DESK REVIEW: GROUNDNUTS VALUE CHAIN ANALYSISFOR ZAMBIABy the Agricultural Consultative ForumP/Bag 16, WoodlandsLUSAKA
Outline of Presentation1.Introduction2.Groundnuts production and marketing3. Value chain players4. Challenges and opportunities5. Current research6. Key findings7. Recommendations
Introduction• Desk review undertaken to understand the mainchallenges facing the groundnut value chain• Existing data from the Ministry of Agriculture andLivestock and past value chain reports ongroundnuts as well as a draft Groundnuts andCommon Beans Intervention Plan by theSmallholder Agribusiness Promotion Programme(SAPP).• Limitations: Investigations were only centred inLusaka and to a few organisations due to limitedresources and time.• No visitations were made to the productiveregions for groundnuts in the country.
1. Groundnut Production andMarketing1.1 Producing Areas1.2 Number of Small and Medium Scale FarmersProducing1.3 Trends in Area Planted, Production and Yields1.4 Groundnuts Marketing1.5 Gender Roles in Groundnut Production and Marketing.
Producing AreasArea Planted Production Mt Yield MtZambia 184,397 113,026 0.6Central Province 19,234 12,106 0.6Copperbelt Province 8,735 5,427 0.6Eastern Province 56,946 30,930 0.5Luapula Province 17,599 14,133 0.8Lusaka Province 2,487 1,152 0.5Muchinga Province 14,163 10,817 0.8Northern Province 29,025 16,211 0.6N/Western Province 7,814 10,337 1.3Southern Province 23,089 9,616 0.4Western Province 5,305 2,298 0.4
Production by Province during 2012 SeasonArea Planted to Groundnuts 2012Production in Metric Tonnes by Province 2012
Number of Small and Medium Scale FarmersProducing• Second mostly grown crop in Zambia afterMaize• 37% of the small and medium scale farminghouseholds grew groundnuts in 2011/12,• 44% in 2010/11, 49% in the 2009/10 and 44%households in 2008/09.• The majority of these smallholder farmers arefound in Eastern, Northern, Luapula andMuchinga Provinces
Trends in Area Planted, Production and Yields• Zambia is experiencing increasing groundnutsproduction since 2007.• Available statistics indicate a three-fold increase ingroundnut production from 2007 to 2010 from 55,215to 163,733 MT and a massive 70% increase from 2010to 2011.• This can be attributed to a combination of increasedhectares planted (from 147,320 ha in 2007, to 267,567ha in 2010 and 448,243 ha in 2011) and• Increased production per hectare (from 375 kg/ha in2007, to 612 kg/ha in 2010 and 622 kg/ha in 2011).• However, in 2012 production fell by 60% from278,775MT to 113,026MT.
Groundnuts Yields• Zambia’s groundnut yields have varied from between0.3 and 0.6 MT/ha.• These variations in groundnut yields are typicallyrelated to:- changes in soil fertility,- farming systems/practices,- seed varieties planted and- pest attacks.- Hectarage planted appears to be largely influenced bythe availability of markets, by prices in the previousseason, and by markets and prices of competing crops.
Groundnuts Marketinga) National Markets- Majority of groundnuts sold in the countrypass through informal market channels- Major players in this group include thesmallholder farmers, the brief case traders;the village based micro processors and theinformal cross-border traders.- Eastern and Northern Provinces have overthe past years been the most importantprovinces of Zambia in terms of quantities ofgroundnuts sold
Groundnuts Marketing cont.b) Export Markets• Zambia was once an exporter of groundnuts to Europe.• Between 1960 and 1970 the Eastern ProvinceCooperative Marketing Union (EPCMU) exported over8,000 Mt of groundnuts to the UK.• However, concerns over aflatoxins and low qualitystandards (size and shape of nut) led to the collapse ofthis market.• Since 2000 Zambia has oscillated between being a netimporter and net exporter of groundnuts.• However, trade volumes for groundnuts haveremained low, not exceeding 2,000 MT for imports orexports in a given year.
Groundnuts Sales in Zambia, Metric Tonnes 1987 – 2012
Gender Roles in GroundnutProduction and Marketing.• It is a general belief in Zambia that groundnut is awoman’s crop.• Female headed households are actively involved ingroundnut production, with 24% of all female headedhouseholds growing groundnuts.• In male headed households groundnuts are oftengendered as a female crop.• Women are primarily responsible for the planting,weeding, and harvesting of groundnuts. In terms ofmarketing, women tend to dominate the small-scaleinformal groundnut trade in rural and urban markets.
Value chain playersa) Seed companies• - Zambia has a number of seed companies (ZAMSEED,MRI, SEEDCO, MONSANTO, PANNAR Seed, etc whosupply seed to smallholder farmers.• Most of these companies are located along the line ofrail making their outreach to the majority of theproducers limited.• These companies prefer to trade in maize seed whichhas a big market from the government subsidyprogramme.• These companies have invested very little ingroundnuts seed production because the business isnot profitable.
Value chain playersb) Traders• Traders provide a market to farmers and act assuppliers to food processors and exporters.• They are sometimes referred to as brief casetraders but they play a vital link betweenproducers and processors.• The interest of this group is to make quick moneybefore the smallholder farmers take theirgroundnut to big markets.• However the biggest challenge is that most ofthese traders operate along the line of rail witheasy access and good road infrastructurenetwork leaving out the outlying areas.
Value chain playersc) Smallholder farmers- Smallholder farmers form the biggest andmost important group of stakeholders in thegroundnut value chain.- Smallholder farmers either operate in groupsor individuals.- This group has very limited seed multiplicationcapacity and is reluctant to invest in basicseed, hence their continued use of recycledseed.
Value chain playersd) Food Processors• This group provides peanut butter, roasted nuts, and oilintermediaries who interface with the end users who arethe consumers.• A number of big companies and organizations belong tothis group of players. The majority of them have thecapacity to buy the groundnuts from the traders, add valueand export or sale within the country.• However, Zambia’s groundnuts processing industry isfragmented, has inadequate capacity or access to finance.• There are no international recognised groundnutsprocessors in the country.• This group is mainly concerned with aflatoxin.
Value chain playerse) Supermarkets, Food Service Suppliers,Restaurants, hotels, canteens and bars• These provide a major market forintermediaries and farmers, as they servicethe needs of the consumers.
Value chain playersf) Exporters/importers• These are those business entities that export andimport the commodity and its finished products.• Currently Zambia has inadequate capacity to be aplayer in the main export markets.• Limited informal trade has been recordedthrough Chipata into Malawi and Mozambique.• In addition, limited trade has also been madeinto South Africa.
Value chain playersg) Consumers• Consumers are the end users of the following endmarket products are: fresh unshelled nuts in bulk, dryunshelled nuts in bulk, shelled nuts in bulk, packagedunshelled nuts, and processed shelled nuts withflavourings, peanut butter, oil and cake.• Consumers normally are interested in high qualitycheap products.• Currently, most Zambian consumers are not aware ofthe potential health risks associated with theconsumption of aflatoxin infected groundnuts.
Value chain playersh) Service providers• These comprise of a range of institutions such as seedresearch institutions, seed multiplication out-growers,seed companies, input suppliers and non-state actors.• Their interest is mainly in improving both productionand productivity through research and extension work.• Service providers especially from governmentdepartments have been failing to fulfil the mandate inpromoting groundnuts mainly due to human andfinancial challenges.
Key Challenges• Low productivity and poor quality product• Control of aflotoxin• Limited availability of certified seed• Volatile exchange rate movements
Opportunities• Favourable climate and good soils which areideal for growing groundnuts.• High demand for groundnuts both internallyand on the export market.Taking advantage of this market can have asubstantial impact on the economy of small-scale farmers involved, especially women.
Current ResearchOrganisation Type of Support engaged in LocationMsekera Research Institute Variety research and support to seed certification Eastern ProvinceMisamfu Research Institute Variety research and support to seed certification Northern ProvinceZambia Agriculture Research Institute Agricultural research and aflatoxin issues NationwideSeed Control and Certification Institute Seed certification and control NationwideSeed companies Possible seed multiplication and distribution Eastern and Northern ProvincesProfit + Farmer training, household food security, marketaccess and Aflatoxin controlEastern ProvinceFarmer Input Support Programme (FISP) FISP has been extended to cover groundnuts.This will create a major pull for private sectorinvestments in inputs, processing and marketingNationwideDunavant Groundnuts input supply and marketing. Possibleout-grower developmentEastern ProvinceCotton Association of Zambia (CAZ) Farmer mobilisation into growing of groundnutsMUSIKA Support to out-grower development in groundnuts Eastern ProvinceZambia National Farmers Union Support to the development of oilseed commodityassociation which includes groundnutsNationwideIndaba Agriculture Policy Research Institute(IAPRI)Commodity research and policy development andalso support to commodity associationNationwideWorld Vision Seed distribution to small scale farmers Eastern Province
Key Findings• Groundnut production and area planted to groundnutshave increased considerably since 2007,• Yields have remained low,• Exports declined significantly mainly because of aflatoxinand changes in consumer tastes,• Lack of an organised commodity association• Limited investment in improving yields and productquality through extension services, seed breeding andmultiplication, labour-saving technology transfer andaflatoxin control mechanisms.• Insufficient confidence in the private sector to invest inoutgrower schemes for groundnuts in the country.• Absence of a legal framework for agricultural marketing
Recommendations• Government should put in place a deliberateprogramme for seed breeding and multiplication andsensitise smallholder farmers on the benefits of usingcertified seeds.• Government should facilitate the development of astrong agro-processing industry to improve theprospects of the groundnut subsector which has thepotential of creating strong backward and forwardlinkages in Zambia’s economy.• More research in the areas of technology development,transfer and adoption, value addition, post harvesthandling, and farmers institutional strengthening andchange management.
Recommendations cont.• Since weed control is critical throughout and extremelylabour intensive in the later stages of groundnutsproduction, it may be worthwhile investigatingappropriate herbicides for weed control.• For Zambians to remain competitive there is need tobetter understand farmer and market preferences and toensure that the groundnut breeding programme developsand delivers suitable varieties and sufficient quantities ofbreeder seed to satisfy these preferences. There istherefore need for traders and processors to work closelywith the breeders such as ZARI to communicate marketrequirements, and these breeders need secured fundingto maintain a long term, sustainable breeding programme.
Recommendations cont.• In order to improve the quality of groundnuts for thelocal and export market, there is need to ensure thataflatoxin levels are measured and if necessary addressedthrough improved knowledge transfer.• Given that one of the most labour intensive aspects ofgroundnut production is the stripping of the pods fromthe plants, it is proposed that the potential forintroducing pod strippers to farmers be investigated.• In order to address the competitiveness of the industry,government should look into the issues of the high costof finance and enact the draft legal framework foragricultural marketing in the country.• There is need for government to encourage out-growerschemes for groundnuts in the country. This may addresssome of the marketing challenges being faced in thegroundnuts industry.