Strategic Options for Edible Oil Industry Development: Case of Sunflower sub-sector. 3 rd Annual Policy Conference March 02, 2017
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1 Strategic Options for Edible Oil Industry Development: Case of Sunflower sub-sector 3 rd Annual Policy Conference March 02, 2017
2 Sunflower Market System in Tanzania Why a Systemic Approach? Structure: Players, functions Patterns of behavior: Strategic or relational Rules of doing business: Formal or informal 2
3 Tanzania position in Seed & Oil Production in Africa FAO (2015) 4
4 Sunflower is produced in about 19 regions 5
5 Where is the value-add in Sunflower sub-sector? Seeds & Oil capture largest share of value-add Ensuring higher proportion of these benefits are captured by large majority (inclusiveness) contributes to growth + transformation National Sunflower Strategy (2015) Current improvements offer higher pricing points for both seed & oil: productivity + Oil composition & proportion 6
6 Demand side constraints Key systemic constraints Compliance & adherence to food safety & quality standards Branding & promotion of in-demand products Responsiveness in meeting clear buyer demand (sooner) Supply side constraints (production & processing) Availability & accessibility of improved seed varieties Access to bundled services/technologies suitable for enhancing production & productivity: Finance, extension, inputs, soil testing, insurance, post-harvest + processing technologies Capacity of farmer organisations to do farming as a business Business environment constraints Unharmonised taxes, levies Trust & transparency; coordination in the sub-sector 6
7 Strategic Options: End Markets High Specialist food-safe cold pressed oil [EU, Middle East] Food-safe cooking oil Bulk food-safe crude Oil [Domestic, India] Good Food-safe bulk oil (tied to social impact) [EU] Food-safe branded oil [China] Cake & by-products [Domestic, UAE, India] Low Confectionery grade food-safe seeds for direct consumption [EU] 3 5 years 1 3 years National Sunflower Strategy (2015) Immediate 7
8 Strategic Options: Increased production & productivity (Seeds) Options from improved seeds 4 hybrid varieties already registered Easy identification / differentiation by farmer Double current yield (0.8mt/Ha) Up to 40% oil yield (cf %) Seed cover more conducive for crushing Shorter maturity (harvest): 3 months cf. 4-5 months 9
9 Strategic Options: Increased production & productivity (Improving pollination by bees) Targeted pollination by bees has proved to increase up to 80% sunflower head productivity in Tanzania even when using improved seed varieties 10
10 Strategic Options: Increased production & productivity (Sourcing Structure & Logistics Considerations) Factors Influencing Supply Logistics Role of a logistics facility e.g. aggregation, storage Nature of processing taking place (primary or secondary agroprocessing) Capacities that should be at particular locations The nature of market being served: national, regional (EAC/SADC), export outside regions Gary Gereffi (2004) 11
11 Strategic Options: Increased production & productivity (Bundling Services, Production & Post-Harvest Technologies) Key services Scalable access to finance; Business development services (agro-enterprise management) Soil testing, profiling, mapping Key technologies Production equipment & machinery Customised input packages (seed, fertiliser, agro-chemical combinations) Insurance: multi-peril, weather Post-harvest handling equipment & machinery ICT-based information and extension provision models Climate smart supportive technologies 11
12 Strategic Options: Agro-processing technologies 12
13 Strategic Options: Infrastructure (Last Mile Infrastructure) Processing/Stor age/marketing 3 rd Order Class (Processing/ storage Infrastructure) Productivity Movement 1 st Order Class (Transportation Infrastructure) 2 nd Order Class (Power Infrastructure) FAO, EAC Secretariat, Kilimo Trust (2014) 13
14 Key factors for agro-processing to drive inclusive growth & competiveness Domestic, Regional (EAC &SADC), selected export markets: aim at both product & end market diversity Options for increasing production & productivity: seeds, bundling services/technologies, utilising better pollination Agro-processing technologies: Modular small-scale (3 5 MT/day), with better longevity and less down time; build skills and supportive capacity for sustenance of technologies Infrastructure: Last Mile Infrastructure of roads, power, and storage Enabling environment: Harmonise the different taxes & levies; build capacity for public-private dialogue 14
15 Thank You
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