MOBILE CASSAVA CATALYTIC INNOVATIONS IN AFRICAN AGRICULTURE CENTENNIAL SERIES

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1 CATALYTIC INNOVATIONS IN AFRICAN AGRICULTURE CENTENNIAL SERIES MOBILE CASSAVA DADTCO MOZAMBIQUE The Catalytic Innovations in African Agriculture Centennial Series was developed as part of The Rockefeller Foundation s Centennial publications. The Rockefeller Foundation, as an institution with a long history in agricultural innovation, commissioned this series to highlight promising developments in African agriculture, agricultural markets, and value chains on the continent. The projects and programs featured were selected from a review of nearly 150 such initiatives based on criteria that included a focus on smallholder farmers. THE ISSUE Cassava has been an important staple food in Mozambique for centuries. This root, however, has not been commercialized because market demand has been poor and rapid spoilage makes transportation of cassava from rural areas to urban centers and processing factories difficult. As a result, farmers have been unable to generate significant cash income through selling cassava. THE INNOVATIVE RESPONSE Peter Bolt, founder of the Dutch Agricultural Development & Trading Company (DADTCO), spearheaded the development of a new technology that brings the cassava processing factory to the farmers. The Autonomous Mobile Processing Unit (AMPU) is a small factory that transforms the root into high-quality cassava cake that can be stored for two years. The AMPU operates in a cargo container that can be moved from one rural area to another during harvesting. DADTCO buys cassava roots from individual farmers living near the AMPU and processes the roots into cassava cake. Cassava cake can be used in numerous agricultural and industrial products, including Impala beer, a new product that currently uses all the cassava cake produced by DADTCO in Mozambique. DADTCO is operating AMPUs in Nigeria, Mozambique, and Ghana, with the prospect of rolling out to 27 other African countries. The Catalytic Innovations in African Agriculture Centennial Series recognizes innovations across the continent and includes projects not funded by The Rockefeller Foundation. ALL PHOTOS: TOBY ADAMSON / OXFAM AMERICA

2 MOBILE CASSAVA DADTCO MOZAMBIQUE 2 PROJECT BACKGROUND THE STAKEHOLDERS DADTCO s Mozambique subsidiary, DADTCO Mandioca Mozambique, has been operating in Nampula province since 2011 in collaboration with partners. They include the Instituto de Investigação Agrária de Moçambique (IIAM), a public research institution that has developed improved cassava varieties suited to the environment of northern Mozambique, and Corridor Agro Limited (CAL), which multiplies IIAM s improved varieties. The International Fertilizer Development Center (IFDC) provides training in improved techniques and distributes new varieties developed by IIAM to farmers. ORAM is a local nongovernmental organization that organizes the information-sharing events where DADTCO representatives introduce the company to the community and explain how cassava producers can sell their roots to them. Cervejas de Moçambique (CDM), a subsidiary of SABMiller, is buying DADTCO s high-quality cassava cake and using it to manufacture Impala beer, a new product. In 2011, about 280 farmers sold to DADTCO; in 2012, that number climbed to 951; and in the first five months of 2013, it reached 932. DADTCO plans to have four AMPUs operating and to reach 12,000 to 15,000 farmers in the next few years in Mozambique. Farmers are improving production methods, reducing post-harvest losses, and selling more of what they produce while using less labor. OVERVIEW DADTCO, a Dutch company with a social mission, has introduced a new cassava-processing technology and business model in Mozambique that has the potential to substantially raise the incomes of cassava farmers. DADTCO purchases cassava from farmers in Nampula, Mozambique; processes it; and sells it to Cervejas de Moçambique (CDM), a subsidiary of SABMiller. CDM produces Impala, a new cassavabased beer that is sold locally. However, the potential exists to produce numerous other food and nonfood products with cassava cake. In Nigeria, DADTCO has built a factory that produces flour to be sold locally that can replace expensive wheat imports. DADTCO has helped IFDC procure donor funding to support the training of farmers in new planting techniques, and it works with ORAM to sensitize communities to the idea of adopting new varieties and practices and selling the company their cassava roots. DADTCO arranges transport of roots from rural communities to the Autonomous Mobile Processing Unit (AMPU), where they are weighed and famers are paid in cash. The roots are then processed by the AMPU into high-quality cassava cake, which is packaged and loaded onto a CDM truck and taken to the CDM brewery. There, it is brewed into Impala beer, packaged, and then sent to rural retailers. As a result, farmers are improving production methods, reducing post-harvest losses, and selling more of what they produce while using less labor, which means that they can earn more income and have more time for other activities. GOALS Peter Bolt s vision which drove the AMPU and DADTCO business model was to decrease African countries dependency on food imports while giving farmers realistic, competitive markets for their products. Goals of the innovation: Engage with farmers as business partners to commercialize cassava in a profitable way Improve food security and incomes of farmers through increased cassava production and sales Address post-harvest losses and add value by processing cassava near the farms Replace imported grains with domestic cassava for multiple uses in profitable domestic industries and for export

3 3 WHAT IS INNOVATIVE ABOUT THIS PROJECT? BRINGING THE FACTORY TO THE FARMERS Traditionally, farmers have cultivated cassava primarily for consumption but have sold some in local markets after shredding and drying it. Selling fresh cassava to DADTCO, which arranges transport and buys in large quantities, offers farmers the opportunity to earn larger amounts of cash while using less labor. The AMPU is mobile; it can be moved to different areas according to harvesting schedules. NEW USES FOR STAPLE CROPS Cassava is processed in the AMPU into cassava cake, which can be further processed to produce starch for food and industrial uses, fiber, animal feed, ethanol, beer, sugars, and flour. Cassava is resilient and can thrive with little rain and in poor soils, making it a good multipurpose crop for a changing climate. In Mozambique, the only product currently produced is Impala beer, but DADTCO plans to begin producing cassava flour to replace expensive wheat imports. CREATING MARKETS DADTCO has implemented an attractive forwardcontracting scheme that gives farmers a guaranteed market, training in improved practices, and diseasefree stems to plant, but does not compel farmers to sell. This contract scheme seems to provide great opportunities for farmers to increase their incomes with little risk. SHARING RESEARCH AND BEST PRACTICES WITH FARMERS Farmers have access to new varieties of cassava, which are disease-resistant, have high yields, and have been tested in the climate and soils of this region. With traditional varieties and techniques, farmers generally produce only 10 tons of roots per hectare, whereas with improved varieties and techniques, IFDC and IIAM estimate that they will easily produce tons per hectare. New techniques are being introduced by IFDC extension agents. These techniques are easy to learn and adopt. They include using a particular part of the stem for planting, pretreating stems with pesticide and fungicide to protect them from pests such as termites, and planting at a density of 10,000 stems per hectare. Also, farmers can further increase their yields by killing diseased plants and experimenting with four new cassava varieties that have been developed for their disease resistance and high yields. ABOVE: Dutch Agricultural Development & Trading Company (DADTCO) operates two autonomous mobile processing units that can be transported by tractor-trailer. These factories on wheels typically stay in one location for two to three months. COVER: It takes about two metric tons of roots to produce one metric ton of cassava cake. Here, workers load bins of fresh cassava to be washed, peeled, and pulverized. CATALYTIC INNOVATIONS IN AFRICAN AGRICULTURE CENTENNIAL SERIES Featured innovation MOBILE CASSAVA

4 MOBILE CASSAVA DADTCO MOZAMBIQUE 4 THE FUTURE: OPPORTUNITIES AND CHALLENGES OPPORTUNITIES SCALE DADTCO sees its prospects as strong both within Mozambique and on the African continent as a whole. CDM s demand for cassava cake is high and is growing owing to the popularity of Impala beer. With improved cultivation techniques, farmers will increase their yields from 10 tons per hectare to tons per hectare. DADTCO hopes to reach 12,000 to 15,000 farmers in Nampula and to expand into cassava flour production in coming years. REPLICATION SABMiller s interest in replication and ability to prefinance it in several other countries, including Zambia, Tanzania, South Sudan, Kenya, and Uganda, over the next few years makes replication almost certain. SUSTAINABILITY DADTCO s business model is profitable. Environmental sustainability is a priority, and DADTCO is working with IFDC to promote crop rotation and protect soil fertility. CHALLENGES TIMING, communication, and transportation Cassava can stay in the ground months, but when harvested, it spoils within two days. Therefore, DADTCO must coordinate harvesting and transportation activities carefully with farmers and truck drivers. Coordination presented challenges because farmers access to phones is limited, and some were unaware that they needed to communicate with the company to arrange transport. Spoilage resulted when transport was not possible. Transporting crops on very poor roads and with high fuel costs has also been a challenge. In the future, DADTCO plans to establish regular pickups at collection sites and to strategically rotate the AMPU to new areas to minimize transport costs throughout the year. Competition Interest in cassava commercialization has been demonstrated over the past decade by the government of Mozambique and by donors, who have funded research on the sector and on improved varieties of cassava. Large-scale commercial production could push cassava prices down, which could negatively affect farmers incomes. However, given the various uses of cassava and high world food prices, this threat may not be significant. Food security Nampula province produces a surplus of cassava, and improvements in productivity promise to increase supply further. But at the individual household level, the opportunity to sell in bulk for cash could create an unintended risk, because farmers may sell too much of their harvest, creating food shortages later in the year. NEED FOR RESEARCH AND MONITORING Understanding the sustainability of cassava commercialization will require studying how it is affecting the most vulnerable households, gender relations, migration, and other social issues. A monitoring and evaluation system should be put in place to understand how the business model is affecting farmers and local communities. This system would help to mitigate the risks of any unintended effects on household food security or increased alcohol consumption, and could also identify ways to improve the current operational model for maximum economic and social value. CLOCKWISE FROM TOP LEFT: DADTCO pays farmers for fresh cassava tubers. The introductions of mobile processing factories, disease-resistant stem varieties for planting, and organized collection and transport of harvests are turning cassava into a cash crop in Mozambique and cassava processing into an industry. Cassava is 70 percent water and starts to rot within 48 hours after harvest if it s not processed. CATALYTIC INNOVATIONS IN AFRICAN AGRICULTURE CENTENNIAL SERIES Featured innovation MOBILE CASSAVA

5 5 I have been able to buy a bike, clothes for the children, and school supplies. ERNESTO SEBASTIAN NAMPULA PROVINCE, MOZAMBIQUE

6 PROFILE: ERNESTO SEBASTIAN Like most residents of Nampula province, generations of Ernesto Sebastian s family have relied on cassava for survival. Now, thanks to an innovation that brings the factory to the farm, cassava can do more than keep him alive it can help him make a living. 6 Ernesto Sebastian wrapped two roughly hewn hands around the smooth stalk and yanked to no avail. Stooping over, he yanked again, lost his footing and fell. When he pulled a third time, he produced something never seen in the ruddy Mozambican soil until recently: evidence that smallholder farmers can play a key role in an expanding commercial cassava industry. Cassava is key to survival in northern Mozambique. The tuberous plant supplies the country s largest single source of calories 30 percent, according to a 2011 survey by the UN Food and Agriculture Organization and is a way of life for 300,000 smallholder farms in the region. Sebastian has farmed cassava for more than 30 years, as his father and generations untold did before him. Yet, as with most farmers in Nampula province, Sebastian has grown cassava largely as a staple crop, rather than as a cash crop. Cassava s high water content which causes unprocessed cassava tubers to start rotting within 48 hours of harvesting plant disease, poor roads, and lack of transport had made cassava commercially unappealing. That is, until 2011 when the Dutch Agricultural Development & Trading Company (DADTCO), a private agricultural business, set up a mobile cassava processing unit just five kilometers from Sebastian s farm. The factory on wheels washes, peels, and pulverizes cassava into a moist pulp that can be packaged and warehoused for up to two years. Bypassing the middlemen Previously, if Sebastian wanted to sell any portion of his cassava harvest he had to first shred the tubers by hand and dry them in the sun. Even then, he was at the mercy of the 100 or so itinerant traders who roam the area, buying dried cassava from farmers and reselling it to wholesalers. When he sold to the middlemen, he would get no more than 1,500 new Mozambican meticals (MZN), about US$49, for the dried equivalent of one metric ton of unprocessed cassava. Usually, it would be far less. Now, he has a contract with DADTCO that guarantees him 1,500 MZN for every metric ton for the heavy, unprocessed cassava tubers. The price does not fluctuate with weather-related supply-and-demand levels, as it does with traders. In fact, DADTCO offers 2,500 MZN if the farmers can deliver it themselves, though few can do so. Life is good, said Sebastian, 51, who shares several single-room dwellings with his wife, Amelia Jorge, seven children aged 10 to 26 years, and sons-in-law and their children. If the factory stopped working, we would still grow cassava, he said matter-of-factly. But because it is here, I have been able to buy a bike, clothes for the children, and school supplies, he said in his native Mecua. Securing a future Sebastian hedges his bets, nevertheless. He earns extra income as a security guard at the DADTCO processing plant. And, more importantly, he dedicates one and a half hectares of cassava for his family s consumption and a similarly sized plot for cassava sale to DADTCO. It s a practice that DADTCO began recommending after finding that farmers would sell their entire crop and would run out of food. He also intercrops cassava with maize and two varieties of beans to protect soil integrity and provide additional food security. So far, his bet has paid off handsomely. Using improved varieties of diseaseresistant stems for planting he received from Cassava Plus, a program run by DADTCO and the International Fertilizer Development Center (IFDC), a US-based nonprofit organization funded by public and private sources, Sebastian s commercial plot yields three metric tons of cassava. Previously, the same land yielded only metric tons. The cassava traders still ply the area, particularly for the many farmers who simply live beyond the eight collection points that surround the DADTCO site. They also come by Sebastian s farm from time to time, but he has no plans to sell to them. They still come by because there are people who don t want to sell to DADTCO. They say the price is not fair, that they want 2,000 [MZN], he said. I tell them I m satisfied. RIGHT: Ernesto Sebastian, 51, is one of 300,000 smallholder farmers in Nampula, Mozambique, who grow cassava. Sebastian has farmed cassava for more than 30 years, as his father and generations untold did before him.