Strategic Options for Edible Oil Industry Development:Case of Sunflower sub-Sector
3rd Annual Policy ConferenceMarch 02, 2017
Sunflower Market System in Tanzania
2
Why a Systemic Approach?
• Structure: Players, functions
• Patterns of behavior: Strategic or relational
• Rules of doing business: Formal or informal
Where is the value-add in Sunflower sub-sector?
6
• Seeds & Oil capture largest share of value-add
• Ensuring higher proportion of these benefits are captured by large majority (inclusiveness) contributes to growth + transformation
• Current improvements offer higher pricing points for both seed & oil: productivity + Oil composition & proportion
National Sunflower Strategy (2015)
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Key systemic constraints Demand side constraints Compliance & adherence to food safety & quality standards Branding & promotion of in-demand products Responsiveness in meeting clear buyer demand (sooner)
Supply side constraints (production & processing) Availability & accessibility of improved seed varieties Access to bundled services/technologies suitable for enhancing production &
productivity: Finance, extension, inputs, soil testing, insurance, post-harvest + processing technologies
Capacity of farmer organisations to do farming as a business Business environment constraints Unharmonised taxes, levies Trust & transparency; coordination in the sub-sector
Strategic Options: End Markets
7Immediate
• Specialist food-safe cold pressed oil
[EU, Middle East]
• Food-safe cooking oil• Bulk food-safe crude Oil[Domestic, India]
• Food-safe bulk oil (tied to social impact)
[EU]
• Food-safe branded oil [China]
• Cake & by-products[Domestic, UAE, India]
• Confectionery grade food-safe seeds for direct consumption
[EU]
3 – 5 years 1 – 3 years
National Sunflower Strategy (2015)
Low
Good
High
Strategic Options: Increased production & productivity (Seeds)
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Options from improved seeds
• 4 hybrid varieties already registered • Easy identification / differentiation by
farmer• Double current yield (0.8mt/Ha)• Up to 40% oil yield (cf. 22 – 28%)• Seed cover more conducive for
crushing• Shorter maturity (harvest): 3 months
cf. 4 - 5 months
Strategic Options: Increased production & productivity (Improving pollination by bees)
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Targeted pollination by bees has proved to increase up to 80% sunflower head productivity in Tanzania – even when using improved seed varieties
Strategic Options: Increased production & productivity (Sourcing Structure & Logistics Considerations)
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Gary Gereffi (2004)
Factors Influencing Supply Logistics• Role of a logistics facility e.g.
aggregation, storage• Nature of processing taking place
(primary or secondary agro-processing)
• Capacities that should be at particular locations
• The nature of market being served: national, regional (EAC/SADC), export outside regions
Strategic Options: Increased production & productivity (Bundling Services, Production & Post-Harvest Technologies)
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Key technologies
• Production equipment & machinery
• Customised input packages (seed, fertiliser, agro-chemical combinations)
• Post-harvest handling equipment & machinery
• Climate smart supportive technologies
Key services• Scalable access to finance;
• Business development services (agro-enterprise management)
• Soil testing, profiling, mapping
• Insurance: multi-peril, weather
• ICT-based information and extension provision models
Strategic Options: Infrastructure (Last Mile Infrastructure)
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Movement
Processing/Storage/Marketing
Productivity
3rd Order Class(Processing/ storage
Infrastructure)
2nd Order Class(Power Infrastructure)
1st Order Class(Transportation Infrastructure)
FAO, EAC Secretariat, Kilimo Trust (2014)
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Key factors for agro-processing to drive inclusive growth & competiveness
Domestic, Regional (EAC &SADC), selected export markets: aim at both product & end market diversity
Options for increasing production & productivity: seeds, bundling services/technologies, utilising better pollination
Agro-processing technologies: Modular small-scale (3 – 5 MT/day), with better longevity and less down time; build skills and supportive capacity for sustenance of technologies
Infrastructure: Last Mile Infrastructure of roads, power, and storage
Enabling environment: Harmonise the different taxes & levies; build capacity for public-private dialogue