3. TABLE OF
CONTENT
Introduction 4
Smallholder sisal business model 4
Why Kishapu? 5
Why sisal? 5
The process 6
Community organization and group formation 7
Sisal leaf production, intercropping and nurseries 8
Local supply and market demand 9
Overall value chain upgrading 9
Lessons from rope making groups 10
Lesson from price fluctuations 10
Effects on the overall chain and market overview 11
Reflections and the way forward 12
4. Sisal, scientific name (Agave
sisalana) is a plant that yields
a stiff fibre traditionally used in
making rope and it grows in areas
with very little rainfall. The term
sisal refers either to the plant or
the fibre, depending on context.
Fibre is extracted by a process
known as decortication, where
leaves are crushed and beaten
by a rotating wheel set with blunt
knives, so that only fibres remain,
thereater water is used to wash
away the waste parts of the leaf.
The fibre is then dried, brushed
and baled ready for export. Three
years after planting a farmer
can start harvesting the mature
Introduction
leaves. Harvesting, if done well,
can be done for over fifteen
years. Harvesting the leaves
can be done whenever there is
demand for the product and a
need for money. Besides leaves,
the plant also produces a pole
(with flowers which develop
into bulbils) that is used in
construction of roofs. In short
sisal is a low input, climate
(change) ready risk reducing and
flexible crop that can generate
income whenever the farmer
needs it most. In Tanzania, sisal is
usually grown along the coast in
large plantations.
5. Oxfam in Tanzania works in
Shinyanga region, in the Western
part of the country. Shinyanga
Region includes the drought prone
Kishapu District, where sisal is
traditionally used as natural hedge
to demarcate farm plots, and
at the same protect them from
grazing livestock. Some farmers
would use the leaves to make
ropes for home use or to sell on
the local market. A few processors
with stripping machines, also
called raspadoras, are present
in the area but they had few
buyers who were also buying too
little. Besides the limited supply,
the large distance to the large
processing industry at the coast
and the inferior roads further
restricted the trade. Even with the
demand for sisal fibre increasing,
the constraints for starting trade
were still too large.
In 2009 Oxfam together with Katani
Ltd., a large sisal processor from
Tanga started a project to organize
local supply of fibre. Different local
entrepreneurs were helped with
money from Oxfam
and technology and training from
Katani Ltd. to produce large enough
quantities to enable trade with the
factories in the traditional sisal
processing industry close to Tanga.
Katani pledged to buy all fibres
supplied at world market prices.
Farmers were organised to enable
the transfer or the required
technology and information. They
would initially generate income
by harvesting the leaves of their
existing hedge sisal plants before
the newly planted sisal would
mature. They were trained in
sisal agronomy, nurseries were
established, and improved seedlings
Smallholder
sisal business model
were supplied. A brushing machine
was supplied to a local entrepreneur
to upgrade the raw fibre supplied by
the raspadoras, and women groups
were trained to make ropes with a
new hand rope maker.
This business model for linking
smallholder producers with
commercial companies focused
on the underutilised production
capacity of sisal in Kishapu. The
project has forged a connection
between a large sisal fibre processor
‘Katani Ltd.’ on one side and the
farmers of Kishapu district, on the
other. The large underutilised
source of hedge sisal in Kishapu,
enabled rapid start-up of the project
in an area where due to climatic
constraints the opportunities for
other agricultural development are
limited.
6. More than half of the people in
Tanzania live below the poverty
level, with Kishapu district being
among the poorest areas of the
country. Among the most important
reasons for this poverty are harsh
weather conditions (less than 700
mm average annual rainfall) and
increased variability of weather
due to climate change. These
unfavourable weather conditions
often result in crop failure and
food shortage. Furthermore, due to
lack of investments by government
and private sector, markets for
agricultural produce or value
addition are scarce. This lack of
investment also results in weak
industries and few enterprises
that potentially could bring an
income generating opportunity
other than agriculture in the rural
areas. Lack of investment by the
government in essential services
such as education, coupled with a
traditional emphasis on education
of boys rather than girls, results
in high illiteracy rates of women,
and absence of women in market
systems and other profitable
niches in agricultural value chains.
Why Kishapu
district?
Why sisal?
Sisal has traditionally been grown
along hedges in Kishapu to
demarcate farm boundaries, and
to produce fibre ropes during lean
times to supplement incomes. It
is one of the only crops that thrive
under the climatic conditions of
Kishapu, being a drought resistant
perennial crop that requires
virtually no external inputs after
planting. In addition, the leaves
used for fibre production can be
harvested throughout the year
and for roughly a ten-year period,
without killing the plant itself. This
trait allows farmers to harvest
whenever the need for additional
income is highest. It a product that
is harvested, sold and processed
by both women and men. The
above qualities would make sisal
the perfect crop to produce for
the farmers of Kishapu, was it not
that there was virtually no market.
Before the project commenced the
opportunities of actually selling
the sisal leaves were very slim.
Sporadically traders would come
and buy processed fibres from the
few processors, but demand and
prices were unreliable.
7. Initially the bottleneck in the value
chain was the conversion of leaves
into fibre. So, in the early stages of
the project establishing sufficient
processing capacity locally was the
main activity. To achieve this, so
called, “raspadora machines” were
provided to entrepreneurs in Kishapu.
Raspadoras decorticate the sisal
leaves, separating the soft fleshy leaf
tissue from the tough fibres. After sun
drying the fibres they can be stored
indefinitely without jeopardising
loss of quality. However, assessing
the quality of fibres is only possible
after the removal of impurities by
another process, namely “brushing”.
Officially only after brushing and
quality assessment of the fibres their
price can be set. At the start of the
project, Oxfam and Katani agreed to
do the brushing of fibres in Tanga.
Oxfam, together with its partners,
selected 15 local entrepreneurs that
would be given a raspadora on loan
basis. For the first phase, at the end
of 2010, the five best entrepreneurs
were selected to receive a raspadora.
After signing contracts with Katani, the
first five entrepreneurs received the
raspadoras, worth six million Tanzania
shillings . Also a working capital, of
two million Tanzania shillings was
provided. The contract stated that all
fibre would be transported to Tanga by
the processors and after determining
the quality, the profit would be
transferred to their bank account.
In February 2011, all five processors
started operations.
Parallel to the upgrading of processing
capacity, farmers were encouraged to
join groups to create a stronger supply
The Process
base of leaves. Group formation would
enable a more rapid dissemination
of knowledge and technology and
would enhance access to financial
services. The groups were trained
on understanding group dynamics,
management and savings and lending
structures, group management and
business skills. Some groups also
received training on sisal production.
Groups of farmers and some individual
farmers were trained on seedling
production. This included bulbils
collection, nursery establishment,
planting of seedlings and
bookkeeping. Four women groups
were trained to produce ropes with
low-tech rope making machines. In
2012, they received a rope-making
machine from Oxfam on a half loan,
half grant basis. Because of the lack
of brushing capacity in Kishapu, a
decision was made to support a local
women entrepreneur to get involved in
brushing of fibres to enable local price
determination. She received business
and technical training on how to
operate the brushing machine and
wrote a business plan. The machine
was delivered to her on loan basis and
she financed part of the business with
her own money.
The last goal of the project was to
create more activities that would add
value for women in Kishapu. Therefore
an opportunity for four women
groups to take up rope making as a
commercial activity was created. All
four groups were given training on rope
making and bookkeeping. Finally, a
manual rope-making machine on half
grant, half loan basis was provided.
8. Farmers in Kishapu processing sisal using locally made raspadora machine. Photo: Courtesy of Oxfam
Directly after initiation of the
project, group formation was
encouraged by explaining farmers
the benefits of organising
themselves in groups for this
project. Since farmers in Kishapu
already had a long history of
working in groups and thus were
familiar with the benefits, many
of them were willing to join new
groups or incorporated existing
groups into the project. In other
projects in neighbouring Districts,
Oxfam had good experience with
organising farmers in ‘SILC’ groups:
Saving and Internal Lending
Communities. It was decided that
Community organization and
group formation
the SILC approach would be an
easy way to mobilise and engage
farmers in the sisal project, and
motivate farmers to continue their
group work on (bi) weekly basis.
Farmers from Igaga B group processing sisal at their
local plant in Kihanda in Kishapu.
Photo: Courtesy of Ralph Roothaert
9. In 2012, still sufficient sisal was
available, although the first signs
of leaf shortages were observed.
To increase the supply of sisal
leaves, farmers were encouraged
to plant sisal as a cash crop
(initially intercropped with another
annual crop such as green gram) at
the start of the project. However,
since sisal requires three years
to mature before the first (small)
harvest, newly planted sisal is not
productive yet and therefore its
effect on the supply base cannot
be measured yet. In addition, the
strategy was less successful than
expected. This was largely due to
severe drought over the past three
years, which negatively affected
seedling survival. Nevertheless,
the interest of farmers for sisal
production was not the problem.
In 2010, in total 34 sisal nurseries
had been established (on 10.8
Acres by 178 trained farmers (47%
female). On 8 acres intercropping
was attempted, but due to drought
all crops died, including some of
the sisal.
By April 2013, 60 nurseries were
established, about half of them
being operated by groups and
the other half by individuals. The
seedlings from these nurseries
were transplanted to 210 different
farms , mostly individual farms
and some group farms. Group sisal
farms tend to be a bit bigger, about
1 acre, while the individual sisal
plots are half an acre on average.
Sisal leaf production,
intercropping and nurseries
Farmers in Kishapu at a nursery learning more on sisal growing. Photo: Courtesy of Ralph Roothaert
1
A nursery of 1 acre has about 32,000 plants. Most nurseries are about 0.5 acre in size.
2
A sisal farm needs about 1600 plants per acre in a system of double sisal rows with an intercropping
space of 3.5 m between rows.
10. Before the start of the project, there
was only limited trade in sisal fibre in
the Kishapu area. Katani Ltd. had not
bought fibre from the area for years. In
September 2010, 15 processors were
trained (14 man, one woman). Later on
an additional five woman got training.
In December 2010 five processors
(most experienced entrepreneurs)
were selected (4 man, 1 woman) to
receive a raspadora and start up their
business. They organised themselves
in an association. Oxfam’s partner SIDO
provided two processors with a 2.5
million shilling loan each. In February
2011 the raspadoras were given out
and the processors were able to
notch up production immediately. One
month later a (ten ton) truck could
be filled with fibre for Katani Ltd. Two
processors were twice as productive
as the others. They ran out of working
capital because they had to wait for
the other three to be able to fill up a
truck and sell their product to Katani.
Then different things happened in
close sequence. Firstly, sisal fibre
sent to Katani generated relatively
low returns in comparison to the
local prices. This was due to the
transport cost, low grading and high
losses during brushing. Different
buyers had come to Kishapu to buy
unbrushed fibre. In September 2011,
two processors were reported to
have acquired more raspadoras,
while others continued working with
the supplied raspadoras. Katani
considered this unacceptable and
withheld payment of the last delivery.
Local supply
and market demand
All processors had obtained higher
loans for working capital from SIDO and
were starting to increase production.
Many of the machines were reported
to run for up to 24 hours a day. Large
quantities of fibre were sold to other
buyers. The production is by far
higher than expected in the business
model. For example in May 2012, Mboje
enterprise by far the smallest of the
processors and was producing 4.5 tons
a month, while others could produce
between 40-50 tons a month. In the
original plan on estimated a maximum
of 4 tons month per raspadora.
During the first 12 months of operating
the raspadoras, there was a grace
period whereby processors could
supply fibres to Katani without
loan repayments being deducted
from the fibre price received. The
moment the grace period expired and
loan repayment started kicking in,
processors were not so keen anymore
to supply to Katani, because Katani
would automatically deduct some
percentage of their income from
fibres as stipulated in the individual
contracts.
No fibres had been supplied to
Katani in 2012. As a result, five new
processors who were waiting to
receive their loan and machine could
not start before the situation with the
old processors was solved. New loan
agreements have been written with
less exclusivity of sales to Katani.
However they still include a minimum
monthly delivery to Katani of 2 tons.
11. Overall value chain
upgrading
Lessons from rope
making groups
Oxfam identified an opportunity to upgrade the local value chain that specifically
helped women. From another region in Tanzania, rope making machines were
bought. These manual rope makers enabled the speeding-up of the fully manual
rope making considerably and enabled making of stronger ropes. Four women
groups were trained on how to use rope-making equipment. From each of the four
groups a delegate had been on a rope makers learning journey. The plan was that
the women groups would contribute part of the cost of the machines from their
savings, supplemented by a grant from Oxfam.
Things did not go according to plan. In 2012, only 20-30 ropes per group had been
made while very few ropes had been sold. Due to a management oversight, the
machines were handed over to the groups before they had made their payment.
Subsequently, the Oxfam value chain advisor has found it very difficult to collect
the money from the groups. Another unfortunate effect was that in the absence of
own investment, there was no economic drive for the women group to make these
machines productive.
From the value chain analysis and the
current problems with Katani it was
concluded that having a brushing
machine in Kishapu would be a great
advantage. Officially the fibre needs
to be brushed before the quality and
price determination. Brushing the
fibres would enable the processors
to check the quality of their fibres
before supplying them to Katani and
would enable them to make a better
informed decision about the sales.
In addition, the women in the rope
making groups reported that they
were struggling because they had to
hand brush all the fibres. The brushing
machine would greatly benefit them.
In July 2011, a woman entrepreneur
was identified who would like to
own a brushing machine; she was
considered loan-worthy. In December
2011, SIDO provided the brushing
machines entrepreneur loan and the
machine was supplied in March 2012.
After some starting-up problems the
machine worked, but there was no
market and the brushing machine
stopped operations. There is currently
no local premium for brushed fibre. The
processors have access to market that
does not demand brushed fibre but
unbrushed. Local traders are buying
the fibre unbrushed and therefore they
take the risk of receiving a bonus or
loss after brushing.
12. Lessons from rope
making groups
Lessons from price fluctuations
Oxfam identified an opportunity to
upgrade the local value chain that
specifically helped women. From
another region in Tanzania, rope
making machines were bought. These
manual rope makers enabled the
speeding-up of the fully manual rope
making considerably and enabled
making of stronger ropes. Four women
groups were trained on how to use
rope-making equipment. From each of
the four groups a delegate had been
on a rope makers learning journey.
The plan was that the women groups
would contribute part of the cost
of the machines from their savings,
supplemented by a grant from Oxfam.
Things did not go according to plan.
In 2012, only 20-30 ropes per group
had been made while very few ropes
had been sold. Due to a management
oversight, the machines were handed
over to the groups before they had
made their payment. Subsequently,
the Oxfam value chain advisor has
found it very difficult to collect the
money from the groups. Another
unfortunate effect was that in the
absence of own investment, there
was no economic drive for the women
group to make these machines
productive.
The price of sisal in the area has
increased for all parties concerned. For
farmers the initial price was between
TSH 250 and TSH 300 per kilogram of
unbrushed fibre. At the end of 2011,
after increased competition between
the processors, it jumped in some areas
over night from 250 to 350. Thereafter it
increased to between 450, - and 500,-.
Many of the processors reported a price
of 500, - , the farmers reported 450,- .
However, this price increase has been
compensated by the increase in price
for the processed goods. Starting in
2010 (pre-project) at TSH 400, it rose
to a rather stable TSH 1200 in 2012.
The effective price Katani was paying
at the time of the conflict was TSH 880
per kilogram of unbrushed fibre. The
price was slightly higher than the price
paid locally, but included the cost of
transport and the high loss of brushing.
At that moment the local price was TSH
1100 per kilogram.
Furthermore, Katani paid for the lowest
grade of fibre. Reports suggest that
the quality of fibre was higher at that
moment. However, in 2012, the quality
was dropping, probably due to the high
demand, which resulted in the limited
quality requirements from market that
will take anything.
Oxfam has stimulated stakeholder
discussion and conflict resolution. In
total four meetings on communication
and conflict resolution have been
organised; the first in 2010, the second
in 2011, the third beginning 2012 and
the last at the end of 2012. Central in
all four meetings was communication
between the stakeholders and conflict
resolution during the last meeting.
3
Farmers receive their money after the leaves are processed they also are required to help process the fibres. The farms
bring the leaves to the raspadora and hang the unbrushed fibres to dry in the sun. After drying they bring them to a weighing
scale. After which they receive their money.
13. The effect on this project on the
value chain and the actors in
the value chain is significant.
Overall, the structure of the
market changed a few times with
new players entering and local
entrepreneurs following the lead
of the supported processors. In
supply of sisal we also see some
unexpected outcome. Individual
smallholders have contracts.
Some of the farmers have started
creating non-formal contracts,
sometimes timing the delivery and
checking the price. Furthermore,
the competition over the leaves
has driven up the price for farmers.
Nursery farmers are expected
to increase the production of
seedling since price and demand
are likely to rise.
With regards to expansion of
availability of other services we
have seen the following: SIDO is
supplying the local raspadors with
additional working capital. The
amount is significantly higher than
in the first year. A local mechanic
is building raspadoras at a fraction
of the cost of those from Tanga
(see box). Brushing facilities are
now available in Kishapu and
different rope making groups
have started production. Three
phases of development can be
distinguished in the value chain.
(1). First, the market with
fragmented and limited buying and
volatile prices. Then the market
created with the aid of Oxfam
is part of the value chain. With
one large buyer and sufficient
processing capacity production is
increasing, where the processors
need to bring their goods to Tanga
at own risk and expense.
(2). in the next phase, multiple
buyers come in to buy unbrushed
fibres in Kishapu
(3). finally the value chain
incorporates all and more value
is added by vertical integration of
the activities brushing and rope
making into the chain.
Effects on the overall chain
and market overview
14. Reflections and
the way forward
• • •
“After the introduction of 5 Raspadoras by Oxfam
and processors started to process sisal leaves, the
market became available. We came up with the
idea of making our own Raspadoras, some people
laughed at us and said we couldn’t, but we
managed. (…) Finally we saw that we are capable
to do this activity. After doing some calculation we
saw that we can make these machines at low cost.
Ultimately we got customers for the machine and
others are still coming. We have orders for five
more machines.” Mr. Kende, entrepreneurial
mechanic who builds raspadora machines
of high quality at a minimal price.
The project has generated a
serious smallholder sisal industry
in Kishapu District within a few
years. It is generating significant
incomes for producers and
processors. Incomes from sisal
production have doubled for
smallholder producers. Incomes for
processors have increased many
folds. There is still a lot of hedge
sisal underutilised in Kishapu and
neighbouring districts. Scaling out
the approach through stimulating
more processors in new areas will
benefit more farmers.
Linking producers to commercial
markets through a commercial
sisal company has given the
initial boost. Although the initial
loan model did not work out as
well as planned, it did attract
additional players in the sisal
market, stimulating production
and processing even more.
Engaging with major buyers will
still be an important approach for
any future scaling up, as well as
capacity building of producers
and processors, to enable them to
interact and negotiate with other
actors in the value chain in an
empowered way. We also see the
development of a local commercial
brushing facility which, if it
develops properly, will boost local
production even further.
15. Simplified overview of the projects beneficiaries and the support
they received from Oxfam
16. Central Technologies Building
Plot 96 Light Industrial Area
Mikocheni Area (Near TBC)
P.O. BOX 10962 Dar es Salaam, Tanzania
Tel: +255 22 2772726/18/89 Fax: +255 22 2775571
www.oxfam.org/Tanzania
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www.twitter.com/oxfamintanzania
