Session 6.2 The Economics of drying Cassava chips for use of Cassava as a filler crop in multi-feed plants by Westby NRI
The economics of drying cassava chips for use of cassava as a filler crop in multi-feed plants Andrew Westby
Topics Issues in cassava drying to produce a feedstock for bio-ethanol production Economics of cassava drying in Africa Lessons from implementing a cassava value chain project based on cassava African perspective using data from the Cassava: Adding Value for Africa project.
Why cassava chips as a feedstock? Cassava is 70% water, dried chips are more efficient in terms of transport costs; Sun-drying is less expensive than drying with fossil fuels, lower CO2 footprint Dried chips can be stored, more flexible utilisation
Quality issues for production of bioethanol Food safety requirements; Quality issues; Peeling; Economics (based on C:AVA project)
Food safety issues Cyanogenic compounds Greater cellular damage, greater loss of cyangogens. For human consumption (HQCF) use grating Probably not an issue for bioethanol – use chipping Microbiological food safety For human food – raised platforms For bioethanol – concrete drying floors
Quality issues for chips Avoid spoilage during drying – loss of carbohydrate Impact of physiological deterioration before drying on fermentation qualities of cassava chips unknown. Properly dried chips (<14% moisture content) should store for > one year as long as kept dry and insects controlled. Has been report of 5% loss in starch extraction after 8 months at 30°C (DOI: 10.1002/star.200300247) No information on storage of sugary cassava
To peel or not? Economically labour peeling represents 10% of cost of producing dried cassava. Physical losses. Sauer et al. of IITA in Congo with 4 varieties of cassava. Tops and tips 4-14% Peeling 15-19% Major benefit of not peeling is in terms of reduced losses (if physical losses =20% then saving = 25+%) Unpeeled product differentiates it from chips/flour for human consumption
Value chain development for cassava Food/non-food processing industry using HQCF Village Processing Units Bakeries – replacing wheat with HQCF Farmers/Farmer Processors Grow cassava and sell semi-processed product to intermediary Intermediaries (private sector) Semi-processed product HQCF Roots Grated roots Value chain Benefits Rural areas - Increased farmer incomes - Employment Intermediaries - Business opportunity - Employment End-users: - Increased profitability - Lower consumer prices Nationally - Reduced imports Main inputs Business development services - Financial services - Technical support in processing - Ensure quality Technical support in adopting HQCF -Financial services Support farmer organisations - Increase cassava productivity - Support Village Processing Units - Ensure quality Service providers capacity strengthening
Value chain development for cassava Production costs and margins - Sun drying versus flash drying Sun drying Flash drying Nigeria Ghana Nigeria Ghana Production costs wet mash ($/t FCR) 68 53 68 53 Sun-drying ($/t FCR) Labour costs Other variable costs Total variable costs Capital costs 4 2 75 15 4 2 60 15 Flash-drying ($/t FCR) Profit on wet mash Labour costs Fuel costs Other variable costs Total variable costs Capital costs 16 7 23 52 145 12 16 3 23 34 124 13
Options for producing cassava feedstock for ethanol conversion ROOTS Peel Grate Sun dry and mill HQCF SCENARIO 1 Flash dry and mill HQCF ROOTS (Peel) Grate/mill Conversion to Ethanol Sun dry and mill SCENARIO 2 Taking knowledge on key costs and modelling to ethanol scenario
Value chain development for ethanol FCR = fresh cassava roots Country Nigeria Ghana Tanzania Uganda Malawi Yield (t/ha) 15 18 12 10 15 Production costs ($ per t FCR) 26.0 26.0 28.0 27.1 17.6 Farm gate cassava (($ / t FCR) 50.0 35.0 33.3 51.3 45.0 Farmers margin ($ / t FCR) 24.0 9.0 5.3 24.2 27.4 labour cost for peeling ($ / t FCR) 6.7 7.4 22.0 6.9 4.2 Cost of chipping (50% cost of grating) ($ / t FCR) 5.9 5.5 3.8 2.5 2.5 Labour costs sun drying ($ / t wet product ) 8.00 7.14 4.40 2.06 2.00 Other costs sun drying ($ / t wet product ) 4 4 3 3 3
Projected costs of cassava chips without farmers margin
Projected costs of cassava chips with farmers margin
Observations Does not include transport/capital depreciation costs In terms of production costs in $ terms the production costs for cassava were similar across 5 countries, lowest in Malawi In terms of farmers margins - great differences, highest in Nigeria, Uganda and Malawi (reflection of shortages in some countries at the time of collecting the data 2009/2010) Production costs/farmers margin are a very high % of total costs. Improvements in productivity are likely to have a major impact on profitability and competiveness Not peeling makes a >30% saving in cost of production - assuming a 20% peeling loss. Major issue will be competiveness of cassava against other feed stocks
Alternative uses of cassava There are alternative uses of cassava Fresh cassava (good prices near urban areas) Traditonal processed products (good returns, with added value at household/village level) New/commercial uses (HQCF, glucose, starch, livestock feed etc) Cassava for biofuel will have to compete with these uses – it will depend on the price that biofuel companies are willing to pay against other competive feed stocks.
Alternative uses of cassava Source: Jonathan Anaglo, PhD Thesis, University of Greenwich
Competitiveness of cassava chips Key issue is the ability of cassava to compete as feedstock for bioethanol. Just for comparion cassava chip export price to China from Thailand is of the region of USD 168/per tonne in November 2009 (Food Outlook). Price of kokonte (dried cassava chips from peeled cassava) sold for plywood glue extender use ($300/t) Africa will find it hard to compete internationally. Main markets likely to be local. If potential market is large then will need continues efforts to improve cassava productivity
Some value chain lessons from C:AVA (HQCF) - Selection of appropriate, cost effective technology to specific situations. Use of specific strategies to benefit women e.g. Working with women’s groups, training service providers, is proving beneficial. Awareness of needs of poorest in terms of access to resources (e.g. access to transport) and improved varieties and agronomic support. Often not a one model fits all solution. More processing done at small-holder level, the greater the financial returns to them. Profitability of HQCF is location specific
Some value chain lessons from C:AVA - Selection of appropriate, cost effective technology to specific situations. Use of specific strategies to benefit women e.g. Working with women’s groups, training service providers, is proving beneficial. Awareness of needs of poorest in terms of access to resources (e.g. access to transport) and improved varieties and agronomic support. Often not a one model fits all solution. More processing done at small-holder level, the greater the financial returns to them. Profitability of HQCF is location specific
Success factors for small-holder inclusion in markets Farmers who are trained, organized, and empowered to deliver the quantity and quality of produce required in a consistent and cost-efficient way; A receptive business sector; A public sector with a conducive business environment including infrastructure, contract enforcement mechanisms and financial intermediation; and Partnership facilitation which can be done by a third party (e.g. NGO) or a value chain champion. Peppelenbos (2008)
Conclusions Sun-drying best option Location with/near farmers saves transport costs and any potential problems with physiological deterioration. Use of unpeeled cassava, saves labour, reduced losses, differentiates product in market, if acceptable. Systems based on chipping and drying involve low capital investment and provide additional small-holder incomes than just selling roots. Concern about competition with other feedstocks Concern about competition for cassava for other end users, especially where biofuel use in lower end of value spectrum. Issues surrounding how to maximise benefits for small-holder farmers/processors worth careful investigation.
Value chain development for cassava THANK YOU Project team Andrew Westby, Kolawole Adebayo, L ouise Abayomi, Adebayo Abass, Francis Alacho, Victor Antwi, Aurelie Bechoff, Nanam Dziedzoave, Lora Forsythe, Richard Gibson, Andrew Graffham, Paul Ilona, Vincent Kaitano, Michael Kirya, Ulrich Kleih, Richard Lamboll, Grace Mahende, Adrienne Martin, Shija Msikula, Gideon Onumah, Helena Posthumus, Vito Sandifolo, Lateef Sanni, Andrew Sergeant, Bernard Siwoku; John Orchard; Patricia Harvey