaling down mentioned lack of seeds (local company

from Chinsali) inadequacy of the hand oil press used for processing jatropha (local

company from Mungwi) and perceived government poor support to the sector by

government. Figure 4 shows outlook of jatropha organisation performance.


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i. bio-oil which totalled 5,150 litres in 2008 and 13,431 litres in 2009 with a total

projection of 120,570 litres in 2010. Southern Bio Power produced most of this oil

(74.5% in 2008 and 97% in 2009)

ii. soap which totalled 352 tablets in 2008, 5, 096 tablets in 2009 with a projection of

420,120 tablets in 2010. Malondolwa produces most of this product (94.2% in

2009).

iii. Insignificant quantities of fertiliser are produced by two companies

As figure 5 below illustrates, a drastic drop in biofuel oil production was observed in the

study areas. The trend was incongruent with the nations plans to increase production to

levels that can allow for a 10% blending ratio by 2010. The drop in the oil production was

seen more among big companies than smaller ones.


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pump prices started showing a downward trend. D1 oils, which has a record holding of 25%

of the total jatropha fields globally (http://www.d1plc.com/news.php?article=176 ), has closed

down production in Zambia and has remained only with research.

It was interesting to note that soap and fertiliser production among the small companies

was increasing and gave huge leaps in estimates for 2010.

Picture 5: Bars of soap locally made from jatropha

The local small scale farmers in Northern province of Zambia have learnt to process the

jatropha into different product like soap shown in picture 5 above.

Table 3: Soap Production List and Quantities

Organisation Product 2008 2009 2010
http://www.d1plc.com/news.php?article=176http://www.d1plc.com/news.php?article=176http://www.d1plc.com/news.php?article=176http://www.d1plc.com/news.php?article=176


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Table 4: Bio Fertilizer Production List

Organisation Product 2008 2009 2010

Twasanga Fertiliser (kg) 50 2.5 0

Ifishalifintu Fertiliser (kg) 10 15 200

Totals

Fertilisers

total 60 17.5 200


3.3.2 Benefits of Rural People from Jatropha Programmes

The organisations interviewed stated that men (62.5%) benefited more than women and

children (37.5%) from the current engagement of local people. The main benefits to farmersinclude: employment, input support, guaranteed markets and grants for community projects.

Although local people and organisations promoting jatropha talked of increased income

among local people, it was difficult to prove this because there was not costing exercises

done to show that local farmers made any profit from growing Jatropha.

There is no doubt that a well organised and pro-poor biofuel industry would benefit the local

people. However, such programmes must assure the rural communities equitable pricing


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little indication of abuse of local peoples land rights in the study areas. The little indication

arises from the fact that some of the organizations own land under customary land tenure.

However, the contracts signed by some companies with the local farmers, bound the

farmers to the contracting companies for long periods of up to thirty years. This could meant

that the land would be put to no other use than jatropha production regardless of whether

the crop gave profits to the land owner or not. Although no company had imposed its

contractual benefits to any defaulting farmers on this point, this was only because the

companies were the first ones to withdraw or scale down on jatropha production. The thirty

years plus contracts inherently takes away the right to land from the local legal owners for

the period the contract is in force. Precaution needs to be taken in this regard to ensure that

small-scale farmers, most of whom do not appreciate the consequences of such long

contract on land, are protected from possible future abuse.

The study found some foreign investors seeking land in large portions purportedly for the

production of biofuels. However, there was no chiefdom in the study area that had given

any huge tract of land by the time of the study.

3.4 NATURE AND LEGAL IMPLICATIONS OF CONTRACTS

Figure 7: below shows different ways in which the contracts are signed between farmers

and companies. While some companies offer guaranteed market (62.5%) others have


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Figure 3: A Comparison of Out Grower Companies Activities (Source: Field Survey, 2009)

The following are the implications to the company if a company does not meet obligation

within the contractual arrangements: farmers would complain to government (12.5%),

farmers would sell elsewhere (12.5%), would just end contracted partnership (12.5%),

farmers would complain to the local chief (12.5), farmers would complain to local authority

(12.5%) and 37.5% would do nothing. On the other hand the companies will do the

following if farmers failed to meet their obligations: non applicable (50%), nothing (25%),

complain to the chief (12.5%) and sue (25%)


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Figure 4: Common Challenges Faced by Organisations SupportingJatropha Production (Source: Field Survey, 2009)

Limited infrastructure was the challenge faced by most companies promoting production of

biofuels. The infrastructure included such physical items as roads, storage and bulking

facilities, plant and extractive equipment, as well as communication systems. Poor roads

presented one of the greatest barriers to expansion of jatropha production into the rural


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CHAPTER FOUR

4.0 INTERVENTION BY GOVERNMENT AND OTHER STAKEHOLDERS IN BIOFUEL

INDUSTRY

There are a number of institutions participating in the biofuel industry in Zambia. For this

study only the following institutions were contacted and visited to obtain some information

on biofuels and the roles they play: Ministry of Energy and Water Development; Ministry ofAgriculture and Cooperatives; Ministry of Lands; Ministry of Tourism, Environment and

Natural Resources (Forestry Department); Ministry of Commerce, Trade and Industry;

Energy Regulation Board (ERB); Zambia Development Agency (ZDA); Biofuels Association

of Zambia; and Zambia National Farmers Union.

The institutions visited contributed to the understanding of the role of government and policy

issues affecting the biofuel industry in Zambia. The findings have been divided into five

sections relating to policies, institution landscape, project profile, marketing and government

fiscal investment.

4.1 NATIONAL POLICIES, GUIDELINES AND LEGISLATIVE FRAMEWORK

Th Z bi t h h i t t i th bi f l t f it bli


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meeting some of the countrys energy requirements. Government further hopes that the

biofuel industry could be a part solution to the improvement of incomes among rural small-

scale farmers. Thus, the national energy policy states among other things that government

will support investments in biofuels through appropriate incentives so that energy crops are

cultivated by farmers and local investors from which ethanol and bio-diesel may be

produced.

Furthermore, the energy policy aims at providing a regulatory framework for the biofuel sub-

sector, so as to maintain standards and ensure environmental protection. In this vein the

Government of the Republic of Zambia passed a Statutory Instrument No. 42 in 2008 which

legalizes biofuels and in which the Energy Regulation Board (ERB) is to set guidelines,

standards and regulations in this sub-sector.

It is hoped that if the biofuel industry takes off, with sufficient feed stock being produced in

the country to meet requirements for blending ratio of about 10%, costs of importing fossil

fuels may be cut down (ERB Newsletter, 2008:17). Notwithstanding the interest in biofuels,

practical situation as found by the study could not support fuel blending ratio beyond five

percent (5%) for biodiesel.

The governments future plans are that ethanol be used as a blend with petrol while bio-


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4.2 INSTITUTIONAL LANDSCAPE AND SUPPORT SERVICES PROVIDERS

Apart from the Ministry of Energy and Water Development, there are other institutions that

are giving support to the promotion of the biofuel industry. The Ministry of Commerce,

Trade and Industry does not a specific policy on biofuels, but rather follows that national

Energy Policy and biofuel strategy under the Ministry of Energy and Water Development.

The ministry promotes investment into the biofuel sector, and entices investors to

participate in the sub sector.

While the Forestry Department promotes the planting of tree crops by small-scale farmers,

survey revealed that the planting of Jatropha was not being promoted by the department

since the questions on environmental effect of the crop were raised during the tenure of the

former and late president Dr. Patrick Levy Mwanawasa SC. At that time, there were fears

that Jatropha takes up most of the soil nutrients and this could undermine the quality of soil

for indigenous tree crops. Therefore, the department was not promoting the biofuel crop in

question until extensive research was undertaken to clear the air.

An interview at the Ministry of Agriculture and Cooperatives (MACO) revealed that the

Ministry was promoting the cultivation of biofuel crops as well as food crops. Although there

was no specific policy on biofuel crops the Ministry under its National Agricultural Policy


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food crops. If such competition occurs, then MACO fears that household food security of

the small-scale farmers would be threatened. However, this fear may be short-lived as

small scale farmers are likely to revert to other crop production (including food crops) when

they continuously get no greater benefits than promised. The current price levels of 1000 to

3000 kwacha per kg are extremely low for the farmers and any further increase would be

too high for support companies to make any meaningful profits.

The Zambia Development Agency (ZDA) promotes investment by facilitating access to land

by investors. The agency facilitates visitations for potential investors to investment

destinations as well acquisition of land for investment.

Revelations are that the interest of the Ministry of Lands is not just in the allocation of land

for the promotion of biofuels but also for other social and economic purposes. The role of

the Ministry of Lands in the promotion of the biofuel industry cannot and should not be

underestimated. Although the Ministry of Lands claims less responsibility over biofuel

industry concerns because they give land for general purpose (Permanent Secretary MoL,

2009).

Similarly, information with ZNFU was difficult to obtain because no staff was available for

consultations The stance of the two important institutions was an indication of the little


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recession. But when it was producing bio-diesel, it obtained most of its Jatropha seed from

out-grower schemes mainly from the Eastern Province; and the company had a total of

6,000 ha. of Jatropha. The going under of Oval Biofuels and other big companies like BP

D1, left the farmers in the cold. It may be difficult to re-engage the farmers again.

Oval Biofuels used to purchase the seed and then transport it to the factory in Lusaka

where oil was extracted. At the plant the company had capacity to refine 3,000 litres of bio-

diesel per day using a bio-diesel Ageratech machine though this was not utilized to full due

to low supplies of jatropha.

The ERB reported (ERB Newsletter, 2009) that nothing was wasted from the biofuel

extraction process, as the company was able to obtain other by-products from jatropha,

such as bathing soap, glycerine and candles. The remaining cake was used as manure

and was usually distributed back to the out growers. The bio-diesel that was obtained was

then distributed to the company clients who used it on a trial basis in various light vehicles

and generators. It was reported that the company did not experience any problems with the

company vehicles that were using the bio-diesel that it was producing.

Other stakeholders have shown interest in biofuel production. It was reported that

Kansanshi Mine in Solwezi has embarked on the bio-diesel project involving surrounding


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4.4 MARKETING STRATEGIES FOR BIOFUELS

GRZ hopes that companies providing the out grower schemes would in the short run

provide market for the jatropha that they are promoting (Principle Tree Officer at Ministry of

Agriculture, 2009). If this is done, then small-scale farmers will benefit from participating in

out-grower schemes through income generation.

With respect to the role of government in providing coordinated marketing strategies for

biofuels, it could be argued that should the biofuel industry take off, the private sector will

have to rise to the occasion and play its role, as long as government gives incentives and

guidelines to regulate the sector through the Energy Regulation Board.


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CHAPTER FIVE

5.0 FINDINGS ON THE OUT-GROWER SCHEMES

The status and dynamics of Biofuels crop production are the focus of this chapter. The

chapter analyses how production is organized and managed to reach out to the small-scale

farmers. It also analyses production levels, contracts, processing and marketing of biofuel

crops with emphasis on jatropha.

5.1 OUT GROWER SCHEMES

The production of biofuel feedstock is generally done through outgrower schemes that can

be classified into three major categories namely:

i. Small scale out grower schemes.

These are individuals that may or may not be registered as companies, but have

identified gaps in the production chain of jatropha. They either provide seed and/or

some extension support to their clients

ii. Medium Scale out grower schemes. These are run by small companies and are

mostly local Zambian by origin and support not more than 50 farmers. Medium Scale

out grower schemes are characterized by low investment dependent on loans from

lending institutions

iii L S l O t G S h Th l di th t


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5.2 PRODUCTION

5.2.1 Biofuel Crop and Varieties Being Grown

In Zambia, two sets of crops have been identified as biofuel feedstock depending on

whether the crop is for bioethanol or biodiesel. Oil crops like soya beans; sunflower,

groundnuts, palm oil and jatropha have been identified as potential feedstock for biodiesel.

On the other hand starchy and sweet crops like sweet sorghum and sugar cane have been

identified as potential feedstock for bio-ethanol. The assessment established that Jatrophais currently the main feedstock being grown. Two cultivars have been propagated in

Zambia, a locally domesticated cultivar and a Cape Verde cultivar. None of the cultivars

grown is a hybrid, explaining another reason why productivity is low among jatropha

growers. Although 88.2% of the farmers interviewed indicated that they grew only one

variety of Jatropha, they did not know the variety.

The current yield levels are not lucrative enough to enable small-scale farmers make a

living from Jatropha. Improving productivity has a bearing on whether jatropha will be

profitable for the small-scale farmers under out-grower schemes. D1 Oils Plant Science is

investigating one variety called E1 for potential yields and localization in Zambia. This is

also sourced from Cape Verde Island.


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5.2.3 Companies Contracting Farmers and Types of Contracts

The assessment revealed that 57% of the small-scale farmers that grew Jatropha did so

under contracts, the rest did not have contracts but had Jatropha under production. Figure 9

below shows the distribution of contracted farmers by companies. From the distribution, it

can noted that Marli Investment, Oval Oils, D1 Oils and Southern Bio Power had the

majority of farmers under contracts.


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5.2.4 Hectares Contracted and Plants Grown

The study areas gave a total of 3100 hectares of Jatropha fields. Other data collected

during the survey, however, indicated that there could be a total of 10,000 hectares planted

of Jatropha Zambia.

Figure 5: Distribution of Jatropha Hectarage Among Target Group

Source: Field Survey, 2009

As may be seen from figure 5 above more than 80% of the farmers grew less than 2 ha ofjatropha. This is typical of the scale of land put to jatropha production in other study areas in

Zambia (Kayula & Chitah, 2009; Kayula, 2009). The size of land allocated to jatropha has


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5.2.5 Uses of Jatropha Seed

It was discovered that 34.4% of farmers sold Jatropha seed, 9.4% processed the seed into

oil, 1.6% gave as seed to other farmers and 54.7% of the farmers had either not started

harvesting or did not know what to do with the seed. It is unfortunate that only 9.4% of the

farmers processed jatropha seed into other products like oil before disposing off the

products. Of the farmers that sold the seed, 21.6% sold to processing companies, 21.6%

sold to other farmers and 56.8% sold to other buyers. See figure 10 for use of seed among

small-scale farmers.


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make more money, economic potential, economic benefits, income generation, more

profitable in future, to have many plants, growing industry in Zambia and guaranteed

market.

Figure 7: Reasons for Intension to Expand Jatropha Fields (Source: Field Survey, 2009)

On the other hand some farmers indicated lack of willingness to expand jatropha fields due

to the following reasons: did not find any benefits, there was no market, no support, the

inadequate information, uncertainty of people involved and disappointments from previous


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Table 5: GM at Fossil Fuel Pump Price

Item Unit Qty Unit Cost Cost Qty Unit Cost Cost Qty Unit Cost Cost

Income

Seed sales Kg 500 500 250 000.00ZMK 5000 0 -ZMK 8000 0 -ZMK

Oil (lit) 650 6100 3 965 000.00ZMK 1040 6100 6 344 000.00ZMK

T Income 250 000.00ZMK 3 965 000.00ZMK 6 344 000.00ZMK

Expenses

Seed Kg 5 3000 15 000.00ZMK 5 3000 15 000.00ZMK 5 3000 15 000.00ZMK

Fertiliser 50 Kg 0 0 -ZMK 4 270000 1 080 000.00ZMK 5 270000 1 350 000.00ZMK

Labour Mandays 0 0 -ZMK 100 10000 1 000 000.00ZMK 150 10000 1 500 000.00ZMK

Transport Lampsome 20 2000 40 000.00ZMK 100 2000 200 000.00ZMK 160 2000 320 000.00ZMK

Packaging No. 20 2000 40 000.00ZMK 100 2000 200 000.00ZMK 160 2000 320 000.00ZMK

Land Preparation Ha 1 200000 200 000.00ZMK 1 270000 270 000.00ZMK 1 300000 300 000.00ZMK

-ZMK -ZMK -ZMK

-ZMK -ZMK -ZMK

-ZMK -ZMK -ZMK

-ZMK -ZMK -ZMK

295 000.00ZMK 2 765 000.00ZMK 3 805 000.00ZMK

-45 000.00ZMK 1 200 000.00ZMK 2 539 000.00ZMK

Small Scale Improved Commercial

Gross Margin

Total Cost

Table 6 shows the comparison between traditional farming method and improved management and

commercial methods where there jatropha is processed on farm. (Source: Adapted from Freim, 2008)

As may be noticed from the gross margins in table 6, it is difficult to make profit from

jatropha production when it is priced at 8% of the fossil fuel pump price. In fact the table

analyzed reveals that Jatropha production at small-scale level is not as profitable as is

promoted by some outgrower companies. If biofuels would be used to improve the

livelihoods of the small-scale farmers it will largely not be from the profits from sale of


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the following benefits: business prospects (12.8%), Jatropha does not need a lot of fertiliser

(2.6%), financial empowerment (0.4%), sale and domestic use of soap, lighting oil and

organic fertilizer (21.6%). A total of 22.0% stated no success, 7.7% have not yet seen

success and 32.2% of the farmers did not state.

5.2.8 Problems Encountered

There are a number of challenges faced by farmers in the bio fuel production. The following

were the main problems: 20.1% of the farmers stated that labour constraints particularlywhen demand for labour clashes with the labour demand for food crop production, 31.5%

cited termites attacks on jatropha and 34.8% cited difficulties in weeding. Other issues

pattern to prevalence of bush fires (0.4%), inadequate technical knowledge (0.4%),

inadequate machinery for processing (0.4%), inadequate information on suppliers of inputs

and markets (0.7%), lack of hybrid seeds for improved yields (0.7%) and inadequate

support from government (0.4%).

5.3 NATURE AND LEGAL IMPLICATION OF CONTRACTS

5.3.1 Length of Contracts with Companies

A total of 34.1% farmers interviewed had contracts of less than 5 years, 21.0% hadcontracts of 6 to 10 years, 15.2% had contracts of 11 to 20 years, 7.2% had contracts of 21

to 30 years and 22 5% had contracts of more than 30 years


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contracting companies, had authority to insist that the farmland be put to jatropha

production for the period of the contract regardless of the economic benefits to the farmer.

5.3.2 Legal Entitlements in the Contract

The out grower managers endeavored to include in the contract clauses that were meant to

protect their investment as well as take care of major complaints by the farmers. The

following are some of the major issues covered by the contracts:

i. Farmers produce to be sold exclusively to the contracting company (82.2%)

ii. Contracting company to provide extension services (27.0%)

iii. Contracting company to provide inputs (21.7%) and

iv. Contracting company to provide cash allowance if a farmer grows more than 5ha

(55.4%)

The contracts also carry the penalties to be imposed on any one side that fails to keep to

the contents of the contract. These penalties include:

i. The farmer to sue the contracting company (17.2%), though it was clear that farmers

did not know how to effect litigation measures against contracting companies

ii. The farmers to complain to government (30.5%), even though government takes


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5.4 PATTERN OF GROWING FEED STOCK

Land Under Biofuel Crops

At the moment, there is no accurate information on the total amount of land under biofuel

production. On average, the farmers interviewed had less than 1ha put to jatropha. Women

had slightly larger hectarage than men on average. Whereas those under out grower

programmes planted pure crop stand, others planted hedges to fence off other crops or

homesteads.

The Ministry of Energy and Water development (Biofuel strategy, 2005) projects about 64

million liters of bio diesel and about 40 million litres of bio-ethanol consumption per year by

2010. (See table 6 & 7 respectively).

Table 6: Bio Diesel Projections

Year Diesel Sales

Volume

5%

Blend

10%

Blend

15%

Blend

20%

Blend

Million Litres

2004 311.880 15.594 31.188 46.783 62.377

2005 327.482 16.374 32.748 49.122 65.496

2006 343.856 17.192 34.385 51.578 68.771


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Table 7: Projections for Bio-ethanol needs in Zambia

Year Petro Sales

Volume

10%

Blend

15%

Blend

20%

Blend

2004 159.777 15.977 23.966 31.955

2005 167.765 16.776 25.164 33.553

2006 176.154 17.615 26.423 35.23

2007 184.961 18.496 27.744 36.992

2008 194.209 19.42 29.131 38.8412009 203.92 20.392 30.588 40.784

2010 203.92 21.411 32.117 42.823

Source: Bio Fuel Strategy for Zambia, 2005

5.5 POTENTIAL CROPS FOR BIOFUELS

There are a number of crops that can be used as biofuel feedstock in Zambia. Table 8

below shows different potential crops for biofuel.

Table 8: Preferred potential crops for biofuels in Zambia

Crop Biofuel Type Comment

Jatropha Diesel Preferred, non edible

Soya beans Diesel High oil content but edible


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security. The possibilities of diverting food crops to biofuel production are high, especially if

the biodiesel industry is seen as more lucrative. However, deliberate emphasis has been

placed by government on Jatropha for biodiesel and sweet sorghum and cane sugar for bio-

ethanol, as feedstock.

5.6 PRODUCTION CONSTRAINTS

Production of biofuel feed stock is stalked by a number of constraints that made

development of the sector very slow. The study revealed that the following concerns weremore critical for improved productivity and production of biofuels:

i. Inputs: 6.2% of the farmers indicated that the inputs required for biofuel production

were not easy to come by. Improved seed varieties and planting materials were not

available for jatropha for example. The use of recycled seed was rampant and

contributed to low productivity.

ii. Information/knowledge: 23.9% of the farmers cited information or knowledge about

biofuels as being scanty and not reliable. Each biofuel promoting agency had its own

standards of production and a set of recommended crop husbandry practices.

iii. Marketing: 6.2% of the farmers said that the marketing of jatropha was very poor to


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vi. Labour: 52.2% of the farmers indicated that labour was a major concern as it was

also required for other farm operations. Freim (2008) reports that jatropha, when

grown with other crops, creates strain on demand for labour as the farmer tend to be

busy throughout with little time for rest. For some farm operations labour needs

coincided with jatropha while at some operations it follows other crops giving little

rest for farmers. The availability of labour for energy crops was rated very adequate

(25.4%), adequate (58.3%) and not adequate (16.2%). The availability of labour for

harvesting energy crops was rated very adequate (23.2%), adequate (62.1%), and

not adequate (16.2%).

Labour for energy crops was mostly sourced from the family (95.0%), a bit (3%) from hiring

and others sources (2%). Similar trends were recorded for labour sourced for harvesting asshown in table 10. Although 98.2% denied employing labour below the age of 15 years of

age, as figure 9 below shows, 1.8% admitted to using the under 15 for labour in jatropha

production. Unfortunately, a somber 2.3% admitted to using the under 10s in jatropha

production. The trend has to be checked because 2.3 percent in such a small sample may

translate into huge numbers for the population involved in agriculture production.

Table 9: Sources of Labour


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Figure 8: Labour Use by Age Group (Source: Survey data, 2009).

5.7 CAUSES FOR INADEQUATE PROCESSING AMONG SMALE SCALE FARMERS

A total of 33.1% of respondent farmers were not involved in processing because of lack of

equipment, 25.8% did not produce enough, 12.3% lacked knowledge and skills, 0.6% were

not interested and 28.2% did not indicate their challenges in processing. See the data in

table 10.


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For the farmers that had access to processing equipment, the major types of equipment

used were hand oil press (25.0%) and machine press (62.5%) obtained mostly (45.8%) on

loan.

The farmers viewed the accessibility of the equipment as very accessible (6.8%),

accessible (14.8%), not accessible (78.4%). The following were the reasons for not

accessing the equipment: not available in local market (4.5%), no cash to purchase

(89.7%), did not know where to buy from (3.4%) and others (2.3%). Constraints faced in

processing also included lack of knowledge and information (46.2%), lack of equipment

(14.%), others (15.4%) and none (23.1%).

From the foregoing findings, it may be deduced from the above that inadequate capital and

insufficient knowledge hold back farmers from adding value to their jatropha crop. Going bythe low of gross margins levels generated when there is no value addition to jatropha, It is

important that small scale farmers are helped to process their produce at least into jatropha

oil before it is sold to outgrower scheme companies. Either companies promoting jatropha

production or government should help the small scale farmers access processing

equipment. A business model where processing plants are made available to someentrepreneurs at village or district level as is the case with harmmer mills for maize and rice,

will help small scale farmers earn better monies from jatropha growing than they are


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farmers who are involved in decision mainly through CFU (25.3%), fellow farmers (22.7%),

and MACO (1.1%).

It was not surprising to get few acknowledging adequacy of farmer involvement in decision

making. The rating of farmers involvement in biofuel trade was considered to be very

adequate (3.3%), adequate (49.3%) and not adequate (47.4%). On a good note, the trend

of farmers participation in biofuel was rated as increasing (67.7%), decreasing (11.5%) and

the same (20.0%).

Table 10: Farmers rating of participation in the Biofuel Industry

Parameter Response Total

Involved in decisions Yes 4.00%

No 96.00%

Pricing 20.00%

Policy formulation 56.70%

Demand and supplyprojections

3.30%

Involved in marketing

own products

3.30%

Other 16.70%

Why Not Involved Not consulted 17 50%


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Lupando Mwape 0.40%

Maco 1.10%

Mali Investments 1.50%

Mpinda Mwelu 0.40%

Mungwi BiofuelAssociation

0.40%

Mungwi District BioFuel Association

0.70%

Rating of farmersInvolvement in BiofuelTrade

Very adequate 3.30%Adequate 49.30%

Not adequate 47.40%

Trend of farmersparticipation in Biofuel

Increasing 67.70%

Decreasing 11.50%

Same 20.80%



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CHAPTER SIX

6.0 IMPACT OF BIOFUEL INDUSTRY ON LAND RIGHTS

6.1 CURRENT ZAMBIA LAND TENURE SYSTEM

The land cultivated by farmers for food crops is governed by customary law (97.7%),

leasehold (2.3%). For those that under leasehold, the length of lease averages 83 years.

The land under biofuel is governed by customary (96.9%) and leasehold (3.1%). The length

of lease averages 50 years. Male farmers stated an average of 42 years and female stated

an average of 99 years. The difference in average period between males and females

significantly shows the recent measures taken to allow females to own land.

Most of the land in the rural areas was acquired by allocation by headmen (49.8%), given

by parents (25.9%) or inherited from ancestors (10.9%). A few (1.6%) bought the land

while others where keeping for others, squatting or not just sure of the status of land. The

land tenure system and processes of acquiring land was sometimes not helpful for rural

investment.


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Most (75.6%) of the foreign companies obtained land from the Commissioner of Lands and

the chief (15.6%). Some rented from local people (2.2%) and the rest could not divulge

(6.6%). It was interesting to note that females inherited most of the land from ancestors or

relative than men. It was also important to note that men bought land where no women did

so.

6.3 FARMERS DENIED THEIR LAND RIGHTS

The data collected during the survey did not show indication of abrogation of land rights ofany individual. None of the farmers interviewed was aware of anyone who was displaced to

allocate land to other investors in the biofuel industry.

6.4 CRITERIA FOR ALLOCATING LAND FOR BIOFUELS

The majority of famers (88.7%) had no criteria that they used for allocating land for biofuel

production. Land was allocated according to availability (4.8%), advise by MACO (0.4%) or

depending on interest (1.5%) at the time of making the decision. A few (0.4%) allocated

land that was considered to have poor soils, but where food crops and trees grow well.


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It was common, however, for the farmers to consider the food crops that they needed in

making decision on what land was used for what crop. As Kayula and Chitah (2009)

highlight, the land allocated to jatropha vs food crops was inversely related among farmers

with small land holdings. But as the land size increased jatropha was increasing allocated

less land regardless of what size of land was allocated to the food crops.


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CHAPTER SEVEN

7.0 IMPACT OF BIOFUEL ON ENVIRONMENT AND SOCIAL ECONOMY

7.1 IMPACT OF BIOFUEL CROPS ON ENVIRONMENTS AND BIODIVERSITY

The research study found out that 70.4% of the respondent farmers did not know whether

biofuel crops had any negative effect on the environment and the biodiversity. This result

could be an indication of inadequate information on biofuel crops among small scale

farmers. It could also indicate the difficulties farmer s have to associate some of the crops

which are in fact food crops to bad effects these crops could have on the soil and the

biodiversity. Of the remaining 29.6 %, total of 22.0% indicated that biofuels had positive

and negative impact on the environment and 7.6% stated biofuels had no positive andnegative impact on the environment.

The study brought out the following as the positive impact of biofuels on environment as

learnt from promoters of biofuels:

i. add soil fertility (21.6%),ii. charcoal, income generating (17.6%), didnt know (16.8%) with more women not

knowing (26 7%) and none (24 0%)


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iv. deforestation (11.0%),

v. dominates indigenous plants (23.1%)

Major risk linked to biofuel development in Zambia were depletion of biodiversity, pollution

of ground and surface water, deforestation and soil pollution. It was , however found that

jatropha had positive impacts on the environment like improving soil fertility

It was also interesting to note thatthe majority (87.5%) of organisations did not undertake

any environmental impact assessment (EIA) on the land before using it for biofuel

production. This could mean that concern for the environment among jatropha was

considered not important. In the light of unsubstantiated fears about jatropha harming the

environment, measures should be put in place to ensure EIA are done at the beginning of

projects and during implementation of the jatropha projects.

7.2 GENDER OPPORTUNITIES AND CHALLENGES IN SMALL SCLAE BIOFUEL

PRODUCTION

7.2.1 Impact on Women and Child Labour

Women found jatropha production in a positive sense in that it was perceived as easy to

plant, demanded less labour in the long run as there is no annual field preparations, had


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7.4 GENDER ROLES IN BIOFUEL PRODUCTIONIn biofuel production, female participated highly during land preparation (2.2%), planting

(2.9%) and supervision (3.7%. Men played the following functions like land preparation

(27.5%), planting (12.5%), plough (4.4%), supervise (4.4%), weeding (32.2%)

Children perform the following functions: cultivate (5.1%), everything (0.4%), nothing(7.7%), planting (9.2%), spacing (1.1%), weeding (63.7%), didnt say (12.8%).

It is observed that women and children perform more weeding functions than men and

children do more weeding than women.

7.5 BENEFITS OF BIOFUEL PRODUCTION

The study found that both men and women benefited in various ways from the biofuel

production. The benefits included, but not limited to socio networking, input supply to

support income for food crops, and for those among whom oil was extracted locally, oil for

lighting. These benefits were however not adequate to the satisfaction and improvement of

local livelihoods.


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CHAPTER EIGHT

8.0 CONCLUSION AND RECOMMENDATIONS

8.1 CONCLUSIONS

This study, that involved making an assessment of the status of the Biofuels industry in

Zambia has shown that the Zambian government through its National Energy Policy (GRZ,

2008), has put in place a regulatory framework to guide the development of the sub-sector.

The energy policy states among other things that government will support investment in

Biofuel production through appropriate incentives so that energy crops are cultivated by

farmers and local investors from which Bio-ethanol and bio-diesel may be produced. This is

seen as one way of reducing dependency on the costly fossil fuels.

The survey also shows that the Zambian biofuels industry is still in its infancy stage and

production of biofuel crops by smallholder farmers and the processing of the crops by

investors or processors, is also in its infancy, as only small amounts of oil and soap have

been produced in the past two agricultural seasons.

The research has shown that the fears that have been raised globally about the possibility


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The buying and renting of land suggests that a rural land market could be emerging and will

give value to rural land with the passage of time and with increased demand for biofuel crop

production.

The study shows that the contracts which processors and small-holder farmers enter into,

could be beneficial to both parties. While the processors are able to procure the biofuel

crops from the farmers, they also provide a service in terms of guaranteed markets,

provision of input support, creation of employment and support to the communities.

However, there is room for improvement as the smallholders stated that they were not

happy with the contracts because there were few or no follow up measures and the prices

offered for their crops were low.

The survey and the review of literature shows that the capacity exists in Zambia forincreased production of biofuel crops and the development of the biofuel sector. In this

regard, smallholders were of the view that they would like to expand their production as it

was a profitable income generating activity. However, costings show that small scale

farmers cannot make profits from jatropha production under the current pricing mechanism

of jatropha seed. If local processing is encouraged on the other hand, small scale farmers

may make some profit. It is important to note that even large scale farmers will benefit with

appreciable profits from jatropha production by processing the product on farm than selling


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8.2 RECOMMENDATIONSIn view of the assessments and the conclusions that have been made above, the following

are the recommendations:-

i. There is need for harmonization of focus and purpose in the biofuel sector. This can

be achieved by having coordinating body for the biofuel sector that should include

the private sector, Civil Society and the government.

ii. The biofuel sector is relatively new in Zambia. To enhance adoption of credible and

proven methodologies and practices, government should take leadership of the

sector to give needed guidance. This recommendation does not preset government

as the only source of credible knowledgeable and information about biofuels. Rather

the recommendation is set to call on government to protect its citizens from opposing

views that are promoted by various stakeholders among small farmers yet all the

views are presented for implementation like they are the only proven views. The

biofuel sector should be coordinated through three relevant specialized

subcommittees to look at and spearhead areas like production of feedstock and land

issues, fuel processing and standards and marketing of both feedstock and other

products.


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v. Government should consider giving incentives to companies that encourage local

processing of biofuels as this is the best way to help small scale farmers get more

money out of the biofuel industry using jatropha as feedstock. Value adding is a sure

way of empowering the rural communities through biofuel crop production.

vi. Land in the rural areas and in Zambia as a whole is slowly getting some value. This

trend should be recognized so that when land is allocated for large scale jatropha

production, any persons resettled should be adequately compensated. In fact,

government should provide plain guidelines resettling families displaced to pave way

for large scale biofuel crop production.

vii. There is need for intensive and in-depth study on the impact of biofuels on the

environment and biodiversity. In fact this report identifies several gaps in the biofuelindustry that need detailed research among which the following should take

precedence: agronomic practices, best outgrower model, blending ratios, Pricing

mechanisms, Impact of biofuels on socio-economic well being of locals, impact on

the environment and best synergy among players.

viii. Land access should be made more readily available to both processors (investors)

and smallholder farmers in farm blocks that should be established by the government


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xi. Use of below age persons should needs to be established in details and checked

before the trend becomes hyper.

From the field survey, out-grower organisations perceive that they have endeavored to

provide the promised services in the contract. However, the farmers do not share this

perception. This phenomenon could further be due to lack of adequate standards covering

all support areas in the biofuel industry. There is need for government to interpose in the

service provisions by providing minimum standards in the industry.

There is need for documentation at the Ministry on what land and how much of it was being

allocated for different purposes including Biofuel production. This study could not

conclusively understand what the Ministry of Lands was doing regarding biofuels because

of the negative response from the custodian of information at the Ministry. However, it isknown that the Ministry of lands does not know how much land is allocated for different use.

A land audit would be a worthwhile exercise for the Ministry of Lands

It is equally important to sensitize small-scale farmers to ensure that they continue to grow

their food crops in addition to the cultivation of Jatropha and other biofuel crops other than

concentrate on pure jatropha crop fields. Furthermore, the farmers should not convert their

foods crops (like maize and sorghum) into bio-diesel and thus experience hunger and food


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REFERENCES

BAZ, 2007. Jatropha Curcas: What we know. Biofuels Association of Zambia. Lusaka.

Beggs, C. 2009. Energy: Management, supply and conservation. Butterworth-

Heinemann. Germany.

Benge, M. 2006. Assessment of the potential of Jatropha curcas (biodiesel tree) for

energy production and other uses in developing countries. Echo online magazine.Accessed on 23 June 2009.

Center for Energy, Environment and Engineering Zambia. 2006. Biofuels Development

Framework. August 2006.

Clark, G. 2008. Fourth generation biofuels muted by UK researchers. [Online].

Retrieved from http://www.biofuelreview.com/content/view/1493/1/ . [Accessed 26th May

2010]. Biofuels Review. Tuesday, 04 March 2008. London.

Communication from the Commission. 2006. An EU Strategy for biofuels. February 2006,

COM (2006) 34 final, Brussels.

Demirbas, A. 2009. Biofuels: serving the planets future energy needs. Green energy and

technology. Springer-verlog, London.

ERB, 2008, 2ndNational Bio Fuels Conference, in The Energy Regulator Newsletter,

fourth edition, 15th 17th December, Lusaka.
http://www.biofuelreview.com/content/view/1493/1/http://www.biofuelreview.com/content/view/1493/1/


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Furfari, A. 2008. Biofuels: Illusion or reality- the European experience. Editions

TECHNIP

Green Facts. 2010. [Online]. Retrieved from http://www.greenfacts.org/en/biofuels/-

figtableboxes/biofuel-tanzania.htm. Tanzania.

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