ROOT AND TUBER SYSTEMS PROGRAM: Commercial Viability of Agro-enterprises Year 2007

International Institute of Tropical Agriculture – Institut international d’agriculture tropicale – www.iita.org

ROOT AND TUBER SYSTEMS PROGRAM:

Commercial Viability of Agro-enterprises

Year 2007


IN THIS PRESENTATION:

1. Cassava Enterprise Development Project in Nigeria

2. Small-scale Cassava Processing and Vertical Integration of the

Cassava Sub-sector in Southern and Eastern Africa

3. Utilization of Cassava Chips in Animal Feed in the ECA

Region


THE CASSAVA ENTERPRISE DEVELOPMENT PROJECT

IN NIGERIA

• Main objective is to increase economic opportunities through sustainable and competitive cassava production, processing, marketing and agro-enterprise development in selected communities of the South-South and Southeast States of Nigeria

• Implemented in the States of Abia, Akwa Ibom, Anambra, Bayelsa, Cross River, Delta, Ebonyi, Edo, Enugu, Imo, and Rivers

• In partnership with the Federal Ministry of Agriculture and Water Resources, National Root Crops Research Institute (NRCRI), Root and Tuber Expansion Programme (RTEP), Agricultural Development Programmes (ADPs), farmers, and private investors


PRODUCTION PROCESSING MARKETING

• create awareness

• training (crop prodn and mgt)

• Cluster farming

• Setting-up and training service

providers

• Link to input suppliers (agro-

chemicals, cuttings)

• demo on farm machine utilization

• Training on processing technologies

• Linking cassava processors to machine

fabricators

• Training on equipment and general

factory maintenance and hygiene

• Mechanized farming

• Guaranteed supply of farming

inputs

Guaranteed supply of raw

cassava tubers for processing

BUSINESS DEVELOPMENT SERVICES

• Facilitate establishment

of market linkages

CREATED JOBS, IMPROVED LIVELIHOODS

BIRD’S EYEVIEW OF ACTIVITIES

Improved

regularity of supply

of processed

products


CEDP ACHIEVEMENTS AS OF 2007 END

• Introduced 43 improved CMD resistant cassava varieties with a potential yield of

over 30 Mt/ha. Ten of these have been released and seven more submitted to the

committee for approval

• More than 200,000 farmers are planting improved varieties and the area currently

under sustainable land management is over 19,000 ha

• Commercial farms now exist

• 120,000 farmers received improved

CMD resistant varieties, and their

yields increased from 11 Mt/ha to

25.6 Mt/ha.


28.4

28.3

23.2

24.7

24.2

27.3

25.4

27.1

21.7

12.1

13.4

13.9

15.1

10.6

15.8

10.5

11.6

12.3

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Anambra

Abia

A' Ibom

Cr. River

Delta

Ebonyi

Edo

Enugu

Imo

Sta

tes

Yield t/ha

Loc_yld

Imp_yld

Yield of improved and local cassava varieties in farmers fields by State


• Established 451 processing

enterprises, 71% of which started

operations within 2007. The

types of processing centres are

SMEs (1-2 Mt/day), MPCs (<1

Mt/day), ICs, and mobile

cassava graters (0.5 Mt/day)

The new mobile grater entrepreneurs in

Enugu State (capacity 400 kg/day)

Job creation for youth and women

A micro processing center (MPC) in

Cross River State (capacity 600 kg/day)


• In these enterprises, 3,000 new jobs were created.

• Generated an accumulative income of N1,400,465,436 or $11,868,251.15 USD

(December 2007 exchange rate of 1USD=118N):

Mobile grater enterprises (MGEs) = 0.78%

Micro-processing centers (MPCs) = 2.58%

Small to medium-scale enterprises (SMEs) = 27.98%

Sales of fresh cassava tubers by farmer-beneficiaries = 68.10%

Weed control service enterprises = 0.56%

• In collaboration with Ekha Agro Farms Limited, the largest glucose syrup factory

in Africa was built in Ogun State, which has saved Nigeria $15 million per annum

on importation

• Promoted local, national, regional and international trade by linking producers,

fabricators and processors to markets


• Some examples:

The Aquada Enterprise (Abia State) now exports Scintilla hyper-fine gari flour to

Baltimore, USA under the AGOA Initiative. Export to date is 11 tons valued at

$46,875.00.

Drena Farms Limited (Delta State) now exports Gari and fufu to London and New

York in the USA. Export to date is 35 t valued at $22,400.00.

“White garri” for export

from Jon Tudy Foods in

Delta State

Jon Tudy Foods (Delta State) now

supplies 2,700 20-pound-bag gari to

USA and currently has an order of

3,000 bags per month.


Quality and

Standards

Quality and standard

specifications are available for

cassava flour/composite flour,

Gari & Starch by Standards

organization of Nigeria. The

Standards was largely derived

from ISO, Codex Alimentarius.


Financial Performance of Sample Enterprises (21% of 65%)

BENEFITS & COSTS

SAMPLE ENTERPRISES, ABIA STATE

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Um

uaba

li

Igere

Osisiom

a

Ngw

a 1

Ngw

a 2

Um

uahia1

Alayi

Ikwan

o

Um

udike

Um

uahia 2

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

BENEFITS & COSTS

SAMPLE ENTERPRISES, AKWA IBOM STATE

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Nun

g Et

ap

Uyo

1

Nun

g Es

i

Oka

p Ndu

a

Uyo

2

Aba

k

uyo 3

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, ANAMBRA STATE

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Umuze Ihiala AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, BAYELSA STATE

-20,000

0

20,000

40,000

60,000

80,000

100,000

Bay

elsa

1

Bay

elsa

2

Ned

ugo

Sagb

ama

Gweg

we

Bay

elsa

3

Bay

elsa

4

Ogb

ia

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON


COSTS & BENEFITS

SAMPLE ENTERPRISES, CROSS RIVER STATE

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

Abualegu Kanyang Kesimekpa NTABE Godilogo AVERAGE

VA

LU

E (

Nair

a) FIXED COST/Location

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, DELTA STATE

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Ugh

eli

Otor-ow

eh

Sape

le 1

Sape

le 2

Kwale

Nsu

kwa 1

Nsu

kwa 2

Nsu

kwa 3

Agb

or

Aba

vo

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, EBONYI STATE

-20,000

0

20,000

40,000

60,000

80,000

Abakaliki Ebonyi 2 Ebonyi 3 AVERAGE

VA

LU

E (

Naira) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, EDO STATE

-100,000

-50,000

0

50,000

100,000

150,000

Auc

hi

Idum

oza

Evb

odia

Ugo

Ivbiaro

Igbo

loba

Igba

nike

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON


COSTS & BENEFITS

SAMPLE ENTERPRISES, ENUGU STATE

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Nike Nsuka Enugu 3 AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, IMO STATE

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Imo 1 Imo 2 Ave

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON

COSTS & BENEFITS

SAMPLE ENTERPRISES, RIVERS STATE

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Bori

Ban

-Ogo

i

Umue

bulu

Kpo

rak Fa

rms

Omok

wa Fa

rm

AVERAGE

VA

LU

E (

Nair

a) FIXED COST

VARIABLE COST

TOTAL COST

TOTAL SALES, 1 TON

NET INCOME, 1 TON


Not all enterprises are making profit

• Internal group problems

• Poor accountability

• Breakdown of machines

CEDP’s approach to challenges mitigating profit:

• Community analysis before

intervention

• Part contribution by community

• Agroenterprise training

• Equipment maintenance training

• Conflict resolution

with group members

• Regular visits

• Cross enterprise visits

• Linkages to markets

AVERAGE COSTS & BENEFITS

SAMPLE ENTERPRISES, ALL CEDP STATES

-20,0000

20,00040,00060,00080,000

100,000

Abia

A.Ibo

m

Ana

mbra

Bay

elsa

C.R

iver

Delta

Ebo

nyi

Edo

Enu

guIm

o

Rivers

AVERAGE

VA

LU

E (

Nair

a)

FIXED COST

VARIABLE COST

AVERAGE TOTAL COST

SALES FROM ONE TON

NET INCOME


Some Challenges

• Limited capacity of local fabricators to produce high quality processing machines

even though machinery fabrication has been localized in the States

• Inconsistent policies

• High production costs (manual labour)

• Restive youths

• Militants

• Political problems

• Poor infrastructure (particularly in the Niger Delta region)

• Internal group disagreements, especially with the management of the MPCs

• Enterprises are facing difficulty to sell cassava to flour millers as a result of the non-

enforcement of the policy to use 10% of cassava flour in bread


RESULTS/OUTCOMES

• Small scale farmers, private investors and NGOs have adopted the HQCP

technologies

• Project outputs have influenced development of National standards for cassava

products by Standards bureau of Project Countries

Madagascar – 4 National Standards Approved (Roots, Starch, HQCF, Chips)

Tanzania - – 4 National Standards Approved (Starch, HQCF, Chips, HCN

Analysis)

Zambia– 2 National Standards Approved (HQCF, Chips)

• National Committees were formed partly based on the project outputs/experience

Tanzania - Ministerial Committee on Cassava Development

Committee on Standards for Root and Tubers and their by products

Zambia - Technical Committee on Standards for cassava products

Madagascar - National Committee on Standards for cassava products

THE SMALL-SCALE CASSAVA PROCESSING AND VERTICAL

INTEGRATION OF THE CASSAVA SUB-SECTOR IN

SOUTHERN AND EASTERN AFRICA


Musa - Bungu Group


RESULTS

• 8 farmer groups sensitized on production of high quality chips

• 9 local fabricators were trained on chipper fabrication + 15 local artisans trained

in machine operation and maintenance, drier construction and warehouse

maintenance.

• The introduction of combined improved processing methods reduced on

moisture retention, aflatoxin contamination and cyanide toxicity after chips

drying, while bag stacking on the wooden pallets reduced on moisture

uptake/pickup, aflatoxin contamination, insect damage and discoloration of dried

cassava chips during storage

• Increased use of improved technologies for processing high quality cassava

chips in the region

UTILIZATION OF CASSAVA CHIPS IN ANIMAL FEED IN THE

ECA REGION


• Well-organized and positioned market-oriented farmer groups with market

linkages in place

• Heightened positive farmers’ attitude and enthusiasm towards cassava as a high

income crop

• Improved product quality, reduced processing cost, increased product value

(Uganda: increase of 20-26% in product value; ave. 37.5% Gross Margin)


Abass, A.; Asiedu, R.; Davis-Mussagy, M.; Ntawuruhunga, P.;

Okechukwu, R.; Sanni, L.; Tarawali, G.

ROOT AND TUBER SYSTEMS PROGRAM: Commercial Viability of Agro-enterprises Year 2007

Technology

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