THE ONION AND GARLIC VALUE CHAINS
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1 THE ONION AND GARLIC VALUE CHAINS A Quick Assessment of the Manyara and Arusha Production Zones Presented BY: Onesmo Kenenth MRA Associates
2 WARD DISTRICT CROP Engaruka Selela STUDY AREA MONDULI Onions MONDULI Onions Mang ola KARATU Onions Bashay MBULU Garlic Endagaw HANANG Garlic STUDY BACKGROUND Objective: identify value chain obstacles and & provide recommendations on how to improve the functioning of the chains and increase fair returns for all main actors. Respondents interviewed: - Farmers, Traders, Agro-dealers, Supporting NGOs, BDSs, & LGAs Tools Quantitative: Structured questionnaires (farmers, traders, agrodealers) Qualitative: KIs (transporters, LGAs, NGOs, BDSs, Lead farmers) & FGD (traders)
3 THE ONION VALUE CHAIN
4 BASIC CHARACTERISTICS OF THE PRODUCTION AREAS PRODUCTION AREA No. OF FARMERS AV. FARM SIZE AV. FARMER EXPERIENCE (YEARS) ENGARUKA Less than 250 ½ Acre > 5 Years SELELA Less than 250 ½ Acre 2 > 5 Years MANG OLA 1, Acres > 5 Years
5 FUNCTIONAL PERSEPECTIVE Water permits/ Produce cess, Market levies Road toll, Kajiado produce cess, customs, phyto-certification, radiation certificates, levies, weights Value chain with synthesis circles and measures, village land titles FARMERS Farm-gate sales Traders Wholesale markets Buyers Inputs Finance Extension Agro-input Mechanization Inputs Finance Transport Inputs Finance Transport
6 INSTITUTIONAL PERSEPECTIVE Major Channles: 1. The Kilombero Hub Destination markets: - Arusha, Nairobi & Mombasa 2. The Mangola Traders Led Channel Destination markets: - Lake Zone, Kampala & S. Sudan )" 3. The Independent Farmers Channel Mostly stem up somewhere with the two leading channels
7 FARMERS GROSS MARGIN ANALYSIS
8 TRADERS GROSS MARGIN ANALYSIS
9 OPPORTUNITIES AND CONSTRAINTS SOURCE OF SEEDS Onion Farmers SEEDS No improved seed used in all the surveyed areas 1% He was Given by NGO REASONS??? 23% I buy seed and/or seedlings 5% 71% I buy seed and/or seedlings I make my own seed and seedlings I make my own seed and seedlings
10 SEEDS CONTD: Seed Type Germination Rates Cost/Kg Total Cost Engaruka Local Seed 12kgs/Acre 24, ,000 Balton Improved Seed 1 Kg/Acre 225, ,000 There seems to be a serious knowledge/information gap amongst the farmers that needs to be addressed
11 WATER AND IRRIGATION inadequate water for my farm 1% 8% 3% 2% inadequate water for my farm flooding of farm land inadequate water for my farm lack of irrigation technology 18% 49% inadequate water for my farm lack of irrigation technology flooding of farm land inadequate water for my farm water use conflicts with neighbours 4% inadequate water for my farm water use conflicts with neighbours lack of irrigation technology no problem 13% 1% water use conflicts with neighbours
12 GOOD AGRICULTURAL PRACTICES Biggest challenge is plant protection and plant nutrition Farmers over-estimate their capacities ending up in very poor farm management Others are too desperate for solutions ending up in overinvestment in fertilizers and pesticides e.g: 600kgs/acre of fertilizer 3 days spraying cycle
13 STORAGE AND POST HARVEST 47% sell their onions without storage Building a store is very expensive 15 20million Cost of hired storage is 10% of stored value - only middle level farmers can afford Another key determining factor is farmers cash flow needs Traders also prefer the on-farm sales since its easier to collect produce LOSSES
14 STORAGE AND POST HARVEST LOSSES Onions are sold in three grades: Grade 1: The big sized onions. They are the ones considered a harvest. Good harvests will give 80 bags while poor harvests can go up to 40 bags Grade 2: The small sized onions (Mbururu or Segere) Grade 3: The bulb-lets (Kwasu) A good harvest will give bags of grade 2 & 3 together while a poor harvest bags Grade 2 & 3 are packaged at 140 t0 180kgs sacs and only 65 fill a truck that will take bags of grade 1 Grade 2 & 3 sell at 12,000 sac and are usually consumed by the very low income earners in the urban markets
15 COMPETITION
16 ACCESS TO FINANCE borrowings from friends profit for previous season Most farmers don t have a single source of capital indicating that onion proceeds may not be enough 1% 4% 5% 1% 4% 8% 1% 4% 1% profit for previous season borrowings from friends A majority ploughing proceeds from previous season is an indicator for good margins 8% 4% profit for previous season profit from other business KDA offers 6 months seasonal loans to about 200 farmers 57% profit for previous season profit from other business loan from bank profit for previous season profit from other crops 200 million investment with some 60 million annual recapitalization
17 1. SEEDS VALUE CHAIN RECOMMENDATIONS Introduce demonstrations and trials for improved seeds Variety characterization/identification Introduce QDS 2. SOIL Soil sampling and analysis 3. WATER & IRRIGATION Promote water conservation & Irrigation technologies
18 VALUE CHAIN RECOMMENDATIONS 4. GAP TRAININGS Only 47 out of 173 had received some kind of training. There should be more trainings 5. STORAGE Introduce more affordable collective stores Introduce more affordable household level storage technologies 6. COLLECTIVE MARKETING Strenthen farmer groups to offer collective marketing services including bulking, market information & negotiation Graduate them into marketing agents or AMCOS
19 VALUE CHAIN RECOMMENDATIONS 7. ACCESS TO FINANCE Optimize farmer productivity to reduce their vulnerability to price index risks Introduce entrepreneurship and book keeping trainings for reduced losses and greater margins Introduce SACCOS at the ward level for increased financial intake
20
21 THE GARLIC VALUE CHAIN
22 BASIC CHARACTERISTICS PRODUCTION AREA No. OF FARMERS AV. FARM SIZE AV. FARMER EXPERIENCE (YEARS) BASHAY Acre > 5 Years ENDAGAW Acre 2 > 5 Years Land use: Bashay 1,200ha under garlic out of 2,500 ha potential Endagaw 640ha under garlic out of 1,200ha potential Garlic is a major cash crop in both areas though maize which is considered food crop still leads as a cash crop in the areas
23 FUNCTIONAL PERSEPECTIVE Water permits/ levies, weights alue chain with synthesis circles and measures, village land titles Produce cess, Market levies Market infrastructure, Road-blocks FARMERS Farm-gate sales Traders Wholesale markets Buyers Inputs Finance Extension Agro-input Mechanization Irrigation Inputs Finance Transport Inputs Finance Transport
24 INSTITUTIONAL PERSEPECTIVE RETAIL PROCESSING WHOLESALE TRANSPORT FARM0GATE6SALES Med0Foods PROCESSORS (Med0Fodds6etc) BULKING BARAGA6AMCOS LOCAL6AGENTS/6TRADERS DIDIHAMA6AMCOS PRODUCTION ENDAGAW6Farmers URBAN6RETAILERS URBAN6WHOLESALE6MARKETS WHOLESALERS BASHAY6non6 DIDIHAMA6 members DIDIHAMA6Farmers Major Channles: 1. The Integrated Trader Led Channel Prevailing channel for both areas. The agents know the markets 2. The AMCOS Channel They bulk the produce but don t have the markets still 3. The Processor Channel: Still very small volumes of uptake. Deal directly with farmers at the farm-gate INPUTS AGRO0DEALERS6(Local6 Agro0dealers6in6Bashay,6 Dongobesh6&6Endasaki)6 FINANCE66(6DIDIDHAMA6 SACCOS,6Endasaki6SACCOS,6 KISUSI)6 EXTENSION (6Local6Agro0dealers,6LGAs)66
25 SECONDARY ACTORS 1.AGRO-DEALERS Garlic Only Farmers Pesticide Breakdown Insecticides 2. MVIWATA Farmer group strengthening 8 farmer groups in Bashay alone Infrastructural rehabilitation GAP trainings through promoters 51% 37% Herbicides Foliar Fertilizers 3. MIVARF 35 groups 813 farmers Infrastructural projects 10% 2% Fungicides Linked to JB Agro-vet & Kisusi 45 thousand dollar grant for processing plant
26 4. FARM AFRICA Conservation project for the Nou forest & River Mangisa 5. CRDB Financing the Endasaki SACCOS 6. Mbulu DAICO Planning a warehouse receipt system for garlic Earns 240 million annually from garlic trade Irrigation infrastructure 730 mil Processing facilities SECONDARY ACTORS 4. MED FOODS Offering agronomic support with TAPP
27 FARMER GROSS MARGIN ANALYSIS
28 TRADERS GROSS MARGIN ANALYSIS
29 OPPORTUNITIES AND CONSTRAINTS THE INCREDIBLE PRODUCTIVITY GAP Optimum productivity is bags/ acre, average productivity is 10 bags/acre INADEQUATE WATER FOR IRRIGATION Too much water during the rainy season but 1,760 acres still cant be farmed due to lack of water SEEDS Farmers cannot overcome the cash temptation and preserve the best cloves for seed
30 OPPORTUNITIES AND CONSTRAINTS Garlic Fertilizer Types FERTILIZER USE Garlic farmers esp. in Bashay use more of farm manure than chemical pesticides 0 chemical fertilizer farm manure farm manure chemical fertilizer EXTENSION & GAP TRAININGS Only 15% had received some form of advice mostly from agro-dealers Any advice received by Garlic farmers? yes 15% no 85%
31 COORDINATED WATER MANAGEMENT The lack of such coordination is resulting in the following: Slow response to the increasing sedimentation of the Bashay dam No regulatory mechanism to preserve more water during the rainy season Reduced sense of ownership and management as the water flows further downstream Disagreements over infrastructural development priorities No value-add by the basin authorities from the revenue collected
32 LEADERSHIP GAPS IN AMCOS & SACCOS The AMCOS & SACCOS share members but different leaderships Each strives to increase revenue & benefit for its members AMCOS owns the revenue but SACCOS manages the money AMCOS feels that they can manage the money without the SACCOS SACCOS has more credibility since they have a legal mandate and the machinery to manage fund If the AMCOS does not give the revenue to the SACCOS the SACCOS may not have the collateral If the SACCOS does not borrow and there is a price decline, it will not be able to cushion the AMCOS from the financial shocks THEY MUST WORK TOGETHER!!
33 STORAGE AND BUYER REQUIREMENTS Existing storage capacity is 800 tons, only 150 tons stored through the DIDIHAMA store Produced capacity is 5,000 tons Traders prefer to buy from the farmers homes and not the store There isnt enough ventilation in the store hence inadequate aeration Garlic changes color and weigh s less since most of it is brought to the store not completely dry
34 VALUE CHAIN RECOMMENDATIONS 1. WATER USE AND IRRIGATION Develop a multi-stakeholder water use plan Train farmers on simple water conservation & irrigation techniques Increase infrastructural rehabilitation
35 VALUE CHAIN RECOMMENDATIONS 2. IMPROVE ON EXISTING GARLIC VARIETY Introduce seed multiplication and intensification program 3. SOIL FERTILITY MANAGEMENT Conduct soil sampling and testing in order to advise the farmers on whether to change their current regime 4. GAP TRAININGS Introuduce a ToT kit for LGA extension officers and other stakeholders Train the farmers on GAPs Work with agro-dealers on demonstrations
36 STORAGE VALUE CHAIN RECOMMENDATIONS BRING DOWN THE WALLS???? TRADERS Help them form own association or reference group
37 VALUE CHAIN RECOMMENDATIONS 5. ORGANIZATIONAL STRENGTHENING Train the farmers and their leaders on appropriate organizational structures and functions Train the farmers on more advocacy and lobbying skills to ensure representation at the LGA platforms Create MoGs 6. STAKEHOLDER LINKAGES Hold regular meetings where all stakeholders especially farmers and traders are represented
38
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