SUBSECTOR / VALUE CHAIN ANALYSIS REPORT FOR SUNFLOWER EDIBLE OIL FOR LOCAL
MARKET
TANGA REGION - TANZANIA
STUDY COMISSIONED BY SIDO-IFAD MUVI PROGRAMMERural Business Support Services (RBSS) Sub Component
DRAFT REPORTJuly 2009
CONDUCTED BY MATCH MAKER ASSOCIATES LIMITED
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Table of contentsAcronyms and Abbreviations .........................................................................................................................iiiAcknowledgements and Disclaimer............................................................................................................... vExecutive Summary....................................................................................................................................... vi1.0 INTRODUCTION......................................................................................................................................1
1.1 Background to the Study .....................................................................................................................11.2 Objectives and output(s) of the study .................................................................................................11.3 Approach and Methodology ................................................................................................................21.4 Limitations to the study........................................................................................................................41.5 Structure of the report..........................................................................................................................4
2.0 WORLD PERSPECTIVE OF OILSEED AND SUNFLOWER SUB SECTOR .......................................63.0 OVERVIEW OF OILSEED AND SUNFLOWER SUB SECTOR IN TANZANIA....................................8
3.2 Trade and marketing of sunflower products and edible oil ..............................................................103.3 SMEs, sunflower processing and available technology...................................................................113.4 Sunflower and the National bio-fuel initiative ...................................................................................12
4.0 SUNFLOWER SUB SECTOR IN TANGA REGION.............................................................................144.1. Sub sector definition .........................................................................................................................194.2. Actors and Functions........................................................................................................................204.3. Tanga Region Sunflower Sub Sector Map ......................................................................................234.5. Economic and Profitability Analysis .................................................................................................25
5 TANGA REGION AND SUNFLOWER SUB SCTOR DYNAMICS..........................................................315.1 Driving Forces....................................................................................................................................315.2 Constraints, Opportunities and Viable Business Solutions..............................................................305.3 Market Analysis (Demand and supply) of Viable Business Solutions.............................................335.4 Subsector/ SME Competitiveness ....................................................................................................35
6.0 SUB SECTOR VALUE CHAIN DEVELOPMENT .................................................................................376.1 Value chain development.......................................................................................................................376.2 Business model for sub sector development in Tanga region .............................................................397.0 SUB SECTOR DEVELOPMENT INTERVENTIONS AND STRATEGIES ..........................................42
7.1 Promotion of commercialization of the enterprise............................................................................427.2 Development of a comprehensive contract farming business model..............................................427.3 Making seeds readily available and affordable to farmers ..............................................................437.4 Financial services availability ............................................................................................................437.5 Develop weather crop insurance model to be piloted in the sub sector. ........................................43
8.0 ANNEXES...............................................................................................................................................458.1 Itinerary for the sunflower sub sector study......................................................................................458.2 Key Contacts......................................................................................................................................468.3 Summary of national import and export of vegetable oil and products (BET, June 2009)............47
Lists of TablesTable 1: Annual Estimates of sunflower production 2000/2001- 2004/2005 (‘000 tons) ............................9Table 2: Tanzania National Sunflower Variety List .......................................................................................9Table 3: Tanzania Import of cooking oil (2002 – 2008) ..............................................................................10Table 4: Tanzania Export of cooking oil (2004 – 2008) ..............................................................................10Table 5: SME processing technology available .........................................................................................11Table 6: Production of sunflower in Handeni District ..................................................................................18Table 7: Crop production and the position of sunflower in Kilindi District..................................................19Table 8: Sunflower optimum yield................................................................................................................26Table 9: A comparative analysis of farmer profitability ...............................................................................27
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Table 10: Profitability when a farmer sells sunflower seeds ......................................................................27Table 11: Profitability when a farmer sells sunflower oil and seed cake ...................................................28Table 12: Profitability when a farmer sells only oil......................................................................................29Table 13: Profitability when a processor buys seed, mills and sell oil and seed cake..............................29Table 14: Constraints and opportunities......................................................................................................30Table 15: Viable Business Solutions ...........................................................................................................33Table 16: Leverage points and interventions ..............................................................................................44
Lists of FiguresFigure 1: SSA/VCA Methodology ..................................................................................................................4Figure 2: Proposed value chain for development .......................................................................................38Figure 3: Business model for Tanga Region sub sector development ......................................................39
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Acronyms and Abbreviations Ac - AcreARI - Agriculture Research InstituteASA - Agriculture Seed AgencyASDP - Agriculture Sector Development ProgramBET - Board of External TradeCAMARTEC - The Centre for Agricultural Mechanization and Rural TechnologyCBO - Community Based OrganizationsCDM - Clean Development MechanismCIF - Cost Insurance and FreightCTI - Confederation of Tanzania Industries DADPS - District Agriculture Development Plans DALDO - District Agriculture and Livestock Development OfficerEAC - East African CommunityEU - European UnionFaaB - Farming as a Business FFF - Farmer Field SchoolFGP - Farm Gate PriceFO - Farmer OrganisationGDP - Gross Domestic ProductGOT - Government of TanzaniaHa - HectaresHp - Horse PowerIPs - Implementing PartnersKgs - KilogramsKIKIWANI - Kikundi cha kilimo cha Wanyamakazi MisimaLGA - Local Government AuthoritiesNBTF - National Bio-fuel Task Force NGO - Non Governmental OrganisationsMAFC - Ministry of Agriculture Food Security and CooperativesMETL - Mohamed Enterprises Tanzania LimitedM/LSF - Medium/ Large Scale Farmers MIP - Media Implementation PartnersMT - Metric TonnesMITM - Ministry of Industry Trade and Marketing MUVI - Muunganisho Ujasiriamali Vijijini (Connecting Village Entrepreneurs)PADEP - Participatory Agriculture Development Empowerment ProjectPASS - Private Agriculture Sector Support QDS - Quality Declared Seeds RAA - Regional Agriculture AdvisorRBSS - Rural Business Support ServicesRMSME - Rural, Micro Small and Medium EnterprisesRUDI - Rural Urban Development InitiativeSHF - Small Holder FarmersSIDO - Small Industries Development OrganisationSME - Small and Micro Enterprises SSA - Sub Sector Analysis SUA - Sokoine University of AgricultureTEMDO - Tanzanian Engineering and Manufacturing Design Organisation
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TOSCI - Tanzania Official Seed Certification Institute Tshs - Tanzania ShillingsTZ - Tanzania USA/US - United States of AmericaVCIPs - Value Chain Implementing Partners
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Acknowledgements and DisclaimerConsultants of Match Maker Associates Ltd undertook this sub sector study. It is not possible to mention every one who contributed to this study. The consultant however wishes to extend many thanks to all those who unreservedly offered support of all sort to realise the study.
Special thanks are extended to various people who took time off their busy schedule to provide relevant information for this study. The author is indebted to all those interviewed; e.g sunflower chain actors (input suppliers, smallholder farmers, processors and traders), NGOs and CBOs, Regional and District authorities in Tanga region.
Similar gratitude is extended to the staff of SIDO Regional Office in Tanga; notably Mr.S.H Mtani, the Regional Manager, Ms. Gladness Foya and Mr. Karim Shemdoe.
Further gratitude goes to MUVI Project Management team, who entrusted Match Maker Associates Limited (MMA) with this assignment. The consultant would like to acknowledge the support and guidance of Mr. Jalibu Mwene Milano, the coordinator of the MUVI program – under which this study was commissioned.
We do not forget to mention the importance of the validation workshop from which comments obtained was instrumental to finalise this report. In the same vein we extend gratitude to all who made insightful observations and comments on the study at the validation workshop.
Finally, it must be stressed that opinions expressed in this report are purely those of the authors based on observations and findings during the study. It therefore goes without saying that the authors, and not SIDO take full responsibility for any errors of commission or omission that may be found in the report.
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Executive SummaryThis study is conducted under phase two (diagnostic phase) of the implementation of component two of MUVI. The study is conducted by Match Maker Associates Limited (MMA) - the consultancy firm selected to implement the diagnostic phase of Rural Business Support Services (RBSS) Sub Component of MUVI in Tanga region. Prior to the study, a sub sector selection workshop was held (17th
April 2009) in which sunflower sub sector was selected for a detailed analysis and later development under the MUVI program. This study and its outcome (recommendations) are expected to contribute towards the formulation of strategies to develop the sunflower sub sector in Tanga region.
Value Chain Approach was proposed as the underlying methodology for the implementation of MUVI program. MMA adopted the proposed methodology. The Value Chain Methodology starts with a sub sector selection and analysis and identification of a viable chain for development. A crucial characteristic of the technique lies in the systematic steps involved in converging information drawn from understanding the policy and regulatory environment, from mapping the structure of the market, from analysing the key trends and dynamics in the market, and from identifying points of leverage where interventions might have greatest impact.
This sunflower sub sector analysis was accomplished through application of three key methodologies; key informant interviews, focussed group discussions and literature review. The study was done in Tanga region but then stretched outside the region to benefit from the knowledge and experiences of other key sunflower subsector stakeholders outside Tanga region. Lack of and in some cases insufficient data for analysis to adequately answer the research questions was the main constraint encountered during the study.
The overall objective of the study was to critically analyse the sunflower sub sector, identifying available supply chains and value chain for development and recommend sub sector and value chain development strategies. The report follows a chronological and systematic pattern. It places the Sunflower sub sector in Tanga region in perspective of world and national dynamics and then proceeds to discuss the local issues with such global and national issues already well articulated.
Sunflower falls under a broader category of oilseed crops. Oil seed crops include Copra, Cotton (cotton seed), palm, groundnuts (peanut), rape (rape seed), Soybean, olive, corn, sesame safflower and sunflower. World production of oil crops stands at over 385 million metric tons (FAO 2008, Ugulumu 2009). The world’s demand for oils and fats has doubled for the last 15 years and is projected to reach 217 million metric tons by year 2030 (Sidewell 2008). Crude palm oil and soy oil currently account for almost 50% of the global demand of the crops. FAO projects the oil seed industry to maintain growth pace among the major agricultural sectors up to 2010. The global consumption of edible oil is forecasted to grow at 2.5% annually between 1999-2010. Globally exports are projected to grow by about 15 million metric tones by 1020. Brazil and Argentina (Soy oil) and Malaysia and Indonesia (Palm Oil) will increase their share. Sunflower oil world trade has been stable in the last five production years. However, Argentina is still holding a leading position. The volume traded in 2003 reached 3.4 million tons for US$ 1,583 million. Argentina (30%), Ukraine (27%) and The Netherlands (10%) are the main exporters.
Import and export information reveals that Tanzania is a net importer of crude oil, refined edible oil, fractions and products. Dependence on imported crude and refined edible oil and fractions and products has increased over time with imports exceeding exports for the years 2004 to 2008. Net import value (CIF) of crude and edible oil products is about twice its net weight. There has been growth in both imports and exports of crude oil, refined edible oil, fractions and products with growth in imports
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exceeding that of exports. Export has fluctuated between 1 and 17 million MT between 2004 and 2008 reaching a climax of 42 million metric tons in 2008 (worth 77 billion). Imports grew from 8 million MT(worth TShs 4,398,746,652) in 2002 to 605,923,894 MT (worth TShs 694 billion) in 2008. Development of the sunflower sub sector would be significant to substitute edible oil importation.
In Tanzania, Southern highland zone, Southern zone, Eastern zone, Northern zone and central zones produces sunflower. Popular growing areas include Singnida, Manyara, Morogoro, Iringa, Dodoma, to mention but a few. Sunflower cultivation and production of sunflower oil is growing. Locally produced sunflower oil is now contributing about 40% of the national cooking oil requirement with the remaining 60% being imported (MAFC, 2008, ARI Ilonga, 2008). With minor sunflower producing regions taking up production, local production is expected to grow further. Nationally, sunflower is acknowledged to be the most important oilseed crop with the best economy in production. With the basic inputs and using simple farming techniques, good yields can be realized.
Sunflower production is a profitable venture at the farmer level with a gross margin of up to 60% earned by a farmer. The farm gate prices in many parts of Tanzania fluctuate between TShs 18,000 to TShs 30,000 per 60kg bag (TShs 200-500/kg). Marketing of semi refined sunflower oil in Tanzania is still very localised. Sunflower oil has many substitutes (in brands like Korie, Fresh fry, Oki and other edible oils i.e. cotton seed oil, etc) some of which are imported. There is growing international and national demand for edible oils. Tanzania edible oil demand is estimated to be 18,000 tonnes per month. The industry needs 250,000 tonnes a year of edible oil. Domestic production of seeds can not meet the demand of seeds for processing.
SMEs play a big role in sunflower in the major sunflower producing regions. Many SMEs in the main sunflower producing regions buy sunflower seeds from farmers, process it and sell oil. Others with large operating capital stocks seeds for processing during off-seasons. Also most small scale farmers processsunflower seeds, sell the excess oil to the processing SMEs and take home what is for consumption. Main technologies for processing include (1) Local technology (Machines made by TEMDO and CAMARTEC) and (2) Foreign technologies (Machines imported from predominantly China and India, and some from Europe). Tanmeck and Sun traders based in Dar es Salaam are the suppliers of Chinese processing machines. CAMARTEC makes ram presses of various capacities.
Depending on the variety, sunflower can grow in almost all Districts in Tanga region. However, the sub sector is still not fully developed as compared to Manyara and Singida regions. Sunflower remains a relatively small sub sector although with a huge potential. Currently, Handeni, Kilindi, Korogwe, Pangani and Muheza grow sunflower,with potential in Mkinga, Lushoto and Tanga. From the point of view of potential market opportunities and ecological suitability, smallholder and commercial production of sunflower has very great potential in the entire region. Enough promotion needs to be done to make the sub sector growth possible.
In Handeni, the district data show that 4,033 metric tons was produced (on an estimated 7,755 acres) in 2008. In Kilindi, 972 tons of sunflower seeds was produced (on estimated 1,869 acres) in 2006/2007 season. The figures of production and acreage cultivated are estimated to have increased with production estimated to have grown to 1,000 metric tons and above in 2008 production period. In Muheza District, sunflower is grown in Potwe and Kwafugo wards and there is a processing unit at Potwe ward although there was no district statistics available for sunflower production. In Korogwe, sunflower is grown in Gombero although Mashewa and neighbouring areas has huge potential. In Mkinga District, Maramba division is considered favourable for sunflower production. In Pangani, sunflower farmers are scattered all over the district.
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It can be estimated a total of 12,000 acres was cultivated in 2008 production period (Handeni about 8,000 and 4,000 shared between the other districts). Total production of sunflower can be estimated at about 6,000 metric tons. Sunflower yield is 520 kgs/acre (8 bags of 65kgs/acre). Economic analysis of the current sunflower production practices in Tanga revealed that there is still a huge opportunity to increase production and productivity by application of best and recommended practices in production. Farmers can increase profitability of selling sunflower seeds up to a gross margin of 75% using best farming practices. With current agronomic practice, gross margin for a farmer selling sunflower seeds is 60%, selling sunflower oil and seed cake is 75% and gross margins for an SME processor selling oil and seed cake is 39%.
Key driving forces for the sunflower subsector are growing local and international demand for edible oil, price of locally processed sunflower oil which is slightly higher that that of imported palm oil products, and the zero tariff rates for the EAC which means ease of importation of oil from the EAC block.
The main constraints and indeed a challenge that has to be overcome in developing the sub sector is lack of and sometimes insufficient seeds for planting. Other constraints include sunflower diseases- leaf rusts and viral diseases yellow leaf spots and yellow ring spot virus. Limited financing for production was also reported to be a problem. Lack of market was reported to be a problem but this could be probably due to low volumes of production, which are insufficient to attract traders. Sunflower seeds for crushing are on high demand nationally.
Constraints can themselves present good business opportunities for rural entrepreneurs. Available opportunities include investment in seed supply, training in sunflower agronomy, and investment in large scale / commercial production of seeds. Investment in provision of market information is also another business opportunity. We identify value chains by way of looking at key element of a value chain; sharing of economic gains, governance and market focussed collaborations. We observed that the value chain is at its infancy with low volumes of production (few farmers and on average less than 4 acres farmed per household) and few processors (about 5 processing units but currently only 2 processing firms are working with a combined capacity of about 2 tons a day) and small volumes being processed. At present there is an emerging value chain. Profitable gains are starting to emerge to farmers and a few processors, collaborations is not yet evident. A potential chain leader has been identified (with a processing capacity of 20 tons a day) but there is no linkage due to extremely low volumes of production. As such, efforts need to be put to an overall development of the sub sector as the emerging value chains is left to grow.
A comprehensive and integrated investment model for the development of the sunflower sub sector in Tanga region is proposed. The investment program will integrate and draw resources from both private and public investment with the ultimate motive to benefit the rural economically vulnerable majority and contribute to the national and MUVI objective of poverty reduction. Community based seed production; certification and multiplication will be integrated with crop insurance, sustainable financing and other BDS. Small Holder Farmers clusters will be linked to processors by a market linkage facilitator. The linkage will facilitate Small Holder Farmers’ clusters to access market for their outputs and also supply for services they need.
The implementation of the proposed model is phased. First year interventions focuses on setting up and building production base while at the same time setting ground for a sound commercialization of the subsector. Activities thus include; Promotion of sunflower at regional and district forums, Farmer mobilization and training concurrently with seed production in farmer clusters. Second year intervention focuses on strengthening production base, strengthening partnership between stake holders and
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directing subsector development towards commercialization, SME processing and contracting production. Third year activities focuses on increased commercialization and strengthening thecontracting.
The proposed sub sector development model links well with the value chain envisaged. Each function along the value chain (input supply, production, processing and marketing) is linked to key aspects of the model (QDS and seed production, SHF clustering for production, and BDS and financial services providers). Proposed sub sector development interventions include promotion of commercialisation of the enterprise, developing a comprehensive contract farming business model, making quality seedsreadily available and affordable, ensuring that a viable financial services is available and affordable by a farmer and providing for farmer insurance against bad weather.
In a nutshell, given the background of the sunflower subsector in Tanga region (at infancy but with high prospect for growth), we envisage subsector development interventions to build on the opportunities prevalent in the sub sector while also looking forward to curb the constraints for growth. Development of the sunflower sub sector provides a huge opportunity for import substitution and also reducing dependence on edible oil imports. Development of the sub sector draws immense strength from the ability of SMEs processors to create employment and hence participate in the overall national development and poverty reduction.
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1.0 INTRODUCTION
1.1 Background to the StudyThe study was commissioned by SIDO under the MUVI program. MUVI is funded by IFAD through MITM and SIDO, but the implementation of sub components is contracted to Implementing Partners (IPs). The MUVI program has a broader objective of supporting the GOT in its overarching objective of poverty reduction through supporting Rural, Micro Small and Medium Enterprises (RMSMEs) to grow in productivity and profitability and create employment for rural youth, women and marginalised groups. MUVI targets increasing access to livelihood and business information and improving value chain coordination hence contributing to household food sufficiency and increases in cash incomes.
MUVI is being implemented under three sub components;i. Communication and Knowledge management strategy for rural business; has got the objective
to improve client awareness of enhanced livelihood and market opportunities and how to access and exploit them. This component will be implemented by a Media Implementation Partner (MIP)
ii. Rural Business Support Services (RBSS) has the objective to strengthen the growth of RSMEs and their value chain participants by increasing their interaction with viable markets in acoordinated and sustained manner. This component is being implemented by Value Chain Implementing Partners (VCIPs).
iii. Institutional strengthening; targeting public and private sector institutions to ensure that they are provided with skills and capacities to ensure efficient and effective support to rural enterprises in targeted regions.
This study is conducted under phase two (diagnostic phase) of the implementation of component two of MUVI. Match Maker Associates Limited (MMA) is the consultancy firm selected to undertake the implementation of the diagnostic phase of the sub component in Tanga Region. Prior to the study, a sub sector selection workshop was held (17th April 2009) in which sunflower sub sector was selected for a detailed analysis and later development under the MUVI program.
This study and its outcome (recommendations) is expected to contribute towards the formulation of strategies to develop the sunflower sub sector. It will form the backbone of the two and a half years program.
1.2 Objectives and output(s) of the studyThe overall objective of the study is to critically analyse the sunflower sub sector, identifying available supply chains and value chain for development and recommend sub sector and value chain development strategies.
Specific objectives are to;i. Analyse sub sector and value chain actors, roles & interrelationshipsii. Analyse factors affecting the growth and competitiveness (constraints & opportunities) of the
various supply channelsiii. Conduct market analysis (global, regional & national) and assess critical success factors for the
market iv. Analyse value chain governance and economic benefitsv. Identify potential business solutions that will address constraints and tap the opportunities.vi. Select key services and analyse demand and supply side of such services to generate
recommendations of strategies for value chain upgrading (implementation).
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The (immediate) result of the study is a sunflower sub sector/value chain report that has analysed the dynamics of the sub sector, has addressed the programmatic concerns for MUVI and presented the way forward with respect to the development of the sub sector in Tanga region of Tanzania.
1.3 Approach and MethodologyThree main methodologies were applied in the study, namely; key informant interviews, focussed group discussions and literature review. The starting point was a review of literature available for sunflower sub sector. The consultant identified and made use of relevant data (primary or secondary) to the sub sector. The consultant then proceeded to undertake a field study through meetings and interviews held with key actors in the sunflower sub sector in the region. The field study was to research the factors, actors, channels and dynamics in the sub-sector. The field study was then broadened to encompass the major processors, R&D institutions, relevant ministries, and other relevant institutions for sunflower sub sector outside Tanga region. Annex 1 provides a comprehensive list of people interviewed during the research phase of the study.
Literature reviews of relevant national, regional and district data and information gave an overall national overview of production. Although production and trade statistics was not readily available for the districts, the regional profile of Tanga and additional raw data from the regional statistics office provided relevant insights.
Key informant interviews were held with the regional statistics offices, Regional Agricultural Adviser (RAA), District Agricultural and Livestock Development Officers (DALDOs) and extension staffs in the districts studied. Additional interviews were also held with individual farmers, processors and traders.
Focussed Group Discussions (FGD) were held with Farmer Groups in the districts of Handeni and Korogwe. Groups included KIKIWANI in Misima, and farmers in Kangati, Kwaluwala, Handeni District. In Korogwe, a FGD was held with Mashewa Women Saving and Credit Society. FGDs provided relevant inputs for the calculation of profitability of sunflower enterprise at the farmer household level.
Field study areas in Tanga region included all districts that are currently actively growing sunflower (Kilindi, Korogwe, Handeni, Muheza) and a sample of three other districts with potential Viz: Mkinga and Pangani. Additional data was collected outside Tanga region (Arusha, Morogoro, Babati and Singida); data on processing technology was got through key informant interviews with TEMDO CAMARTEC and TCCIA Manyara. Data on previous research and initiatives done in the sunflower sub sector was obtained from SUA Morogoro.
As part of out methodology we have planned a stakeholder’s workshop (validation workshop) which will discuss key emerging issues from findings of the study and intervention recommended. Feedback from th stakeholders workshop will be incorporated into the draft report to come up with the final report.
Sub- sector analysis (SSA) is a useful approach to gain a comprehensive view of the various inter-locking stages involved from taking a good or service from the raw material to production and then to the consumer. The understanding of SSA provides useful information for the stakeholders at different levels. It also provides an important insight to those involved in decision-making. Thus, the sub sector approach provides a framework for sector-specific action. The value chain perspective ensures that this action plan does not stop with local linkages. It highlights the importance of facilitating linkages with the global (out-side) economy. This includes improvements in infrastructure, credit availability, marketing facilities and all such services required for the trade.
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A typical sub sector analysis identifies: The different stages of production, processing and marketing, and the value added at each
stage Which actors – small-scale, large-scale, imports, etc. - are active at which stage; What the constraints are on enterprises playing a greater role at each stage; and What are the most cost-effective ways of helping them to do so?
A crucial characteristic of the technique lies in the systematic steps involved in converging information drawn from understanding the policy and regulatory environment, from mapping the structure of the market, from analysing the key trends and dynamics in the market, and from identifying points of leverage where interventions might have greatest impact. In this respect Subsector analysis is holistic, systemic (multi-level) and intervention-orientated.
The final output of a SSA process should be a well-focused set of intervention ideas characterised by convergence between opportunities/ constraints (bottleneck) for Marginal and Small Enterprises and identified sources of leverage.
Sub Sector and Value Chain MappingA key feature of the sub sector approach is the schematic mapping of relationships between trade groups, functions, and production and distribution channels within a sub sector. Mapping exercises (repeatedly updated as understanding develops) are a key part of the participatory “analysis” process. Mapping the relevant sub sector helps to identify where there are weak links. Knock-on effects up and down the chain become more apparent, complex interdependencies can be visualized and communicated more easily.
Driving Forces and Points of LeveragesSub sector analysis helps to find out where the bottlenecks are and which part of the chain holds back progress in the others. Driving forces refer to those factors that are at the root of sub-sector dynamics – the positive or negative changes taking place within the sub-sector, which are responsible for contraction, stagnation or expansion of various channels. These factors are often related to market demand, technological change, and barriers to market entry, input supply, and profitability level of different markets or product niches, risks or policies.
A leverage point within the context of SSA refers to a system node where a small number of one category-of-players interacts with a large number of other players in the sub- sector. These points therefore become easy entry points through which interventions that influence the entire value chain can be made. The leverage points are bottlenecks, which deserve priority attention of intervener. These are points/nodes where by through working with a few individuals or organisations, it is possible to reach a much larger audience of participants within the industry. Further analysis of leverage points will identify which leverages can be expected to be resolved by the private sector and which require public-private partnership, as well as where can the donor agencies help.
Constraints and Opportunities Analysis and InterventionsFrom our discussions of the key constraints and opportunities in the sub-sector, it is possible to highlight various interventions for the private sector as well as development agencies including the government. In essence, the key constraints and opportunities define the broad areas for intervention; it is therefore, essential to use this broad framework for interventions to provide a summary listing of some of the key specific interventions that appear to be of high priority.
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Depending on the level of development of the sub sector the analysis will move further into identification of value chain(s) for development and identification of specific value chain upgrading strategies. In this assignment it is therefore, essential to developing business model(s) with strong business proposition as a way to benchmark and project potential future outlook. MMA visualise the SSA/VCA methodology as depicted in figure 1 below
Figure 1: SSA/VCA Methodology
SUBSECTORSELECTION
SUBSECTOR ANALYSIS
VALUE CHAIN IDENTIFICATION
PROGRAMMING
IDENTIFICATION OF SERVICE PROVIDERS
COMMERCIALLY VIABLE SOLUTIONS
VALUE CHAINANALYSIS
VALUE CHAIN MAPPING
DEMAND/SUPPLY ANALYSIS
UPGRADING STRATEGIES
VCDSSA
VCD/SUB SECTOR INTERRELATIONSHIP
ENTRY POINTIMPLEMENTATION, M&E
EXIT POINT
1.4 Limitations to the studyLack of and in some cases insufficient data to adequately answer some of the research questions was encountered. Data on the production of sunflower at the districts was not readily available. Also data available at the time of the study, on the national production of sunflower is not recent (2002-2003 data). The consultant overcame the limitation in availability of production data at the districts by processing raw data available. Being the only data available, but considering the date and relevance of the national production data, the consultant validated the national data against what is likely to be the current state from interviews with key informants.
The study was conducted at the on-set of the short rainy season and hence transport in the rural areas was difficult and in some cases, time keeping for appointments was affected. This limitation however did not affect the content of information gathered during the study, its relevance nor the outcome of the study.
1.5 Structure of the reportThe report is presented in five distinct but interlinked sections. Section one is primarily concerned with introducing the study. The background of the study, objectives and outputs, approaches adopted to undertake the study and limitations to the study are found in this section. Section two focuses on global, national, regional and localised (districts) overview of the oilseed crops with reference to the sunflower sub sector. Section three zooms into the sub sector dynamics of Tanga region. Sub sector definition,
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actors and functions, sub sector mapping, profitability analysis, constraints and opportunities and driving forces are found in section three. Supply chain assessment and value chain identification is done in section four. Also in section four, critical success factors for the sub sector is available. Section five gives the sub sector and value chain development strategies.
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2.0 WORLD PERSPECTIVE OF OILSEED AND SUNFLOWER SUB SECTORSunflower (Helianthus annuus also known as Alizeti in Kiswahili) is an annual plant in the family Asteraceae. Sunflower is native and is said to have originated from North America. With a large flowering head (inflorescence), the stem can grow as high as 3 meters (9 3/4 ft), and the flower head can reach 30 cm (11.8 in) in diameter. The term "sunflower" is also used to refer to all plants of the genus Helianthus, many of which are annual plants. Sunflower in some cases can be open pollinated, with deep tap root systems and is resistant to drought and is used as a rotational crop or break crop for cereals. They grow best in fertile, moist, well-drained soil with a lot of mulch although the crop is also very adaptable in less fertile and semi arid areas. Although sunflower is adaptable to poor soils and drought, it produces good yield under good management and is relatively an easy crop to grow.
Sunflower has many economic importances, namely;i. It produces edible oil for domestic consumption and sunflower oil is also usable for bio energy.
Sunflower oil consumption can significantly improve human nutritional status. Used as bio oil sunflower is good for environmental protection.
ii. Can significantly improve livelihood of small holder farmers, SME processors and all employed in the sub sector through income generation and earnings
iii. Sunflower seed is a commodity with high export potential and oil has a high import substitution potential.
iv. It creates employment through manpower absorption in various stages of its marketing and processing channels.
v. Sunflower seed cake is rich in protein useful in poultry, small animals, piggery, dairy and draught animals.
vi. Sunflowers also produce latex and are the subject of experiments to improve their suitability as an alternative crop for producing hypoallergenic rubber.
Sunflower varieties differ with fatty acid compositions; some 'high oleic' types contain a higher level of healthy monounsaturated fats in their oil than even olive oil. Problems that may hinder optimum yield in sunflower production especially in Africa include lack of sufficient improved seeds to the farmers, fungal and viral diseases. Viral diseases are more severe.
Sunflower falls under a broader category of oilseed crops. Oil seed crops include Copra, Cotton (cotton seed), palm, groundnuts (peanut), rape (rape seed), Soybean, olive, corn, sesame safflower and sunflower. World production of oil crops stands at over 385 million metric tons (FAO Report 2008). The world’s demand for oils and fats has doubled for the last 15 years and is projected to reach 217 million metric tons by year 2030 (Fry 2005). Crude palm oil and soy oil currently account for almost 50% of the global demand of the crops. Edible oil competes as food and energy feedstock. FAO projects the oil seed industry to maintain growth pace among the major agricultural sectors up to 2010. There is supply growth from developing countries (low cost). FAO projects oils and fats to grow at 2.6 % over the decade to 2010. Factors that favour the development of the edible oil industry includes; (1) demand for food quality standards (e.g bans for the Trans fats) and (2) environmental issues (e.g demand for renewable fuels).
The global consumption of edible oil is forecasted to grow at 2.5% annually between 1999-2010. Growth is largely anticipated to occur in developing countries, reflecting population and income growth. The economic growth in these countries is projected to grow at 2.8% compared to 1.8% in developed countries. The non-food use of edible oil is expected to grow given by a favourable policy climate in certain developed countries (EU & US). The relative favourable environmental concerns in these
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countries and abilities of these countries in replacing import of crude oil will also increase the non food use of the edible oil.
Globally exports are projected to grow by about 15 million metric tones by 2010. Brazil and Argentina (Soybean oil) and Malaysia and Indonesia (Palm Oil) will increase their share. Western Europe and Africa are expected to increase their dependency on imported oils and fats.
Sunflower is the most important oil seed crop in Southern Africa at present. The total area under sunflower production is expected to increase in the near future as a result of its ability to outperform other crops in marginal soils, needing less inputs, and the fact that it's an excellent rotation crop which may be cultivated under wide varying climatic and soil conditions.
Global oilseed production for 2008/09 is projected at 403.5 million tons, down 4.2 million tons from last year. Lower soybean, cottonseed, and sunflower seed production are only partly offset by increased rapeseed and peanut projections. Global soybean production is reduced 4.5 million tons to 218.8 million, with Argentina accounting for most of the reduction. Soybean production for Argentina is projected at 39.0 million tons, down 4 million due to lower harvested area and yields. Soybean production is also reduced for Paraguay and India. Soybean production for Brazil remains unchanged at 57 million tons. Global rapeseed production is raised 0.4 million tons to a record 57.9 million due to higher projected output in India. Other changes include reduced sunflower seed production for Paraguay and reduced cottonseed production for Turkey. Global 2008/09 oilseed ending stocks are reduced 4.1 million tons to 58.6 million due mostly to lower soybean stocks in Argentina, Brazil, and the United States1.
Sunflower production was estimated at 25 million tons for the 2004/2005 production period. Russia, Ukraine and Argentina are the greatest producers. Sunflower oil is the fourth most important production worldwide. Argentina, Russia and Ukraine are the main producers of sunflower oil.
Sunflower oil world trade has been stable in the last five production years. However, Argentina is still holding a leading position. The volume traded in 2003 reached 3.4 million tons for US$ 1,583 million. Argentina (30%), Ukraine (27%) and The Netherlands (10%) are the main exporters. On the other hand, The Netherlands (11%), Argelia (8%) and Germany (6%) are the main buyers. The world production of sunflower pellets is also important, as it is the principal grinding sub product. Argentina is the first exporter, and the European Union the greatest importing block.
1 Source: United States Department of Agriculture; World Agricultural Outlook Board; April 9,2009
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3.0 OVERVIEW OF OILSEED AND SUNFLOWER SUB SECTOR IN TANZANIASunflower is one of the most important oilseed crops in Tanzania. The crop is adaptable over a wide range of environments and therefore it is widely cultivated in Tanzania. The crop is popular in the Eastern, Central, northern and Southern Highlands of Tanzania. Sunflower is gaining popularity and current data shows that local production of both factory and home extracted oils contributes to about 40% of the national cooking oil requirement with the remaining 60% being imported (MAFC, 2008, ARI Ilonga, 2008).
Nationally, sunflower is the most important oilseed crop with the best economy in production. With the basic inputs and using simple farming techniques, good yields can be realized. Also for oil extraction, sunflower is economically suitable. The cost of producing a unit of sunflower oil is lowest as compared to other oil seed crops (sesame, ground nuts etc). Additional advantage comes from its potential for higher yield in relatively poorer soils and its adaptability across various ecological zones nationally and regionally. Sunflower is ecologically suitable for most parts of Tanga region.
It is also noted that there is a readily available local markets of sunflower oil for domestic use and seed cake for livestock feeding. Sunflower has a high value addition potential in terms of its potential for processing into oil and soap and internationally bio-fuel (diesel). In relation to the cooking oil industry, sunflower is ideal for import substitution given that a good percentage of cooking oil consumed in the country is imported from Asia.
In terms of food and income security, sunflower is highly a suitable crop. In Tanga region, there are many cash crops (sisal, tea, cotton, coffee) Most of these cash crops are grown in estates, hence less impact realized on enhancing income for a small holder farming households. Also, noted is that maize for a long time has been cash and food crop for majority of smallholder farmers. In the short run (shortly after harvest), the cash needs outstrips the need for storage for long run food security. Consequently, many farmers end up selling most of the maize harvest and then suffer food shortage afterwards. Sunflower then remains the most economical alternative cash crop and indirectly (derived) food crop for a smallholder farmer.
National production of sunflower has been increasing over the years, from 80.87 MT in 2000/2001 to 134.36 MT in 2004/2005. Singida is the leading producer of sunflower seeds followed by Rukwa. Dodoma, Iringa and Shinyanga are also known regions for sunflower production in the country. Tanga and Kagera regions are the least producers of sunflower oil. Table 1 below is a summary of sunflower production in the country. Production data for Tanzania shows that sunflower was grown in about 145 ha nationwide in 2004/05 season, whereby 2.4 ha were from Tanga region (Handeni=0.98 ha, Kilindi=1.36 ha, Korogwe =0.02 ha, and none from Lushoto, Muheza, Mkinga, Pangani and Tanga districts).
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Table 1: Annual Estimates of sunflower production 2000/2001- 2004/2005 (‘000 tons)
Source: MAFC, 2008
According to a study conducted at ARI Ilonga the production cost for one acre is Tshs 380,000/- and one acre can produce up to 16 bags of 70 -80 kg each. If those bags are processed into oil, then the revenue from sale of oil (Tshs 800,000/-) and cake (Tshs 59,520) making a total of Tshs 859,520/-. This leaves a profit margin of Tshs 479,520/- per acre. The National Variety List contains 4 varieties of sunflower that can be grown in Tanzania. The list is presented in Table 2 below. Recommended spacing for sunflower is 75 cm x 30 cm, plant in rows at a depth of 2.5 5 cm. Sow 3 seeds per hole then thin (remove the sick plants in case of viral infection) to one plant per hole.
Table 2: Tanzania National Sunflower Variety ListVariety Year of release Owner(s) Maintainer
and seed source
Optimal production altitude range (Masl)
Duration to maturity (days)
Grain yield(Tan/Ha)
1. Record Before 1950’s (Recommended)
ARI Ilonga ARI Ilonga 0-2000 110-130- 1.0-2.0
2. CRN 1435 1999 Monsanto Kenya Seed Co.
Monsanto South Africa
900-1500 90-110 2.0-2.5
3. PAN 7352 2002 Pannar Kenya Seed Co.
Pannar Seed Co.
500-1500 110-120 1.5-2.5
4. K.Fedha 2006 Kenya Seed Co. Kenya Seed Co.Ltd
1500 - 2250 106 3.0 – 3.5
Source: MMA Study, May 2009
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3.2 Trade and marketing of sunflower products and edible oilAnnex 8.3 details import and export of various edible oil products. Table 3 and 4 summarizes national import and export information of edible oil. Table 3: Tanzania Import of cooking oil (2002 – 2008)
Year CIF Value (TShs) Net Weight (Kg)2002 4,398,746,652 8,955,2052003 22,826,132,124 49,703,7422004 5,910,563,185 10,286,3542005 256,569,452,241 571,732,9072006 268,909,317,079 443,246,7562007 607,553,560,522 690,476,1362008 694,023,772,020 605,923,894
Source: Data from Board of External Trade, Tanzania – June 2009
Table 4: Tanzania Export of cooking oil (2004 – 2008)Year CIF Value (TShs) Net Weight (Kg)2004 2,350,078,963 3,725,0472005 3,146,731,064 4,287,4172006 1,182,945,048 17,936,3162007 1,848,784,360 1,621,1672008 77,870,961,254 42,095,356
Source: Data from Board of External Trade (BET), Tanzania – June 2009
Import export information reveals that Tanzania is a net importer of crude oil, refined edible oil, fractions and products. Dependence on imported crude and refined edible oil and fractions and products has increased over time with imports exceeding exports for the years 2004 to 2008. Net import value (CIF) of crude and edible oil products is about twice its net weight.
There has been growth in both imports and exports of crude oil, refined edible oil, fractions and products with growth in imports exceeding that of exports. Export has fluctuated between 1 and 17 million MTbetween 2004 and 2008 reaching a climax of 42 million metric tons in 2008 (worth TShs 77 billion). Imports grew from 8 million MT (worth TShs 4,398,746,652) in 2002 to 605,923,894 MT (worth TShs 694 billion) in 2008.
Between 200 and 2004, soya bean, sunflower and safflower, and animal fats and oils and their fractions were major imports. Since 2006, crude palm and palm oil import has grown significantly. Crude palm and palm oil are now major vegetable oil import products.
Since 2004, crude palm, palm oil and fractions have contributed between 10% and 40% of national exports of oil products. Sunflower and safflower contributes about 14% to 20% of vegetable oil and oilseed crop exports. Animal fats and oils and fractions have contributed 13% to 30%.
Marketing of semi refined sunflower oil in Tanzania is still very much localised. The farm gate prices in many parts of Tanzania fluctuate between TShs 5,000 to TShs 14,000 per 60kg bag. Zero rate tariffs encourage importation of crude edible oil from Malaysia and this suffocates local sunflower production, possessing and marketing.
Sunflower is the ideal crop as far as edible oil production is concerned and has become an excellent alternative crop to maize and sorghum. Sunflower is widely adaptable and is more drought-tolerant than most other grain crops due to the fact that it can tolerate high temperatures and drought conditions more effectively than maize. The sunflower plant wilts readily, thereby lowering the temperature on the leaf,
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which in turns leads to considerably lower moisture loss. On the other hand the leaves recover rapidly again once moisture conditions improve. Sunflower is also a very efficient user of soil moisture as a result of its deep and branched tap root system. Even in the sub-soil and on heavy clay soils it utilises moisture reserves far more effectively than many other crops.
Unfortunately, sunflower oil has many substitutes (other edible oils i.e. cotton seed oil, palm oil, etc) some of which are imported. There is growing international demand for edible oils, though due to low extraction efficiencies (compared to larger mills) and low price of imported crude edible oils, Tanzania is not expected to benefit from this trend.
Tanzania edible oil demand is estimated to be 18,000 tons per month2 and the six major players (large mills) – BIDCO, Mukwano Group, Murzah Oil, METL and Mount Meru have reduced prices as competition has become more intense. The biggest player is BIDCO, which has a day throughput capacity of 500 tons and a soap factory with a capacity of 180 metric tones a day. BIDCO is a manufacturer and marketer of edible oils, fats, margarine and soaps in East and central Africa. Other minor players include Lacaera Investments based in Mwanza and Ahsante Moproco based in Morogoro.
The industry needs 250,000 tons a year of crude edible oil and all six major players supply sufficiently volume required although there are pockets of unmet demand due to infrastructural constraints and emerging health consciousness of urban consumers.
3.3 SMEs, sunflower processing and available technology SMEs play a big role in sunflower processing especially in Singida, Dodoma, Morogoro, Moshi and Manyara regions. Many SMEs in the main sunflower producing regions buy sunflower seeds from farmers, process it and sell oil. Others with large operating capital stocks seeds for processing during off-seasons. Also most small-scale farmers process their sunflower seeds, sell the excess oil to the processing SMEs and take home what is for consumption. Main technologies for processing include The local technology (Machines made by TEMDO and CAMARTEC) and foreign technologies (Machines imported from predominantly China and India, and some from Europe). Tanmeck and Sun traders based in Dar es Salaam are the suppliers of Chinese processing machines while a dealer based in Mwanza supplies the Indian Machines. The table below presents a summary of the local and foreign technologies available for processing. Efficiency utilisation of most SMEs processing plants is low. Most machines run only when there is enough sunflowers to process (harvest season). Table 3 below summarises SME processing technologies and capacities.
Table 5: SME processing technology available 3Technology/ country of origin
Local Technology (Tanzania)
China India Italy
Description TEMDO motorised oil expellers- Motor capacity of 20 Hp, usable on a three phase power supply.
CAMARTEC non motorised BP
Motorised machine, motor capacity of 20 and 25 Hp , usable on a three phase power supply
Motorised machine, motor capacity of 30 Hp, usable on a 3 phase power supply
Motorised machine, motor capacity of 25 Hp. Usable on 3 phase power supply
2 Estimate got from key informant interview with (Director) Mount Meru Sunflower oil Millers, Arusha. 3 The SME processing technologies described are sampled from Tanga, Arusha and Manyara regions.
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series (BP 50, BP 30 and BP 20).
Processing capacity/speed
TEMDO Machines about 10 bags of sunflower oil per 12 hours (180-200 litres of oil per 12 hours).
CAMARTEC machine BP 50, BP 30 and BP 20; 5, 3 and 0.5 litres of oil per hour respectively.
Series 95 (motor Hp 20)-20 bags in 12 hours
Series 105 (Motor Hp 25)-40 bags/12 hrs
Series 118 (motor Hp 20)-40 bags /12 hours
Quite robust with motor 30 Hp- 70 bags in 12 hours.
Capacity is 180 bags a day but actual is about 80 bags a day.
Efficiency of extraction
Depending on seed quality and type; a bag of 65-70 kgs produces 18-20 litres of oil.
A bag of 65-70 kgs produces 18-20 litres of oil.
A bag of 65-70 kgs produces 18-20 litres of oil.
A bag of 65-70 kgs produces 18-20 litres of oil.
Affordability/ price TEMDO machines- Tshs 5.million
CAMARTEC machines ; BP 50-Tshs 350,000; BP 30- Tshs 250,000; BP 20 Tshs 80,000
Of the three types, price ranges form Tshs 3.8 million to Tshs 5 million
Indian Machine costs Tshs 7 million
Can costs up to Tshs 5 million
Spare parts, maintenance and servicing
TEMDO machines, spares are easily available a TEMDO, Similar for CAMARTEC machines.
Spares are available at Sun Traders and Tanmeck alllocated in Dar-es-salaam.
Spares are supplies through an Indian Agent based in Mwanza.
Spares are not easily available locally.
Source: MMA study May 2009
SME processors across the country have a preference for the Chinese processing machines. Of the 45 SME processors registered with TCCIA Manyara, less than 5 have TEMDO machines about 3 have Indian technology and majority are using Chinese oil processing machines. Of the 5 processing machines, which are working in Tanga region, 3 of them are from China and 1 from Italy.
3.4 Sunflower and the National bio-fuel initiativeTanzania has expressed interest to develop bio fuels by way of partnership with a number of local and international actors. Tanzania ratified the Kyoto Protocol, hence potential to access CDM (Clean Development Mechanism) resources. The country’s potential to develop the bio fuel sector is huge as can be seen in the available natural resources necessary for the development of the sector. There is vast land availability (most of which is arable), water availability at many localities, potential to use bio
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fuels at all levels (household to industry), and experience in cogeneration eg Sugar and wattle high dependence on traditional biomass.
Bio fuel developments in Tanzania are still in an infancy stage. However some initiatives exist for both local and international investors. Some potential feed stalks have been identified as available for bio fuel production. Sunflower is earmarked as having huge potential for production of plant oil bio-diesel. The government of Tanzania acknowledges the importance of developing the bio fuel sector as follows;
i. Improving energy security,ii. New bio-energy industries creation potentialiii. Diversification of cash crops to local farmers,iv. Jobs Creation and income opportunities through bio fuels production,v. Foreign exchange savings, due reduction of volumes of oil imports vi. Reduction of emission of pollutants such as Lead, SO2, CO, particulates and since Bio-energy
has less emissions than fossil fuels
Singida has been earmarked as an area with potential for production of sunflower for bio fuel production. There is a special sunflower variety suitable for the bio fuel production. There has also been a formation of the National Bio fuel Task Force (NBTF) in March 2006 in order to formulate and propose an enabling environment to facilitate sustainable development of bio fuels in Tanzania. The NBTF is comprised of the various responsible line ministries. A bio fuel draft guideline has been formulated and a comprehensive plan for the development of bio fuel has also been formulated. To create local markets for bio energy/ bio fuel, the government in collaboration with other stakeholders is sensitizing both local and foreign investors in order to ensure sustainable market. However the government of Tanzania is keen to void the use of food crops for bio fuels while the use of by products is encouraged.
The imminent development of the bio fuel sub sector provides a huge potential for the market diversification of the sunflower sub sector in the country. Much as there would be a special sunflower variety for bio diesel production, what would still be a concern is the question of raising production to meet the demand of sunflower for edible oil production and that for bio diesel production. The two markets would compete for the same production base. The market that offers the best price would take the greater percentage of production.
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4.0 SUNFLOWER SUB SECTOR IN TANGA REGIONTanga region is located in the North Eastern side of Tanzania mainland. It is bordered by the Republic of Kenya in the north, Kilimanjaro Region in the North West, Manyara region in the West, Morogoro and Coast Regions in the South and the Indian Ocean in the East. Tanga region has a total of 27,342 Squared Kilometres, out of which 572 are covered by water. The region’s total area is about 2.9% of the total area of Tanzania. The region has 8 districts, namely, Handeni, Kilindi, Korogwe, Lushoto, Muheza, Pangani, Mkinga and Tanga. Map 1 show Tanga region and district locations. Of the 8 districts, Handeni, Kilindi, and Korogwe are known for sunflower production. Pangani and Muheza have some wards having potential for growing sunflower. Sunflower in the region is considered to be a relatively new crop although it is acknowledged to have huge potential for value addition, income creation and poverty reduction.
In 2006, Tanga region had an annual income of Tanzania shillings 834,274 million (National Accounts of Tanzania, 2006 figures) and the regional per capita income of Tanzanian shillings 475,835 per person. The contribution of Tanga region to the national GDP grew from 4.1% in 1996 to 5.56% in 2006, a rate 1.46% per decade. With 26.8%4 of its households below the poverty line5, which is below the national average of 36%, Tanga region moderately, better off in terms of poverty incidence. Kilindi, Muheza6, Handeni and Korogwe7 have higher poverty incidences with 38.2%, 32.5%, 31.9% and 30.5% households below the poverty line respectively while Lushoto, Tanga urban and Pangani districts have 15.6%, 17.3% and 21.9% respectively of households below the poverty line.
Agriculture is the mainstay of the regional economy with 77.5% of the population employed in the sector. Additionally 12.5% of the populations are employed in different business operations and a smaller percentage 1.11% in fishing and 1.67% in livestock keeping. Other economic activities include mining, tourism and small-scale industries. Of the agricultural households, 67.3% are engaged in crop production only, 32.1% in crop production and livestock and the rest 0.1 and 0.6% are involved in pastoralism and livestock keeping respectively. Lushoto district has the highest number of crop growing households (Agriculture Census, 2002/03).
Tanga has 1,700,000 ha of which 406,869 (86%) is utilized for agriculture. In general there is high land utlization in Tanga, in Lushoto district all available land is utilized (99%) while other districts have the following land utilization Muheza (89%), Tanga (76%), Korogwe (89%), Handeni (84%), Kilindi 84% and Pangani (89%)8. Tanga has a variety of agro-ecological zones which provides scope for a wide range of crop production and with a potential to attract investment and develop the economy of the region.
4 Pg. 55 Poverty and Human Development Report (PHDR) 2005,5 Set by National Bureau of Statistics (NBS) to be TShs. 262 per adult equivalent per day in 2000/026 Includes Mkinga district. 7 Includes Korogwe town council and Korogwe district council 8 National Sample Census of Agriculture 2002/03
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Map 1: Map of Tanga Region showing Districts
It is noted that Sunflower has been on the development agenda of the region for 15 years to date. It is not clear why the development of the subsector in the region has not taken off. Some respondents argue the subsector has not been adequately promoted. Important to note also is that Sunflower can grow almost anywhere in Tanga. To reap from this advantage enough promotion has to be done to make large scale production and commercialisation of subsector possible. Currently, it’s only in Korogwe, Kilindi and Handeni districts where sunflower is popular and to a lesser extent in some parts of Lushoto. However, from the point of view of potential market opportunities, ecological suitability, smallholder and large scale, commercial production of sunflower has very great potential in the entire region.
Also important to note is that Tanga has a number of sisal estates. To some respondents, the estates take large chunks of land and hence a limitation to commercial production of sunflower. Land for commercial production of sunflower is reported to be a constraint in Korogwe District. As a response to the land constraint in question, the possibility to intercrop sisal and sunflower should be explored. Two options are proposed (i) smallholder farmers can be given parts of sisal estates to grow sunflower- while
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also weeding the estates. (ii) The estates can themselves intercrop sunflower with sisal, hence diversifying production and getting more form given estate sizes.
It can be estimated a total of 12,000 acres was cultivated in 2008 production period (Handeni about 8000; and 4000) shared between the other districts. Total production of sunflower in 2008 can be estimated at about 6,000 metric tons (Handeni 4,000 MT). Sunflower yield is 520 kilos/acre (8 bags of 65kgs/acre). Limited trade between the region and the rest of the country - limited by small volumes produced as opposed to other market access constraints (infrastructure and market entry requirements).
Total installed capacity for processing is estimated at 52.5 MT/day. Currently 8 motorized SME processing installations of Chinese and TEMDO Technologies; Handeni (3); Muheza (1), Tanga (2), Korogwe (1) Pangani (1) with combined processing capacity of about 12.5 MT per day. There is onemedium scale processor in Tanga town with installed capacity of 20 metric tons a day. Hand/mechanical oil presses (ram presses) are also available in among many farmers in Handeni. Actual quantities processed is about 6 metric tons per day and only during the production period
Korogwe District9
The scenic Usambara Mountains and Pangani river basin dominate the topography of Korogwe District. The mountains rise in altitude to about 1219 meters above sea level and occupy nearly 32.4% of the district area. The Pangani River and its tributaries are the most important drainage. The climate is closely associated to the topography and ranges from tropical to sub tropical with a mean annual rainfall of 500 mm in the lower areas and 2000 mm in the mountains. Average temperatures in the mountains range between 15 to 30o C while the low lands are warmer with hot seasons (October - February) temperatures rise to about 38o C.
The variation in topography and climate provide different cropping possibilities, which can be defined in three major agro- ecological zones the mountains, low wetlands and semi arid zones. The economy of Korogwe district depends on agriculture. There are 133,339 hectares (35.5% of district area) of arable land, which is suitable for cultivation. Most of the rural population is engaged in the production of food and cash crops on small scale basis using mainly hand implements (hoes). Common crops grown are maize, tea, paddy, coffee, cardamom, etc on plots ranging from 1- 2 hectares averagely. The district is also involved in producing other crops, which include groundnuts, coconut, fruits, and sunflower. Food crops are mainly grown for subsistence although excess is sold in the local markets. Main markets for Korogwe produce constitute urban markets as far as Tanga, Dar es Salaam, Moshi and Arusha.
Sunflower is grown in small quantities in Mashewa, Gombero and neighbouring areas. Mashewa Women Savings and Credit Society have about 60 hectares of land designated for production. Farmers around Gombero primary school are producing sunflower in small farms of 2-4 acres. It can be estimated about 30 acres of sunflower was grown in Gombero in 2008 production period. Farmers report lack of market as the main hindrance for sunflower growing. A sunflower farmer interviewed reported selling his sunflower produce locally within the district.
Handeni DistrictHandeni district has diverse natural resources that remain largely undeveloped and appropriate investment would greatly contribute to economic and social progress. Handeni district has no coastline and the terrain is generally undulating with scattered high rising hills and upland areas mainly towards the western part of the district. The district experiences a diversity of climatic conditions. The western side especially around the Nguu Mountains experience lower temperatures than the eastern areas. The average temperature for the district is about 29oc. Like most parts of Tanga region, Handeni has two 9 District Information extracted from Korogwe District Investment Profile
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rainy seasons: the short and long rainy seasons. Average annual rainfall is between 500 to 1000 mm. The northern parts are drier than the rest of the district. The district has five agro ecological zones but all favour sunflower growing. The main agricultural activities in the region are crop farming. Out of a total of 1,320,900 hectares arable land comprises of 636,453 hectares (48.2% of the district area), area under crop cultivation is 23.5%. Smallholder cultivation predominates. Crops grown include maize, beans, cassava, millet, cotton, cardamom, sunflower, pigeon peas, oranges, mangoes etc10.
In the past, sunflower was cultivated but in small quantities. Maize had been the main cash and food crop. But due to cash needs, most maize produced was sold, leaving many households with food shortage and an immense threat of food insecurity. Having appreciated the income generating potential of sunflower and local market availability of mainly sunflower oil, the district started promoting sunflower production as a substitute cash crop to maize. Sunflower promotion started to feature district plans about 3-4 years ago and to date it is the number one cash crop in the district, taking about 30% of the district budget for crop development. At the moment, sunflower is second after maize (in terms of its position in the district plan and its household level income generation capacity).
Under GOT Agriculture Sector Development Program (ASDP) funding, sunflower is being supported through DADPS (District Agriculture Development Plans) and PADEP (Participatory Agriculture Development Empowerment Project).
There have been proactive and deliberate initiatives undertaken by the district to promote the sub sector;
a) The District has continually sensitised farmers to produce sunflower as a cash crop and one of the district strategy is to have every household grow at least an acre of sunflower.
b) Also the district has made available sunflower seeds through; (1) subsidising transportation of the seed and at present the district is stocking sunflower seed, which is sold to farmers at less the transport cost (Tsh 3000/kg). (2) District working with the private sector to increase seed availability.
c) Mobilised groups and facilitate them to buy processing machines; there is a provision under PADEP for farmers to access 20% of the total cost of their investment. At the moment there are more than 10 groups of farmers in the district.
d) The district has organised trainings on demonstration plots through FFS. Farmers are taught best practices in sunflower agronomy. The district provides seeds for FFS plots.
Currently, sunflower is grown by mainly smallholder farmers on average in 1-2 acres. Sunflower is produced in nearly all wards of the district but main sunflower producing wards are Kwalaguru, Mzundu, Mazingara, Kabuku, Misima, Sindeni, Kangata, Kwasungu, Segera and Kwedisinga. In its sunflower promotion initiative, the district stocks sunflower seeds to increase accessibility by farmers. Sunflower seed stocked is of the variety Kenya Fedha and is obtained from Kibo Seed Company, Arusha.
World Vision, an NGO working in Handeni District has been a main partner of the district sunflower sub sector development initiative. Out of seven main sunflower producing wards, World Vision is supporting four. The NGO (World Vision) has been providing seeds and processing machine (ram presses). Seeds are provided on credit, payable in two instalments; the first (50%) on receiving seeds and the second and last (remaining 50%) after sale. Between July to September 2008 district production totalled to 4,000 kilograms. Average price was TShs 300; the highest price was TShs 500. Compared to other oil seed crops, and also considering the production period of 2008 Sunflower production was highest (4.5 MT), followed by sesame (total about 1.7 MT). Table 4 below summarises 2008 (Jul- Sept) production of oil seed crops in Handeni. 10 Source: Handeni District Investment Profile; August 2005
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Table 6: Production of sunflower in Handeni DistrictWards 2006 Production (MT)
(FGP= tsh 300/kg) 2007 Production (MT) (FGP=tsh300/kg)
2008 Production (MT)(FGP=tsh500/kg)
Kang’ata 800 980 1,000Kwaluguru 28 11.2 50Kwankonje 21 21 100Ndolwa 188.3 49.7 80Mazingara 240.8 51.8 74Misima 30 33.6 100Sindeni 76 51 63Kwamatuku 300 250 320Segera 29 28 35Mgambo 28 25.2 27Kabuku 439 875 1,000Komkonga 27 25.2 33Vibaoni 505 320.6 400Chanika 500 584 450Mkata 39 43.0 84Kwamsisi 48 43.4 27Kwasunga 60 40 32Kiva 77 46.9 71Kwedizinga 81 84 87Total 3517.1 3563.6 4,033Source: DALDO’s Office Handeni, May 2009
Using the production figure above, it can be estimated that about 8,000 acres of land was cultivated for sunflower production in Handeni. There is no specific market for sunflower seeds in the district. In some cases in Kabuko, traders come from Dar-es-Salaam to buy sunflower seed. In most cases, farmers process sunflower to obtain sunflower oil which is then sold locally within the district and Handeni town.
Value addition through processing increases profitability at farmer levels. Currently, two forms of processing is existent; manual and mechanised processing. A number of farmers are organised in groups where predominantly manual small scale processing is done. There are also two small scale mechanised (using electricity) processing enterprises in the district, one in Handeni Town and another in Misima ward. Manual processing using ram press is reported to be highly labour intensive and is not suitable for commercial processing of sunflower oil.
Kilindi DistrictPeas, sunflower, cardamom, sesame, and broad or lima beans are the most important cash crops. The output of cash crops has expanded considerably but that of food crops was depressed by inadequate rains during 2006-2007, rainfall has also been a problem this year.
In Kilindi District sunflower is grown in most of the wards. The main method of sunflower cultivation is through intercropping with Maize. Wards popular for sunflower production include Msanja, Kikunde, Ngera, Kwediboma, Mvungue, Masagalu, Pagwi, Mkindi, Jaila, Negero, Kilindi, Kimbe , Songe and Lwande. Sunflower is grown in small scale as opposed to commercial. Small scale farmers near Hndeni process their harvest in Handeni to extract cooking oil commonly used domestically. There are isolated cases where traders come to buy sunflower in Kilindi but the volumes produced usually let the traders down. Access to quality seeds remain a problem to the sunflower farmers in Kilindi. The district is encouraging sunflower production and under DADPS seeds were once provided. Sunflower is considered an alternative cash crop due to its ability to substitute Maize which is currently a main cash crop.
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Table 7: Crop production and the position of sunflower in Kilindi District Crop 2005-2006 2006-2007
Tons Value (000’ Tsh) Tons Value (000’ Tsh)Maize 58,783 5,878,300 53,814 5,381,400Cassava 17,194 1,719,400 12,471 1,297,100Beans 19,082 5,724,600 17,566 5,269,800Bananas 1,425 213,750 3,423 513,450Yams 1,210 363,000 1,554 233,100Sweet potato 520 52,000 321 32,100Peas 1,131 339,300 4,196 1,258,800Sunflower 204 30,600 972 145,800Cardamom 52 52,000 56 56,000Broad beans 688 206,400 1,254 376,200Sesame 52 20,800 - -
Source: Kilindi District Investment Profile, 2008
According to the table 5 above, maize and beans are most widely grown food crops in Handeni. Sunflower is acknowledged to be a relatively new crop in the district but its production is picking up drastically. It is acknowledged that in order to boost and commercialize production of sunflower, there is need to ensure timely supply of high quality seeds and massive sensitization of farmers to produce sunflower is also paramount. From the district figure in the table above, 972 tons of sunflower was produced in 2009. Using the same figure, it can be estimated that about 392 acres of land was cultivated.
Other DistrictsIn Muheza District, sunflower is grown in Potwe and Kwafungo wards. Sunflower is acknowledged to be a relatively new crop in the region. However, there is knowledge of the potential of the crop to improve the incomes of the poor households either through substituting their incomes spent of purchasing cooking oil or through providing cash when the crop is sold. As such, the district is interested in promoting the crop and there is already some experience to share and lessons to learn from the initiative of Passionate Fathers in the sunflower sub sector in the district.
In Pangani District, sunflower is a newly introduced crop in the district. Bushiri, Kimanga, Nkalamu, Mwera, Tungama and Ubangaa are the wards currently producing sunflower. Production is still low although Mivumoni a faith based organisation is trying to promote it. Currently, farmers scattered over the district is growing it. The district is trying to promote the enterprises as food and cash crop. Also the soils and climatic conditions favour the production of the crop. Farmers have been extracting oil from sunflower from Mivumoni and the oil is used for household consumption. The latest information is that farmers are accepting the crop as is seen by increasing adoption of the crop. Availability of seeds is the main problem limiting the adoption of the enterprise. Seeds are currently being brought all the way from Arusha and some farmers borrow seeds from other farming households. There is no reliable source of seeds for farmers.
In Mkinga District, Maramba division is considered favourable for sunflower production. However, there is no reported production of sunflower as per the district information.
4.1. Sub sector definitionA sub sector can be defined by either a raw material or a final product/service for a particular market. Asub sector is broadly defined to include all the firms that transact with each other in order to supply a
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particular set of products or services to final consumers. A sub sector include producers, processors, input suppliers, exporters, retailers, etc. It is from specific sub sectors that value chains are derived. For our study and program purpose, the sub sector is defined as ‘’sunflower sub sector for local markets’’ local market being the national market.
As per the definition, the sub sector is sub divided into Sunflower cooking oil for household use and sunflower seed cake for livestock feeding, both for local markets. Also sunflower seeds for crushing is considered as a product of the sub sector. Other derivatives / products of sunflower is taken cognisance of. In the development of the sub sector, and also in the short run, emphasis is on sunflower oil and animal feeds. As the sub sector grows there will be other opportunities to develop derivative products by exploring and supporting the development of alternative uses of other by-products as they will emerge. Derivative products of sunflower are as follows;
Sunflower mealSunflower meal is the by-product of the oil extraction process. Non-dehulled or partly dehulled sunflower meal has been substituted successfully for soybean meal in equal protein diets for ruminant animals, as well as for swine and poultry feeding. Sunflower meal is higher in fiber, has a lower energy value and is lower in lysine but higher in methionine. Protein percentage of sunflower meal ranges from 28% for non-dehulled seeds to 42% for completely dehulled seeds. The color of the meal ranges from grey to black, depending upon extraction processes and degree of dehulling. In Tanzania, sunflower for animal feeding does not undergo the hulling dehulling processes. Remains from the expellant is taken and fed to animals.
Industrial Uses of sunflower OilSunflower soapstock is a concentrated solution of salts of fatty acids obtained in the refining of edible oils. The price of sunflower oil usually prohibits its widespread use in industry, but there are several applications that have been explored. It has been used in certain paints, varnishes and plastics because of good semidrying properties without color modification associated with oils high in linolenic acid. In Eastern Europe and the USSR where sunflower oil is plentiful, sunflower oil is used commonly in the manufacture of soaps and detergents. The use of sunflower oil (and other vegetable oils) as a pesticide carrier, and in the production of agrichemicals, surfactants, adhesives, plastics, fabric softeners, lubricants and coatings has been explored. The utility of these applications is usually contingent upon petrochemical feedstock prices.
Sunflower seed eaten as snackThe use of sunflower seed in human diets as a snack has grown consistently over the past 15 years. Varieties used for snacks are not for oil and are characterized by a larger seed size and require slightly different management practices. Today, about 25 percent of U.S. confection sunflower seeds are consumed domestically in shell. Most are roasted and salted in the shell and eaten as a snack. Recently, sunflower seeds became available in flavors such as barbeque, sour cream & onion, Cajun, ranch and hot & spicy. Sunflower seeds have found their niche in the large market of people who enjoy outdoor activities, subsequently, sales peak in the summer months.
4.2. Actors and FunctionsThe following sections describe the actors currently present in the sub-sector and the functions that they perform. Analysis of the actors and functions will look into the primary and secondary actors and their respective roles. Primary actors are those involved in primary productive activities of the sub sector (input supply, production, processing and marketing). Secondary actors are not directly involved in the primary activities of the sector but their actions affect the operations of the sub sector. Secondary actors offer support and support services to the sector. Some of the secondary actors include policy and
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regulatory support institutions, financial support institutions and BDS providers. Analysis will feature the two categories of actors.
4.2.1 Primary ActorsInput supplyThe main input for sunflower growing is seed. To some extent farm implements are also necessary. Improved sunflower seed is hard to find in Tanga city. Farmers in Muheza (Potwe ward and surrounding villages of Kwafungo ward) where sunflower is grown get seed from Passionists Fathers, a faith based organisation in the area. Sunflower seed (branded Panaar) is sourced from East African Seeds Arusha. A kilo of high quality sunflower seed in Muheza costs Tshs 6,000 (Panaar variety), an amount which most farmers find expensive. Consequently, most farmers use their own seeds from previous seasons mainly because of high price and low availability of seeds- which usually results in low yields. In Handeni, the district stocks sunflower seeds and also encourages private dealers to supply seeds. The districts subsidises the transport costs for seeds and a kilo of seeds is sold to the farmers at Tshs 2500 instead of Tshs 3000, the price of seed from private dealers. In Korogwe District, sunflower seeds are only available from private dealers.
ProductionGrowing sunflower for sunflower seed is primarily by small scale farmers. Most farmers grow sunfloweron averagely 1.2 to 2 acres of land, an average which is more than a half below the potential. Average potential is estimated at 2 acres per farmer. Farmers do not use pesticides, insecticides or fertilizers and simple tools (hand hoes and other hand implements) are widely used. Post harvest management is an important aspect of sunflower production as well. Normally sunflower is harvested manually. In Tanga region sunflower can be grown in both long rainy season (March to June - known in Swahili as Masika ) and short rainy season (October to December – known in Swahili as vuli). Depending on the variety of Sunflower and the soil fertility, an acre can produce between 7 to 16 bags weighing between 60-70 kilograms. Sunflower growing is a highly profitable venture as can be seen from the profitability –depicted by simplified gross margins.
Sunflower production in the region is reasonably low because of the problems with marketing. Markets stimulate production. Farmers are risk averse and they are more willing to produce what they can sell as opposed to what they can not. There have been instances where farmers have failed to sell their harvest and they have remained unwilling to produce in the next production seasons.
Processing National processing capacity is estimated at about 200,000 metric tones of sunflower seeds annually11. However, processing is being done way below the national processing capacity. This is due to insufficient volumes of sunflower seeds for crushing. Total potential processing capacity in Tanga region can be estimated at about 8 metric tones a day (about 3,000 metric tons annually), about 2% of the national estimated capacity. But at the moment the actual processing capacity is only about a half of the potential capacity- which is working only when there is harvest and seeds to mill. There is one processor of edible oil in Tanga city (with a capacity of about 1.2 metric tons a day). He processes most oil seed crops (sunflower, palm seed, coconut and alanblankia). He supplies oil (in some cases sunflower oil) to the soap factory in Tanga City.
Passionate Fathers is a church based organisation which has introduced sunflower in Muheza District three years ago. The organisation processes sunflower and sells sunflower oil to the nearby surrounding. The processing capacity of the installed equipment is about 2 metric tons a day.
11 National processing capacity estimate by the Director, Mount Meru Millers
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In Handeni, there are two power driven processing plants. One processing plant at Kabuku, formerly run by a women’s group had stalled due to managerial problems but under the district strategy of promoting sunflower production, plans are leading to reviving its operation. The combined processing capacity of the district can be estimated at about 5 metric tons a day.
In Korogwe district, Mashewa Women Saving and Credit Society have a processing machine with an installed capacity of about 1.5 tons a day. However, the machine is not operational due mainly to unavailability of seeds. Also the group is lacking a strong management to steer the society although they expressed concern and the need to reorganise and start operation. Also the district plan is to revive the group. In Pangani, processing is being done at Mivumoni, a church based organisation.
In Tanga town, Shell Craft Limited has a crushing capacity of 20 tons a day. The plant is integrated and does crushing, 1st level refining, filtering, neutralising, bleaching and deodorising. A machine for fractioning is what is needed. By-products from edible oil processing is used for soap manufacturing, husk energy and animal feed making. Currently, the factory is not working due to in-availability of seeds. Traders (middlemen, retail and wholesale)There are no known trades of sunflower seed in Tanga city, Muheza, Korogwe and Kilindi. In Handeni, it was mentioned there were traders coming from Dar es Salaam and some from Moshi to buy sunflower seeds during peak seasons of production. It was not possible to trace the traders, as their contacts were not readily available.
In Korogwe, it was reported Mohamed enterprises was buying sunflower from areas of Kangata and Kobuko in Handeni district. Also traders and owners of small mills in Moshi are said to be buying sunflower seeds from Handeni. Mount Meru sunflower oil miller reported buying sunflower seeds from suppliers across the country. Some of the suppliers are reported to be buying seeds from parts of Handeni.
4.2.2 Secondary Actors Confederation of Tanzania Industries (CTI)CTI is an independent, self financed legally constituted organisation that serves its members by speaking out on their behalf. CTI has the objective of presenting the view of members and cooperate with government of the day, local authorities, and other bodies essential to industry. CTI also aims at promoting a competitive business environment in Tanzania in which sustained development is possible.CTI can support the campaigns to make sunflower sub sector viable in the region by way of acting as source of information on processing, and associated industries for potential investors and the public sector. Also CTI can act as information source on matter pertaining edible oil industry.
The Regional, Districts and local authoritiesThe regional, districts and local authorities are key stakeholders in the promotion of the sub sector. Firsts, the regional and district authorities should take the lead to spearhead and promote the sub sector through campaigns and sensitisation of farmers on sunflower growing. Also farmer training and extension services remain a key role of the districts.
World Vision TanzaniaWithin its program areas of promoting agriculture in the region, World Vision had already been supporting is providing seeds and training in agronomy. World vision is still in position to support the promotion of the sub sector by extending it services to also sensitise farmers to produce sunflower.
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The Centre for Agricultural Mechanization and Rural Technology (CAMARTEC)The national mandate of CAMARTEC is to undertake applied Research and Development, promotion, adaptation and dissemination of appropriate technologies in the fields of agriculture mechanization and rural technology. The centre’s key functions are;
i. Promote and carry out applied research to facilitate the designing, adaptation and development of machinery and equipment suitable for use in agricultural and rural development.
ii. Developing and manufacturing approved prototype and agricultural technologies and evaluate their suitability in rural agricultural production.
iii. Developing and manufacturing approved agricultural and rural technology prototypes and evaluate their suitability for adoption in our local situation.
iv. Performing tests on all types of machinery and equipment intended for use in agricultural and rural development in Tanzania.
At the moment CAMARTEC is not directly involved in any activity in Tanga region but has supplied oil-pressing machines (of type BP 30) to Handeni through the district programs for sunflower sub sector development and elsewhere in Kagera Region. CAMARTEC is also a centre to promote agricultural mechanization (both ox- drawn and powered implements). We envision the role of CAMARTEC to be that of promoting proper technology of production- dissemination of ox-drawn technology in order to enhance good tillage and increase harvests.
Tanzanian Engineering and Manufacturing Design Organisation (TEMDO)TEMDO’s mandate is to enhance value addition to farm products especially after harvests. TEMDO is researching, fabricating and testing technologies for small scale processing in order to promote value addition. TEMDO is R&D institution and not supplier of machinery. TEMDO has rolled out sunflower oil processing technology (Oil expellers) suitable for SME processors. TEMDO is also coming up with filter press for oil filtering. Further research and trials by TEMDO is expected to lead to the establishment of an affordable small scale oil refinery for an SME.
Tanzania Chambers of Commerce Industry and Agriculture (TCCIA)Established in 1988 with government support, TCCIA is an autonomous organization mandated to represent the interests of the private sector in Tanzania. In addition to providing businesses with information, advocacy, support and promotion services, it is the chief national instrument of dialogue between the public and private sectors. It has a regional branches in Tanga Town and other branches in Muheza and Korogwe towns. Private sector investment Presently, traders supplying seeds are spread all over the region. Traders are based at towns. Providers of other business development services (e.g. trainings) are not available, probably because of the lack of knowledge on business opportunities available or because of the low demand for their services owing to the fact that the sub sector is relatively young in the region. . There is need to attract private sector and BDS (Business Development Services) providers into the promotion of sunflower in the region. The private sector can enhance efficient delivery of services in aspects where the local government is limited.
4.3. Tanga Region Sunflower Sub Sector Map To enable a quick visualization of the subsector, we will make use of a sub sector map. The map combines the supply channels of sunflower seed, oil and seed cake. Sub sector mapping is a diagrammatic and summarized presentation of the sub sector. A sub sector map cannot present all that is on the ground. However, it should be able to enhance not only a faster but also broader
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understanding of product flow and primary actors in the shortest possible time. The sunflower sub sector map of Tanga region is presented in map 2 below.
Sunflower seeds, oil and seed cake volumes going through the sub sector map are low. There are about 10 sunflower producing groups of farmers in Handeni and a few other groups in Kilindi. In Korogwe, Mashewa Women Saving and Credit Society was growing and processing sunflower but due to a combination of management and high seed costs, they have stopped production. The group own 30 acres of land, which was given, to them for sunflower production. There are also individual farmers growing sunflower on plots ranging from 3- 5 acres. Individual farmers constitute the majority of sunflower production. In Handeni, the 4 groups each have about 40 members. KIKIWANI in Misima have got 2 acres of land on which they are being taught sunflower agronomy through the FFS approach. Sunflower seed cake is used for feeding animals. In our study, we focused more on sunflower seeds for oil production. As such seed cake is indicated with an arrow going out of the sub sector map. The analysis of the sub sector concentrated more on sunflower seed for oil because it is currently the main product coming from the sub sector, with a chance of being scaled up into the formal sector. The seed cake is mainly going to the informal markets.
Important to note also is that imported cooking oil is seen in shops and stalls in both rural and urban centres of the region. Vegetable oil brands commonly available in the region included Sunola and Korie. In our sub sector map, importation of edible oil into the region is shown an arrow coming into the retail outlets in the region. An arrow going out of the sub sector map denotes sale of sunflower seeds to traders coming from outside the region. The study traced traders coming from Dar es Salaam to buy sunflower seeds especially in Kabuku during the season for production.
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Map 2: Tanga Region sunflower oil sub sector map
Key to the sub sector map
Sunflower quality seeds Sunflower seeds for oil extraction Sunflower seed cake for livestock feeding Sunflower edible oil
4.5. Economic and Profitability Analysis
Globally, two types of sunflower are grown: (1) those for oilseed production and (2) non-oil seed for the home and bird food markets. The oilseed hybrids, which may be either linoleic or oleic types generally, are black-seeded and have a thin hull that adheres to the kernel. Seed of the oilseed varieties contain from 38 to 50 percent oil and about 20 percent protein. Nonoilseed sunflower also has been referred to as confectionery sunflower and striped or large-seeded varieties. Nonoilseed sunflower generally has striped seed and a relatively thick hull, which remains loosely attached to the kernel, permitting more complete dehulling. Seed of the nonoilseed hybrids generally are larger than those of the oilseed types and have a lower oil percentage and test weight.
Channel I Channel II Channel III
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For analysis of profitability at farmer and processor level, simplified gross margins are used. Gross margins express the direct costs and the gross profit as a percentage of the selling price. Gross margins make it easier to compare results since results are presented in percentages.
The profitability analysis is based on optimum sunflower yield for the sunflower variety for oilseed production (record). The first scenario is of optimum yield attainable from application of scientific production practices. Sunflower yield is a function of two factors:
(i) Good agronomic practices such as spacing, weed control, pest and disease control, fertilizer application and water supplementation through irrigation. In the aspect of water supplementation however, sunflower does not tolerate water-lodging conditions or too much/heavy rains. That is why in the year with normal rains, sunflowers are planted at mid-season to avoid them been succumb to too much rains.
(ii) Genetic potential: Hybrid varieties yield more than open pollinated varieties. However, they are more input demand than the open pollinated varieties. For QDS production only open pollinated varieties are allowed according to Seeds act of 2003 (sent as separate attachment).
Data from research indicates yield and productivity of sunflower as shown in Table 6 below.Table 8: Sunflower optimum yieldVariety Optimal production
altitude range (M.a.s.l)Duration to maturity (days)
Grain yield(Tan/Ha)*
1. Record (open pollinated) 0 - 2000 110 -130 1.5 - 2.02. CRN 1435 (hybrid) 900 - 1500 90 -110 2.0 - 2.53. PAN 7352 (hybrid) 500 -1500 110 -120 1.5 - 2.54. Kenya Fedha (open pollinated)
1500 - 2250 106 3.0 – 3.5
Source: SUA research and experiences.
*1 hectare (ha) = 2.47 acres, 1 Ton = 1,000 kg. If 1 bag full of sunflower seeds weighs 65 kg. Then 2,000 kg = 30 bags. For 1 acre we get 12.5 bags for the variety call Record.Total production cost for an acre (Tanga) is estimated at TShs 103,000 Total Revenue (sales) = TShs 406,250Gross Profit = 303,250Simplified gross margin = 75%
Profitability at Farmer LevelsIn the analysis of profitability at farmer levels, a comparative analysis is made. First we compare two regions (Tanga and Manyara) in terms of farmer profitability using the current agronomic practices We then compare the profitability of current practices in these two regions with profitability farmers could have got from using best practice. A comparison is made using record variety of sunflower. Further simulation of profitability is also made of farmer scenarios of when they sell sunflower seeds and when they process seeds and sell oil and seed cake.
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Table 9: A comparative analysis of farmer profitabilityCurrent practice
Costs Tanga ManyaraSeed 5000 5000Labour 98000 70000Total costs 103000 75000Yield 520 390Revenue 260000 195000Gross Proffits 157000 120000SGM 60 61.54
Source: MMA Study May, 2009
In both regions, profitability obtained from current practice is still below lowest profitability attainable from application of best practices. Farmers in Tanga region can increase profitability by 15% from a margin of 60% (from current practice) to a gross margin of 75% using best farming practices.
Profitability at Production (Farmer level): Scenario 1: When a farmer sells sunflower seeds
Assumptions The calculations are based on production on an acre of land Seeds are bought at TShs 2,500 per kilo. An acre needs 2 kilos of seeds costing TShs 5,000 Land preparation for an acre costs TShs 20,000 Planting costs an acre costs TShs 6,000 Weeding an acre costs TShs 12,000 Harvesting an acre costs TShs 8,000 Consider that an acre yields on about 8 bags each about 65 Kgs. Price per kilo of sunflower is TShs 500
Table 10: Profitability when a farmer sells sunflower seedsDescription Costs Unit TotalSeeds 2.500 2 5.000 Land preparation 20.000 2 40.000 Planting 6.000 1 6.000 Weeding 12.000 1 12.000 Harvesting 8.000 1 8.000 Hitting 2.000 8 16.000 Transport Costs 2.000 8 16.000 Total Costs 103.000 RevenueSale of seeds 500 520 260.000 Gross profit 157.000 Simplified Gross Margins 60%
Source: MMA Study May, 2009
Profitability at Production (Farmer level): Scenario 2: When a farmer sells sunflower oil and seed cake
Assumptions The calculations are based on production on an acre of land
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Seeds are bought at TShs 2,500 per kilo. An acre needs 2 kilos of seeds costing TShs 5,000 Land preparation for an acre costs TShs 20,000 Planting costs an acre costs TShs 6,000 Weeding an acre costs TShs 12,000 Harvesting an acre costs TShs 8,000 Consider that an acre yields on about 8 bags each about 65 Kgs. A bag of 65kgs yields about on average 18 litres of sunflower oil. A litre of oil costs TShs 2500 The cost of processing is TShs 80/kg if a farmer is taking the seed cake with him/her A bag of sunflower when milled gives about 45 kgs of seed cake The price for a kilogram of seed cake is TShs 150
Table 11: Profitability when a farmer sells sunflower oil and seed cakeDescription Costs Unit TotalSeeds 2.500 2 5.000 Land preparation 20.000 2 40.000 Planting 6.000 1 6.000 Weeding 12.000 1 12.000 Harvesting 8.000 1 8.000 Hitting 2.000 8 16.000 Transport Costs 2.000 8 16.000 Processing costs 80 520 41.600 Total Costs 144.600 Revenue Price /Unit Units TotalSale of sunflower oil 2500 144 360.000 Sale of seed cake 150 360 54.000 Total revenue 414.000 Gross profit 269.400 Simplified Gross Margins 75%
Scenario 3: When a farmer is leaving seed cake with the processorAssumptions
The calculations are based on production on an acre of land Seeds are bought at TShs 2,500 per kilo. An acre needs 2 kilos of seeds costing TShs 5,000 Land preparation for an acre costs TShs 20,000 Planting costs an acre costs TShs 6,000 Weeding an acre costs TShs 12,000 Harvesting an acre costs TShs 8,000 Consider that an acre yields on about 8 bags each about 65 Kgs. A bag of 65kgs yields about on average 18 litres of sunflower oil. A litre of oil costs TShs 2500 The cost of processing is TShs 50/kg if a farmer is leaving the seed cake with processor A bag of sunflower when milled gives about 45 kgs of seed cake The price for a kilogram of seed cake is TShs 150
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Table 12: Profitability when a farmer sells only oilDescription Costs Unit TotalSeeds 2.500 2 5.000 Land preparation 20.000 2 40.000 Planting 6.000 1 6.000 Weeding 12.000 1 12.000 Harvesting 8.000 1 8.000 Hitting 2.000 8 16.000 Transport Costs 2.000 8 16.000 Processing costs 50 520 26.000 Total Costs 129.000 Revenue Price /Unit Units TotalSale of sunflower oil 2500 144 360.000 Total revenue 360.000 Gross profit 231.000 Simplified Gross Margins 64%
Profitability of SME Processor We will also ascertain profitability at the processing level. Two scenarios exist at the processing level. The first scenario is when a processor buys seeds, mills it and sells sunflower oil seed cake. The second scenario is when the processor processes only seeds farmers have brought and he only charges a fee for milling sunflower seeds.
Scenario 1: When a processor buys seed mills and sell oil and seed cake Assumptions Profitability is calculated basing on I bag of sunflower processed A bag weighs 65 kilograms 45kgs of seed cake is obtained from milling one bag A kilo of sunflower seed costs TShs 500 Labour costs are estimated at TShs 2500 per day. About 50 bags are processed in a day. Labour
costs for milling one bag is TShs 50 Transport is estimated at TShs 2000 depending on the distance from the milling plant to where the
seed is boughtTable 13: Profitability when a processor buys seed, mills and sell oil and seed cake CostsDescription Cost Unit TotalSeed costs 500 65 32500Transport 2000 1 2000Labour costs 50 1 50Total costs 34550RevenueSunflower oil 2500 20 50000Sunflower seed cake 45 150 6750Total Revenue 56750Gross Proffit 22200SGM 39%
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What can be deduced for the profitability analysis is that the enterprise is highly profitable to a farmer as can be seen from the gross margins farmers make. Profitability is even higher when a farmer does value addition and then sells sunflower oil and seed cake. Farmer profitability is higher due to the current higher price of sunflower seeds. In low price seasons (with prices falling as low as TShs 250 or less) farmers profitability reduces by nearly a half the current profitability.
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5 TANGA REGION AND SUNFLOWER SUB SCTOR DYNAMICS
5.1 Driving ForcesAt a global level, macro and macro economic issues (exchange rates) affect import and export trade of oil. A high dollar to local currency exchange rate reduces trade since importation becomes costly.
The zero tariff rates for the East African block means ease of imports and exports for all products, oil inclusive. In the case of oil, this will enable, ease of importation form member countries.
Price of sunflower oil compared to imported oil is a very significant driving force as well. At present, sunflower oil (TShs 2,500 / litre) costs more than the imported oil (costing as low as TShs 1,300). The price variations significantly affect the effective demand and consumption of sunflower oil. The price issue has been blamed on unfavourable tax regimes which favour importation of palm oil which is blended- sometimes with sunflower oil and sold cheaply across the country.
Over the years, there has been a growing local market for sunflower oil. Most importers of crude palm oil blend palm oil and brand it sunflower oil because consumers have shown a preference for sunflower oil probably owing to the health reasons associated to it.
Importation of crude palm oil still remains a big driving force of the dynamics of the edible oil industry. Imported crude palm oil processed and blended in the country is a big hindrance to the development of the sub sector.
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5.2 Constraints, Opportunities and Viable Business SolutionsTable 14: Constraints and opportunitiesIssues Key Constraints Opportunities Viable business Solutions
Inpu
t sup
ply
Lack of /scarcity of improved seeds which forces farmers to use own seeds leading to low yields
Hand implements (hand hoes) predominantly used in production leads to poor tillage hence low yields
Limited knowledge of the private dealers on the variety suitable for different agro ecological zones leads to supply of inappropriate varieties hence different results and farmers discouragement
Opportunity for growth of private entrepreneurs, R&D institutions to supply sunflower seeds and implements at the competitive market prices (BDS need for the private sector investment) to increase production of sunflower.
A market need for the promotion of animal drawn ploughs (Ox ploughs) for better tillage and increasing production of sunflower
A business opportunity for training of the private dealers, village agricultural facilitators (peer educators) and (or) lead farmers to provide seed verification.
Encourage community seed production and multiplication
Private sector supply of seeds and other inputs.
Private sector to provide training in agronomy and other relevant subjects
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Prod
uctio
n
Diseases such as downy mildew leads to low yields and sometimes no yield at all
Pests (mainly) birds attacking sunflowerbefore harvests lead to crop loss to a farmer
Unreliable rainfall leads to low yields and poor harvests by farmers.
Inadequate knowledge on sunflower production techniques due to poor and in some cases inadequate extension services leading to poor crop management and eventually low yield.
Higher production costs making sunflower seeds and oils expensive
Low acreages for growing sunflower leads to low volumes realised in aggregate.
Low quality of seeds due to poor post harvest handling
Opportunity for market for inputs such as fungicides for the private sector to supply on a competitive basis and grow their businesses
Opportunity for private sector trainings in proper agronomic practices in sunflowercultivation and crop management
Farmers are not using their land holdings optimally. There is an opportunity for increased production resulting from increased acreages cultivated
Opportunity for crop insurance company to develop appropriate product
Create favourable environment and encourage private entrepreneurs to supply insecticides and herbicides
Train farmers and extension staff in basic agronomy through QDS methodology
Encourage private sector to train farmers and extension staff in basic agronomy through QDS methodology
Encourage farmers to increase land acreage used in sunflower cultivation
Attract insurance company to invest in crop insurance for farmers.
Farm
er o
rgan
isat
ion
Weak organisations of farmers making them unable to reap from the advantages of group actions and bulk purchase.
Lack of commitment and impartiality among group members leads to retarded progress in the groups.
Dependency of groups on handouts makes them not work hard and consequently poor production
High Illiteracy levels at the groups levels makes it hard to get good leadership
Presence of success cases of group initiatives elsewhere for the farmers in the region to learn from.
Farmer Field Schools provide a decent opportunity for illiterate farmers to learn on site also outputs from FFS gardens can provide a good motivator for the farmers
An opportunity for private sector actors to train in and facilitate strengthening of farmer groups for proper handling of group dynamics
Strengthening of farmer groups for easy delivery of training and communication of market information.
District, and private sector service providers to strengthen farmer groups
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Proc
essi
ng
Processing skills are lacking mainly among small holder processors, leading to poor quality products that are not competitive with the market preference
Low efficiencies of some processing machines, needing a lot of labour time and energy hence low productivity
Presence of installed equipments for processing in at least all the major sunflower growing districts of the region
Opportunities of training in processing by private sector entrepreneurs
Suppliers of machines to give after sale services and training in equipment operation.
Use services of research institutions and private sector to train SME processors in sunflower processing
Encourage suppliers of processingequipments to (give after sale services) i.e train in machine operation and maintenance
Mar
ketin
g
Unreliable market and low prices for sunflower seeds, mainly due to low volumes in the region
Stiff competition between sunflower oil and imported edible oil leading to low consumption of sunflower oil and hence its small market share of the total edible oil market.
Unfavourable tax regimes which favours cheap edible oil importation
Poorly organised farmer groups which are unable to undertake group marketing
High demand for sunflower oil due to health reasons leads to increased market opportunity.
The opportunity to increase domestic production and substitute imports for edible oil makes sunflower oil ideal for promotion.
Opportunities for lobbing for favourable policies and the policy that favours development of the private sector
Models for Farmer Organisations for group marketing exists
Provision of market information to farmers.
Development of policies to support import substitution
Assessment and development of relevant ware house receipting systems around clusters of farmer groups
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Fina
nce
No recognised finance for small scale agricultural enterprises/ farmers hence limited possibility to increase production beyond a farmer’s household effort.
Limited financing mechanisms for large scale investment in farming of sunflower
High initial capital investment required for setting up a large scale processing plant limits investment in processing and domestic value addition.
Presence of savings and cooperative society initiatives provides an opportunity to mobilise group savings
Financing opportunities are available through contract farming
Opportunities for the installed capacity to take up the volumes seeds produced
Opportunities for gradual upgrading of the existing processing plants and increase capacity as production increases
Stable source of finance for farming
Mobilisation of finance through the group members and bulk purchase
5.3 Market Analysis (Demand and supply) of Viable Business Solutions Table 15: Viable Business SolutionsBusiness solution Estimated demand of business solution Potential suppliers of business solution
Community seed production and multiplication (QDS).
Private sector seed supplies
33.5 metric tons of quality seeds to be delivered to farmers at an affordable price (about TShs 2500 the current price of seeds or less).
TOSCI, ASA
KIBO Seed Company, East African Seeds, ARI Ilonga, Monsanto South Africa, Pannar Seed Co., Kenya Seed Co.Ltd
Training in basic agronomy, disease control and pest management and other sunflower production related subjects
120,294 Farmers in Handeni currently growing sunflower and more farmers in Korogwe (Mashewa and Gombero), Kilindi, Pangani, Muheza need training in basic agronomy for sunflowercultivation.
SUA, TOSCI, ASA
Private sector firms (to be identified)
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Institutional strengthening of farmer’s groups and associations
About 3 farmer clusters in Korogwe, and 2 in Muheza and 6 in Handeni need group organisational and management strengthening
FAIDA Mali,
Private sector organisations (to be identified)
Training of SME processors in sunflower processing, entrepreneurship and business management
3-farmer clusters (1 in Mashewa and 2 in Handeni – Kabuku and Misima) needtraining in use and maintenance of processing machines and equipments.
Demand for business management skills, record keeping and entrepreneurship
TEMDO
Private sector organisations
Market information provision Demonstrated demand for market information for inputs
With increased production market information for farm outputs will be an issue.
The Communication and knowledge management strategy for rural business (MUVI component).
Traders and middlemen
Financing for sunflower production and processing Demand for credit for purchase of processing equipments
Demand for financing for inputs (Seeds)
PASS, Leasing and (or) hire purchase of equipments from suppliers, bank loans e.tc
Mobilisation of finance through the group members and bulk purchase
35
The above business solutions to constraints in the subsector should develop the sub sector to a competitive one. An analysis of the current subsector competitiveness is presented below. The outcome of the competitiveness analysis, coupled with the business solutions above will lead us to a presentation what value chains and sub sector development intervention models we envisage for the region.
5.4 Subsector/ SME CompetitivenessTo fully understand the dynamics of the sunflower sub sector, a competitive analysis of the sunflower industry was conducted and the output is presented in the figure below.
Figure 2: A competitive analysis of the sunflower industry
The following conclusions can be derived from the national sunflower edible oil industry analysis;
Because of no entry barriers, and fair ease of entry, there is need for current actors/processors in the sector to stay alert and monitor market developments and also the need to promote investment in industrial processing because of the ease of entry.
Because of seed production being smallholder farmer based, and also coupled with the scarcity of seeds, side selling may hamper contract farming. Also there is need to increase productivity of seeds with good oil yield (especially for processing) and also at a macro level, increase commercialisation of
New Entrants: There are no entry barriers Unmet market demand Technological options + no specific
regulatory barriers, Limited entry barrier for double refinery due to high capital requirement
Few established brands
Sunflower edible oil in Tanzania
Substitutes Cheap blended edible oil I domestic market Sunflower and other oil imports (e.g corn
oil) Blended edible oil imports Animal fats
Buyers Growing demand
for healthy oils Large consumer
base (low income consumers who are price sensitive)
Suppliers SHF based hence
scarcity of seed. Lack of
commercialisation of enterprise
Side selling is common
Low productivity (unstable base)
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the sub sector. There is also need to improve agronomic practices for crop cultivation through a comprehensive and an integrated service package.
It is noted there are many price sensitive low-income consumers of cheap edible oil. But there is also a growing concern for healthy edible oils among a section of middle and high-income consumers. The focus should be on a marketing strategy hinged on niche natural health aspects for the sunflower oil and also a sound import substitution agenda.
The high and middle-income consumers need to be targeted through appropriate packaging and branding.
With the knowledge of competitiveness challenges to be addressed in order to enhance a viable sub sector and value chain development, there is then need to present proposed sub sector and value chain development models and interventions. Our analysis shows there is a young and emerging value chain. In the following chapter, we will show how we got to this conclusion and then present a value chain model we envisage for the region. A sub sector intervention (Business) model will then be presented and recommendations of strategies to develop the sub sector w ill be then be presented.
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6.0 SUB SECTOR VALUE CHAIN DEVELOPMENTWe identify value chains by way of looking at key element of a value chain; sharing of economic gains, governance and market focussed collaborations. Economic gains are concerned with the generation and distribution of returns arising from the various functions, e.g. design, production, packaging, marketing, and recycling, in the chain. Economic gains is brought about by a competition in the market and hence the need for the entrepreneur to innovate in order to survive in a competitive market.
Governance ensures that interactions between firms along a value chain exhibit some reflection of organisation rather than being random. Value chains are governed when parameters requiring product, process and logistic qualification are set which have consequences up and won the value chain encompassing bundles of activities, actors and functions. Coordination usually involves managing these parameters; however, it does not require that a single firm is responsible for it. Value chain governance role is usually undertaken be a chain leader who is usually strategically located and fully knowledgeable with the dynamics of the chain.
Collaboration of value chain participants is key and is usually market focused. This is one of the distinguishing features of a value chain from other traditional business relationships. Market focused collaboration is when different business enterprises choose to work together to produce and market products and services in effective and efficient manner in order to meet the needs of targeted consumer (s).
With the above key elements of the value chain, and also with a critical reflection into the dynamics of the sunflower sub sector in Tanga region, it can be pointed out there is an emerging trend of business relationships tending towards establishment of a value chain especially in Handeni district. There have been traces of innovation in processing, although with a loose focus to the market. Production and processing is still to a large extent for home consumption. No element of chain governance can be pointed out and collaboration of chain actors is noted to be loose, informal, and not market focused. Opportunities for wider collaboration are scarce given that (except for farmers-producers), there are few players. In an organized market, where product flows are streamlined, value chain development would entail identifying strategic collaboration opportunities for businesses (firms) to work together from product inception to consumption targeting a specific market in a competitive manner.
Equally important is to identify the few support organizations that are already working in the sub sector and are willing to provide leverage and support towards sunflower sub sector development activities.
We therefore note that the sunflower sub sector in Tanga region is at an infant phase of development, with low volumes of production (few farmers and on average less than 4 acres farmed per household)and few processors (Currently only 2 processing firms are working with a combined capacity of about 4 tons a day) and small volumes being processed. Similarly volumes of sunflower seeds sold out of the region are very small (if any) and in most cases sold through an un established markets or contacts(sold to spot buyers). Basing on the above observation, it can be concluded that the value chain is also at its infancy. It is young and emerging with potential for growth. Profitable gains are starting to emerge to farmers and a few processors, market focused collaborations is not yet evident although a chain leader is identified. As such, efforts need to be put to an overall development of the sub sector because the development of a viable sub sector is the foundation for the emerging value chain to grow.
6.1 Value chain developmentAgainst the background that both the sub sector and value chains are very young we would like to move to a step of visualising an ideal chain for the region and where we would like to move the sub sector
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through the planned interventions. We will call this a proposed value chain for development. This section will present an idealised value chain for development, as we perceived it. The figure below is a presentation of the proposed value chain for development.
Figure 2: Proposed value chain for development
From the figure above the main input for sunflower production (seeds) will be produced and supplied through a community based approach (QDS). We also envisage the role of the private sector in seed supply especially in the initial stages of the sub sector development where we need an adequate network for supply and distribution of seeds.
Production of seed for sale will be through organised clusters of farmers. QDS methodology of seed production will be implemented through the farmers’ clusters. Selected farmers will be able to produce seeds for sale. Also in the clusters, farmers will be trained sunflower agronomy. The program will workwith the district extension structures, with the support of PASS. The farmer clusters will belong to a bigger farmer organisation at either the district level or regional level. The FO will bulk produce and market it for processing. At a later stage SME processors will be integrated to the large scale processors chins to produce oil for double refining.
InputSupply
FO
Semi urbanconsumers
Ruralconsumers
Urban upmarketconsumers
Urban middle incomeconsumers
Large processors
SME Processor
SUA/ASA/TOSCIPrivate sector
SUA/DALDO/PASS
RUDI SIDO Branding organisation, TBS, TFDA
INPUT SUPPLY PRODUCTION PROCESSING CONSUMPTIONMARKETING
SHF
SHF
M/LSF
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6.2 Business model for sub sector development in Tanga regionBelow is a diagrammatic presentation of the business model for sunflower sub sector development in Tanga region.
Figure 3: Business model for Tanga Region sub sector development
Premises/ Assumptions for implementation of the business modela) Comprehensive sub sector development approachWe envisage a comprehensive and integrated model for the development of the sunflower sub sector in Tanga region. The investment program pictured above will integrate and draw resources from both private and public investment with the ultimate motive to benefit the rural economically vulnerable majority and contribute to the national objective of poverty reduction. We also envisage that the investment program be approached in phases. The phases might overlap.
From the sunflower seed production node, the model provides for increasing and making available and affordable seeds for planting through a community based seed multiplication scheme (QDS). The project will work with SUA, ASA and TOSCI in the seed multiplication initiative. To enhance wider coverage and ensure seed availability the private sector suppliers will also be encouraged to supply certified seeds through an accommodative business environment.
SHF Cluster
Inputs (SUA, ASA, TOSCI)
Finance (PASS, TAP)
Crop Insurance (Experience from
MicroEnsure,)
Small and medium scale processors
VCD FACILITATORSIDO/LGAs (MUVI RBSS)
SHF Cluster
SHF Cluster
Medium and large scale farmers Cluster
SHF Cluster
Contract farming + Embedded services
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The investment plan has inbuilt options for sustainable business financing through collaboration with PASS and also integration of banks. An attractive package will be designed to facilitate farmers accessing credit for production.
It is noted farmers are risk averse and unwilling to experiment with new enterprises or crops they are not sure of. Farmers need security, not only from crop failure due to bad weather but also security of market for their outputs. As such the investment model integrate crop security for farmers. Crop security initiatives have been tried elsewhere and (Ethiopia and South Africa for instance). The project will draw from experiences from these countries.
A market linkage is vital for the success of the scheme. Sunflower can be grown two seasons in a year. This means farmers need to have a guaranteed market I as early as the first year of intervention. A market linkage will be guaranteed through initially farmer linkage to SME processors and later secondary linkage to large-scale processors for double refinery or sale of seeds.
The intervention plan is in cognisance of farmers’ side selling to traders who appear in harvest time when farmers have already been contracted and then offer better prices - which is a contributing factor to previous failures of market linkage programs intervention in Manyara region. An organic farmer linkage to large-scale processors will be preferred as opposed to intervention by way of contracting farmers. An organic linkage enables farmers to weigh benefits of open (free) market and chose which market offers better price. The investment program will however provide market and other relevant information necessary to facilitate farmer’s participation and reap gains from the market.
The investment program assimilates the Small Holder Farmers (SHF) and medium and large-scale farmers in clusters. It integrates and links the farmers’ cluster to a network of financial and BDS providers and processors through an arrangement, which is to be overseen by a market linkage facilitator. Service providers will provide market driven services. On the market side, small and large-scale processors will buy seeds for processing from the farmers through a competitive market price.
In the long run, large-scale processors can be incorporated to play the role of providing embedded services through supporting seed production and research to enable production and development of competent varieties for oil extraction. The investment program will also accommodate other new initiatives and concepts e.g. research and partnerships for bio oil production.
The investment program is not without benefits to the smallholder farmers and the rural active poor i.e. these are the program target beneficiaries. Positive impacts foreseen includes; access to affordable and reliable farm inputs- seeds, access to markets for affordable business development services and finances for the rural active poor, access to markets for the farm produce, and crop and income security for risk averse farmers; which in combination will lead to increases in incomes and poverty reduction at the grass root levels. In addition, the investment program is outward looking and in principle intends to instigate innovation towards new development thinking and initiatives which will stimulate development of new business concepts and products- e.g crop insurance, SME processor and farmer clusters.
b) Phasing of module implementationThe project interventions to develop the sub sector will start with building base/foundation for increasing production and productivity and then in later phases move towards commercialization of the subsector. 1st year interventions focuses on Setting up and Building Production base while at the same time
setting ground for a sound commercialization of the subsector. Activities thus include; Promotion of sunflower at regional and district forums, Farmer mobilization and training concurrently with seed production in farmer clusters.
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2nd Year intervention focuses on strengthening production base, Strengthening partnership among stake holders and directing subsector development towards commercialization, SME processing and contracting production.
3rd year activities should focus on increased commercialization and strengthening the contract farming
c) The model and linkage to the envisaged value chainIt should be noted that the sunflower subsector is still at initial stage of development. As such no value chain is existent. The first hurdle is to build a strong foundation of production upon which the sub sector and later value chain development will hinge. The model therefore provide a framework for developing the foundation of production and later a transition to value chain development. The module is not for value chain development, but rather a stepping-stone to transit the sub sector to a value chain in the near future.
Key aspects of the module to key functions in the value chain are linked as follows;i. Input supply (Seeds for planting)- Seed production will be through a community based approach
QDS (Quality Declared Seeds). This will enhance seed availability, which is a critical aspect of enhancing the production base.
ii. Production – Initially production will be based on the existing SHF approach. Towards the third phase (3rd year), production will be shifting towards commercial and medium scale production. Also Small Holder Farmers will be increasing acreages from the current average of 2 acres to an average of 3 to 4 acres.
iii. Processing- Both SME and large scale processing will be involved. In the first phase a strong participation of SME processor is foreseen. SME processors roles are expected to continue up to a point when large-scale processors can also be incorporated in the contract-farming model.
iv. Marketing- Market is a key aspect for the sustainability of the model. Markets stimulate production. As such a market linkage will match the increase in production.
v. Consumption - the underlying premise of the module is that quality sunflower oil for the local market will be produced. Also seed cake market will be linked to the growing dairy industry in the region.
vi. The model also provides for linkages to financial services and BDS necessary for sustainable development of the sub sector in the region.
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7.0 SUB SECTOR DEVELOPMENT INTERVENTIONS AND STRATEGIESThe subsector development interventions are a linkage and a means through which the perceived value chain will be achieved by way of implementing the proposed model. A comprehensive subsector development intervention and strategy is envisaged.
Sub sector development interventions include promotion of commercialisation of the enterprise, developing a comprehensive contract farming business model, making quality seeds readily available and affordable, ensuring that a viable financial services is available and affordable by a farmer and providing for farmer insurance against bad weather. Below is an elaboration of each of the strategies envisaged and critical activities necessary for each intervention.
7.1 Promotion of commercialization of the enterpriseFor the majority of sunflower farmers in Tanga region, the crop is being grown on basic subsistence level with accidental surplus left sold. Most households grow sunflower to extract oil for domestic consumption. There is therefore an urgent need to enhance commercialisation of the enterprise through both the farmer and regional institutional agendas. What the MUVI RBSS program need to do to commercialising the sub sector include:
i. Enhance farmer mobilisation and training in agronomic practices for sunflower. Farmers need to be mobilised and organised in clusters to enhance their ease of access of services.
ii. Ensure the potential of sunflower sub sector in enhancing rural development is made known to the regional government and a sunflower subsector development is integrated into regional development agenda and promoted
iii. Conduct a BDS market survey to identify missing link in demand and supply and critical services necessary for the development of the sub sector and also ascertain providers of these services. Also the initiative should go a step further to ensure the services are readily available and affordable by farmers.
iv. In the same initiative make available to private sector opportunities for investment in the sub sector in the region
v. Also enhance marketing and a market linkage for sunflower seeds
7.2 Development of a comprehensive contract farming business modelContract farming provides the best means of ensuring farmers have access to markets for their produce and in the same contract farmers are also guaranteed access to inputs and services for their produce. A tripartite contract-farming scheme is envisaged can works best for the program. The following activities need to be undertaken;
i. Assessment of critical services and their availability. Critical services envisaged under the program include crop insurance against bad weather, financial services, market linkage services and access to inputs. Demand and supply for these services need to be assessed and matched and suppliers of the services informed of business opportunities available.
ii. Attract private sector service providers to work in the sector. Private sector service suppliers will be made aware of the opportunities available for investment and business environment made favourable for them to invest.
iii. Develop contract-farming modalities. Tripartite contract farming arrangement is envisaged suitable for the development of the sub sector. Contract farming ensures market for farmer’s produce and at the same time enables farmers to access farm inputs. The contract farming model to be developed will include a modality for quality seed production, crop insurance, business finance and a market for farm produce.
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7.3 Making seeds readily available and affordable to farmersOne of the limitations of sunflower production in the region of Tanga is the lack of quality seeds. Making seeds available at an affordable price will go a long way to entice farmers to grow sunflower and in effect promote the commercialisation of the sub sector. The following will be done;
i. Initiate a community based seed multiplication approach to seed production (QDS) in the regionii. With the involvement of Tanzania Official Seed Certification Institute (TOSCI), a community-
based seed multiplication system Quality Declared Seeds (QDS) can be adopted to improve thequality of seed produced and sold by small-scale farmers, or groups of such farmers. Farmers can be trained on QDS, on sites where they will produce quality seeds for planting and sale and hence faster multiplication of quality seeds. Apart from TOSCI, the other main partner in this initiative would be SUA. SUA has got the experience and expertise of implementing community-based seed multiplication. Also the institution has implemented a similar initiative elsewhere in Iringa.
iii. Train farmers and extension personnel in seed production Using the QDS approach and in order to raise quality seeds, farmers, seed inspectors, extension personnel, will be trained on various issues Farmers will be facilitated to establish farmer-managed demonstration plots for sunflower grain production to show case recommended agronomic practice for optimum sunflower yield.
iv. Support seed certification at farmer level. Using QDS selected farmers will be certified to produce seeds for sale. Transaction costs for farmers to look for seeds are reduced and also it is a way of expressing the commitment to farmers that the responsible authorities are committed to promoting the crop.
v. Encourage private sector seed suppliers to supply seeds in the region. This will support the Community based seed production especially in the short run as there will be need to have alternatives to QDS.
7.4 Financial services availabilityAdditional intervention is targeting making financial services available and affordable to a sunflower farmer. Activities envisaged here include;
i. Identifying a financial service provider to provide services within the integrated framework of the contract-farming model.
ii. Designing a package through which farmers can access credit and later pay for it as a deduction from sale of their outputs.
7.5 Develop weather crop insurance model to be piloted in the sub sector. Crop insurance is not a new concept in agriculture sector development. It is also not a new concept in the national sphere although it implementation has remained largely minimal. The project will adopt and implement the concept through the comprehensive contract farming framework. Activities for the project include;
i. Developing the model further considering its application in the crop specific context ii. Testing the model and its applicationiii. Setting up a framework and structures for its application
Sunflower as a cash crop, can significantly contribute to increase household income and food security and thus raising the standard of living of rural people, if promotional activities are encouraged. It has a high potential for quick expansion to ensure an adequate supply of cooking oil. With increased production and installation of processing machines for oil pressing in various localities, jobs can be created and consequently contributing to reducing unemployment among youths. In general, sunflower has a potential of contributing to poverty reduction if rigorous promotional and farmer sensitization
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activities are put in place. Promotional campaigns for sunflower sub sector development should go hand in hand with making seeds available and trainings in best agronomy in order to yield best outcome. Community based seed multiplication system and private sector seed supply should be popularized to create the demand for seeds among farmers. In a later stage of sub sector development, thinking should tend towards integrating a farmer into a broader and rewarding market for their products. Specific leverage points for interventions are summarised in the table below
Table 16: Leverage points and interventionsProposed Interventions
Proposed Activities Partner
1. Promotion of commercialization of the enterprise
i. Enhance farmer mobilisation and training in agronomic practices for sunflower
ii. Lobby for sunflower sub sector development in the region
iii. Conduct a BDS market survey to identify missing link in demand and supply and critical services necessary for the development of the sub sector and also ascertain providers of these services.
iv. In the same initiative make available to private sector opportunities for investment in the sub sector in the region
v. Also enhance marketing and a market linkage for sunflower seeds
The regional government,LGAs, SIDO, TCCIA, MUVI Program, and other stakeholders
2. Development of a comprehensive contract farming business model
i. Assessment of critical services and their availability.
ii. Attract private sector service providers to work in the sector.
iii. Develop contract-farming modalities.
TOSCI, DSI, ASA, SIDO, MUVI ProgramLGAs, SUA, TOSCI, SIDO, MUVI Program
3. Making seeds readily available and affordable to farmers
i. Initiate a community based seed multiplication approach to seed production (QDS) in the region
ii. Train farmers and extension personnel in seed production
iii. Support seed certification at farmer level. iv. Encourage private sector seed suppliers to
supply seeds in the region.
SIDO, MVIWATA, PANTIL-SUA, RUDI, Micro-finance and commercial banks, PASS, TCCIA, BDS providers, MUVI Program,
4 Enhance availability of financial services
i. Identifying a financial service provider to provide services within the integrated framework of the contract-farming model.
ii. Designing a package through which farmers can access credit and later pay for it as a deduction from sale of their outputs.
MFIs , Banks, PASS, SACCOS, VICOBA, Communiy Savings and Investment Programs (COMSIPs), MUVI Program
5 Develop weather crop insurance model to be piloted in the sub sector
i. Undertake inventory of crop insurance models ii. Exposure to functioning weather crop insurance
schemeiii. Design weather crop insurance for the regioniv. Testing the model and its application
SIDO, Farmer organisations and MUVI Program,
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8.0 ANNEXES
8.1 Itinerary for the sunflower sub sector study
Date Destination/ Interviews held.20/04/ 2009 Interviews in Tanga city areas: DALDO Tanga, Outreach Manager CTI,
Regional statistics manager21/04/2009 Interviews in Tanga city areas and Muheza: Processors of edible oil in
Tanga, Muheza District staff (Statistician, DALDO, and Crop officer), Passionists Father Muheza
22/04/2009 Travel to Handeni23/04/2009 Meeting with Handeni District Staff and meeting with Farmers in Handeni:
DALDO Handeni, DSMS Agro mechanisation, KIKIWANI Group, 24/04/2009 Field work and further meetings with farmers in Handeni; Meeting with
Kwaluwala farmer group; Magamba ADP World Vision; Sunflower Processor in Handeni Town. Meeting with KILINDI District Agricultural Officer and PADEP Coordinator.
25/04/2009 Travel to Korogwe District27/04/2009 Meeting with District Staff in Korogwe and meeting with farmer groups:
District Crop Officer, Meeting with Mashewa Women Savings and Credit Society; meeting with farmers in Gombero
28/04/2009 Meeting with DALDO Korogwe; Travel to Tanga and meeting with Regional Agricultural Officer, Tanga
19/05/2009 Meeting with District extension staff and local leaders in Kabuku 21/05/2009 Meeting with DALDO Pangani
Meeting with TEMDOMeeting with CAMARTECMeeting with TCCIA and processors in Manyara
25/06/2009 Sunflower sub sector study validation workshop- Tanga29/06/2009 -3/07/2009
Intervention planning session in Dar es Salaam
06-30/07/2009 Preparation of draft report
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8.2 Key Contacts Annex 1: Sunflower sub sector study- List of people InterviewedDate Names Designation Contacts20/04/ 2009 Mr. Clement Shembilu DALDO Tanga Rural20/04/ 2009 Mussa S. K. Nkhangaa Tanga Outreach Manager,
Confederation of Tanzania Industries (CTI)
Cell: 0715294555email: [email protected]
20/04/ 2009 Mwanjota Tonny Regional Statistics Manager, Tanga Region
Cell: 0713755965
21/04/2009 William Mkande Processor/ Edible oil expellant, Tanga City
Cell: 0784 920682
21/04/2009 Sameer Gulam Son of Gulam and Manager, Munir Investments
Cell: 0786514121
21/04/2009 Asha Mbelwa District Statistician, Muheza District
Cell: 0713-659684
21/04/2009 Seif Shemhina Ag. DALDO, Muheza District
Cell: 0784420462
21/04/2009 Hoyange Marika District Crop Officer Cell: 0787 15793121/04/2009 Fr. Roberto Dal Corso Pasionists Father Muheza Cell: 0755 012139;
Email: [email protected]/04/2009 Hammarskjold E.
YonazaDistrict Agriculture and Livestock Officer
Cell: 0784845190Email: [email protected]
23/04/2009 Mr. Mwambuga DSMS Agro Mechanisation Cell: 0784 48676223/04/2009 Elisante Msuya Chairman KIKIWANI Cell: 0756 04600223/04/2009 Athumani Abdallah Bilali Treasurer KIKIWANI Cell: 0752 953064 23/04/2009 Sulemani Saidi Machine Operator,
KIKIWANIMisima
24/04/2009 Hassan Omari Johali Village Executive Officer Kwaluwala, Kangati Ward24/04/2009 Yusuf Ali Muhina Village Chairman
Kwaluwala Cell: 0717 317812
24/04/2009 Mr. Kimaro Ombeni Program Coordinator, Magamba ADP World Vision
Cell: O784 642785
24/04/2009 John Shayo Processor, Sunflower oil, Handeni Town
Cell: 0784 399800; 0782 982626
24/04/2009 Joseph James Ngoswe District Agricultural Officer and PADEP Coordinator
Cell: 0784 309810
27/04/2009 Veronica Mhina Mashewa Women Saving and Credit Society
Cell: 0718 173290
27/04/2009 Mary Mngoma Mashewa Women Saving and Credit Society
Mashewa
27/04/2009 Richard Petero Harawa Individual Farmer Gombero
27/04/2009 Makamla S. Mchomvu Head Teacher, Gombero Primary School
Cell: 0714 770729
28/04/2009 Mr. Mjema Mweta DALDO, Korogwe District Cell: 0786 213055
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Email: [email protected]
28/04/2009 Mr. Lameck Tungu Regional Agriculture Advisor, Tanga Region
Cell: 0784582726Email: [email protected]
8.3 Summary of national import and export of vegetable oil and products (BET, June 2009)
TANZANIA EXPORTS OF COOKING OILCIF
Value(TSHS.)Net
Weight(Kg) % Weight
2004 2350078963 3725047 100.00
GEOUNDNUT OIL AND FRACTIONS 31598 22 0.00
OTHER OILS AND THEIR FRACTIONS FROM OLIVES 40697944 35374 0.95
PALM OIL AND ITS FRACTIONS, REFINED OR NOT 1252372088 1399232 37.56
CRUDE PALM KERNEL 21475000 87850 2.36
COTTON SEED OIL 49431504 333278 8.95
OTHER FIXED VEGETABLE OIL, FATS AND FRACTIONS 538834286 1365147 36.65
ANIMAL FATS AND OILS 447236543 504144 13.53
2005 3146731064 4287417 100.00
SOYA-BEAN OIL AND ITS FRACTIONS 791020 1400 0.03
GROUND-NUT OIL AND ITS FRACTIONS 49111734 95330 2.22
OLIVE OIL AND ITS FRACTIONS 1158026 136 0.00
OTHER OILS 17972778 40174 0.94PALM OIL AND ITS FRACTIONS WHEATHER OR NOT REFINED NOT CHEMICALLY MODIFIED 542734908 615402 14.35
COTTON SEED OIL 475857842 1084476 25.29
COCONUT (COPRA), PALM KERNEL OR BABASSU OIL AND THEIR FRACTIONS 101103002 104800 2.44
OTHER FIXED VEGETABLE FATS AND OILS (INCL. JOJOBA OIL) AND FRACTIONS 1176413584 1486540 34.67
ANIMAL OR VEGETABLE FATS AND OILS AND FRACTIONS, HYDROGENATED, ETC 746406226 832974 19.43MARGARINE; EDIBLE PREPARATIONS OF ANIMAL OR VEGETABLE FATS OR OILS, NES 27924838 25205 0.59
BUTTER AND OTHER FATS AND OILS DERIVED FROM MILK 7257106 980 0.02
2006 1182945048 17936316 100.00
FATS OILS AND DERIVATIVES 333343 820 0.00
SOYABEAN OIL 20000 20 0.00
GROUNDNUT OIL 52197560 16580000 92.44
SUNFLOWER AND SAFLOWER SEED AND OIL 576522072 574675 3.20
COTTON SEED AND OIL 2393346 897 0.01
COCONUT 8250000 13900 0.08
CRUDE PALM KERNEL 157535000 450300 2.51
LINSEED, CORN AND TUNG OIL 6560000 11070 0.06
OTHER FIXED VEGETABLE FATS AND OILS 379133727 304634 1.70
2007 1848784360 1621167 100.00
SUNFLOWER AND SAFFLOWER SEED AND OIL 493598577 403860 24.91
COTTON SEED AND OIL 27563477 160 0.01
CRUDE COCONUT AND COCONUT OIL 13899900 34543 2.13
CRUDE PALM KERNEL 32475244 84700 5.22
CRUDE LINSEED AND LINSEED OIL 147908585 331775 20.47
CORN AND SESAME OIL 199388123 290816 17.94
OTHER FIXED VEGETABLE FATS 933950454 475313 29.32
2008 77870961254 42095356 100.00
FATS AND OILS AND THEIR FRACTIONS, OF FISH OR MARINE MAMMALS 39884818 172000 0.41
OLIVE OIL AND ITS FRACTIONS 115807564 48800 0.12
OTHER OILS 349748594 300000 0.71PALM OIL AND ITS FRACTIONS WHEATHER OR NOT REFINED NOT CHEMICALLY MODIFIED 27697310538 16294756 38.71
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SUNFLOWER-SEED, SAFFLOWER 15635273456 7112604 16.90
COTTON-SEED OIL AND THEIR FRACTIONS 2068630264 1206964 2.87
COCONUT (COPRA), PALM KERNEL OR BABASSU OIL AND THEIR FRACTIONS 85056066 297930 0.71
CRUDE PALM AND PALM OIL 1522158012 1111600 2.64
LINSEED AND CORN OIL 1519873772 756680 1.80
OTHER FIXED VEGETABLE FATS AND FRACTIONS 3017601124 1623340 3.86
ANIMAL OR VEGETABLE FATS AND OILS AND FRACTIONS, HYDROGENATED, ETC 24902444552 12720666 30.22MARGARINE; EDIBLE PREPARATIONS OF ANIMAL OR VEGETABLE FATS OR OILS,NES 910999410 443808 1.05
GLYCEROL, CRUDE, GLYCEROL WATERS AND LYES 6173084 6208 0.01
TANZANIA IMPORTS OF COOKING OILCIF
Value(TSHS.)Net
Weight(Kg) % Weight
2002 4,398,746,652 8,955,205 100.00
CRUDE SOYABEAN OIL AND FRACTIONS 1,924,429,801 4,790,015 53.49
CRUDE GROUNDNUT OIL AND FRACTIONS 2,051,153 933 0.01
VIRGIN OLIVE OIL AND FRACTIONS 44,421,722 48,399 0.54
OTHER OILS AND THEIR FRACTIONS 1,211,827 1,342 0.01
CRUDE PALM OIL 42,860,587 200,970 2.24
SUNFLOWER SEED AND SAFFLOWER OIL 141,552,544 250,013 2.79
CASTOR AND TUNG OIL 12,445,096 36,550 0.41
SESAME OIL AND FRACTIONS 759,763 2,416 0.03
MARGARINE, ANIMAL FATS AND OILS AND FRACTIONS 1,605,414,196 2,080,518 23.23
VEGETABLE FATS AND OILS AND THEIR FRACTIONS 596,882,932 1,529,631 17.08
PREPARATIONS OF POULTRY PRODUCTS 26,717,031 14,418 0.16
2003 22,826,132,124 49,703,742 100.00
SOYABEAN OIL AND FRACTIONS 694,674,576 997,144 2.01
GROUNDNUT OIL AND FRACTIONS 141,642 35 0.00
VIRGIN OLIVE OIL AND FRACTIONS 80,421,612 72,428 0.15
OTHER OILS AND THEIR FRACTIONS 16,280,190,312 40,873,649 82.23
CRUDE SUNFLOWER SEED AND SAFFLOWER OIL 1,466,196,257 2,380,325 4.79
CORN OIL AND FRACTIONS 232,653,441 303,374 0.61
CASTOR OIL AND FRACTIONS 4,035,666 2,123 0.00
SESAME OIL AND FRACTIONS 2,470,659 3,794 0.01
VEGETABLE FATS AND OILS AND THEIR FRACTIONS 828,970,202 1,509,910 3.04
MARGARINE 2,112,921,309 2,206,801 4.44
EDIBLE PREPARATION OF FATS AND OILS 1,123,456,448 1,354,159 2.72
2004 5,910,563,185 10,286,354 100.00
SUNFLOWER SEED AND SAFFLOWER OIL 796,038,440 1,088,356 10.58
COTTON SEED OIL AND FRACTIONS 1,013,805 1,100 0.01
CORN OIL AND FRACTIONS 56,311,426 97,539 0.95
CASTOR OIL AND ITS FRACTIONS 7,502,323 3,005 0.03
SESAME OIL AND FRACTIONS 1,682,178 3,428 0.03
OTHER FIXED VEGETABLE FATS AND FRACTIONS 1,400,204,024 5,111,916 49.70
ANIMAL FATS AND OILS AND FRACTIONS 32,653,163 24,669 0.24
VEGETABLE FATS AND OILS AND THEIR FRACTIONS 359,462,310 580,245 5.64
MARGARINE 2,388,486,987 2,320,304 22.56
EDIBLE PREPARATIONS OF FATS AND OILS 867,208,529 1,055,792 10.26
2005 256,569,452,241 571,732,907 100.00
ANIMAL FATS AND OILS 85,184,780 220,780 0.04
SOYABEAN OIL AND ITS FRACTIONS 3,062,978,538 3,764,685 0.66
GROUNDNUT OIL AND ITS FRACTIONS 492,789 648 0.00
OLIVEOIL AND ITS FRACTIONS 390,181,821 261,393 0.05
PALM OIL AND ITS FRACTIONS 237,756,727,264 550,356,832 96.26
SUNFLOWER-SEED, SAFFLOWER OIL AND THEIR FRACTIONS 357,054,657 600,337 0.11
49
COTTON SEED OIL 1,101,930 1,226 0.00
SESAME OIL AND FRACTIONS 82,942,080 387,390 0.07
ANIMAL FATS AND OILS AND FRACTIONS 554,318,414 682,290 0.12
VEGETABLE FATS AND OILS AND THEIR FRACTIONS 5,363,590,978 6,564,400 1.15
MARGARINE, EDIBLE PREPARATIONS OF ANIMAL OR VEGETABLE FATS AND OILS 8,702,075,218 8,461,788 1.48
EDIBLE PREPARATIONS OF FATS AND OILS 212,803,772 431,138 0.08
2006 268,909,317,079 443,246,756 100.00
FATS AND OILS AND THEIR FRACTIONS, OF FISH OR MARINE MAMMALS 9,420,284 1,532 0.00
SOYA-BEAN OIL AND ITS FRACTIONS 959,147,673 1,013,502 0.23
OLIVE OIL AND ITS FRACTIONS 229,357,225 171,810 0.04
OTHER OILS 1,750,290 5,223 0.00PALM OIL AND ITS FRACTIONS WHEATHER OR NOT REFINED NOT CHEMICALLY MODIFIED 259,434,298,214 431,528,521 97.36
SUNFLOWER-SEED, SAFFLOWER OR COTTON-SEED OIL AND THEIR FRACTIONS 5,750,155,960 6,838,514 1.54
COCONUT (COPRA), PALM KERNEL OR BABASSU OIL AND THEIR FRACTIONS 2,128,987,664 2,862,987 0.65
RAPE, COLZA OR MUSTARD OIL AND THEIR FRACTIONS 4,046,277 6,973 0.00
LINSEED OIL/ REFINED OR NOT REFINED 244,883,414 683,572 0.15
CORN OIL AND FRACTIONS 123,809,083 79,605 0.02
CASTOR AND TUNG OIL 15,881,037 20,268 0.00
SESAME OIL AND FRACTIONS 7,579,958 34,249 0.01
2007 607,553,560,522 690,476,136 100.00
FISH LIVER OIL AND OTHER FRACTIONS 19,905,220 3,300 0.00
CRUDE SOYA BEAN OIL 39,308,511,010 34,604,480 5.01
GROUND NUT OIL 419,068 3,388 0.00
OLIVE OIL AND FRACTIONS 576,247,424 645,918 0.09
OTHER OILS AND THEIR FRACTIONS 5,748,516,536 6,000,536 0.87
PALM OIL 554,534,384,004 640,452,638 92.76
SUNFLOWER SEED AND SAFFLOWER OIL 3,363,443,926 3,571,250 0.52
COTTON SEED OIL AND FRACTIONS 42,646,682 89,150 0.01
COCONUT OIL AND FRACTIONS 2,821,343,260 2,585,238 0.37
PALM OIL AND FRACTIONS 1,393,242 2,400 0.00
RAPESEED OIL AND FRACTIONS 7,450,218 10,644 0.00
LINSEEDD OIL AND FRACTIONS 421,454,178 1,398,138 0.20
CORN OIL AND FRACTIONS 692,766,216 1,070,256 0.16
CASTOR OIL AND FRACTIONS 1,047,980 166 0.00
SESAME OIL AND FRACTIONS 14,031,558 38,634 0.01
2008 694,023,772,020 605,923,894 100.00
FATS AND OILS DERIVED FROM MILK 64,764,628 103,760 0.02
FISH LIVER OIL AND THEIR FRACTIONS 13,117,174 1,344 0.00
OTHER ANIMAL FATS AND THEIR FRACTIONS 31,578 15 0.00
SOYABEAN OIL AND ITS FRACTIONS 55,883,742,474 36,290,691 5.99
GROUNDNUT OIL AND ITS FRACTIONS 1,251,552 13,320 0.00
OLIVE OIL AND ITS FRACTIONS 667,872,255 256,758 0.04PALM OIL AND ITS FRACTIONS WHEATHER OR NOT REFINED NOT CHEMICALLY MODIFIED 305,004,381,045 278,335,285 45.94
SUNFLOWER-SEED, SAFFLOWER OR COTTON-SEED OIL AND THEIR FRACTIONS 1,273,502,130 906,358 0.15
COTTON SEED OIL AND FRACTIONS 103,028,874 142,658 0.02
COCONUT (COPRA), PALM KERNEL OR BABASSU OIL AND THEIR FRACTIONS 1,473,218,538 1,084,501 0.18
CRUDE PALM KERNEL 2,095,315,806 1,612,076 0.27
RAPE, COLZA OR MUSTARD OIL AND THEIR FRACTIONS 10,284,600 10,983 0.00
CRUDE LINSEED, LINSEED OIL AND FRACTIONS 82,857,564 187,746 0.03
CORN OIL AND FRACTIONS 37,619,210 81,928 0.01
CASTOR OIL AND FRACTIONS 1,557,998 712 0.00
SESAME OIL AND FRACTIONS 24,001,382 20,556 0.00
OTHER FIXED VEGETABLE FATS AND FRACTIONS 3,493,233,418 12,524,604 2.07
ANIMAL OR VEGETABLE FATS AND OILS AND FRACTIONS, HYDROGENATED, ETC 4,413,570,411 6,093,741 1.01
50
MARGARINE; EDIBLE PREPARATIONS OF ANIMAL OR VEGETABLE FATS OR OILS, NES 5,994,187,185 3,475,122 0.57
