Cassava processing and marketing in Western and Central Africa VIth ANNUAL DONOR MEETING 9-11 May 2006 Casa San Bernardo - Rome, Italy

IFAD has been supporting the cassava sector since 1996 USD 100m invested to date in regional programmes in Ghana, Nigeria, Cameroon and Benin and expanding further in the Congo region Cassava important in household food security and poverty alleviation in rural areas Cassava development offers strong targeting opportunities: women are the primary processors Cassava has a future strategic dimension: urban population growth averaging 4-6% per annum Cassava regional market in WCA more and more integrated: important trade opportunities

Lessons learned and moving forward Focusing on supply has had important results in smallholder productivity growth: it is time to focus more on demand and work backwards to link to supply Accessing the market is key and the future focus area Markets are local, national, regional and international National efforts, pursued by IFAD through national programmes, have not permitted experience and knowledge sharing: thinking regionally is key Regional policies are shaping more and more national policies

The Market is Key Market demand drives processing and production There are “many markets” for cassava: The traditional food market The feed market The food-grade flour market The starch and derivates market The ethanol market Each market defines a production, processing and marketing system with specific requirements Processing and production must comply with market requirements Production Processing Marketing

Which market to access? Traditional food products: the growing, vibrant food market dominates 95% of the cassava market in WCA and will remain dominant in the short/medium term High quality cassava flour: Nigeria’s recent policy of 10% inclusion of cassava flour in bread can offer important demand and has prospects for the short/medium term Animal feed: meat and poultry consumption expected to increase in the region (Nigeria has banned poultry imports) and cassava as feed can reduce animal feed costs by 30%- has potential in the short/medium term Industrial use of cassava: starch, ethanol, etc. organizing cost-efficient cassava supply difficult; a viable option possibly in the long run, in Nigeria possibly in the medium term International markets: currently not an option –competition from Asia

And therefore...think regionally, strengthen nationally In the short and medium term, regional and national markets should remain the preferred targets Identifying opportunities is not enough: ability to deliver constant quality and quantity is a must! National systems should build on strengths: intensification and diversification of existing (food) product markets National programmes should not re-invent the wheel: exchange lessons learned amongst the different programmes to go faster Spur dialogue and partnerships at all levels to support efforts and strengthen the industry- help shape regional policies conducive to cassava production, processing and marketing

Linking cassava markets to smallholder producers: IFAD’s viewpoint Promote: competitive and market-based cassava commodity chains Identify: weak areas of the chain and intervene Establish: private sector partnerships for accessing markets and developing market linkages Innovate: production, processing marketing Strengthen: smallholder farming and rural enterprise development Equip: the rural poor to respond to market signals and requirements Always remember: Improve the target group’s bargaining power to access more value addition from the CC

Regional Processing and Marketing Initiative on Cassava (RPMIC) Objective: to make existing and future IFAD cassava-related programmes more effective from a marketing standpoint through proper coordination among them and with other similar non-IFAD initiatives Regional Workshop held in Accra, Ghana on 20-22 March 2006 to launch the RPMIC 50 participants from IFAD-funded projects, research organizations, private sector partners, farmer organizations and donors attended An Accra Action plan is one of the major results

The objectives are as follows: Accra Action Plan I: Upgrading of traditional food products cassava chains The objectives are as follows: Develop and promote best practice processing facilities. They should respond to market requirements, be affordable for the rural poor, respect product quality, hygiene and environmental aspects.; Contribute to the standardization of processing equipment in West and Central Africa; Test the introduction of improved retail packaging at a large scale; “Bring cassava in the supermarket”: develop the domestic niche market for high quality cassava products by establishing partnerships with private sector

Accra Action Plan II: The High Quality Cassava Flour Commodity Chain The objectives are: to set up (one or two) concrete value chains for high-quality cassava flour in each of the four countries (eventually also in Sierra Leone). In order to reach this goal, RPMIC will establish partnerships with private sector processors; to work on HQCF drying technology in order to bring down the cost of drying; the project is only interested in technology that can bring down the cost of drying significantly, not in marginal technical improvements; to establish a regional learning and exchange network on the HQCF market segment.

Accra Action Plan III: The Industrial Raw Material Cassava Commodity Chain The objective is: To develop supply chains for interested industrial users of cassava. The action plan will focus on the organisation of small farmers in outgrower schemes in order to make cassava available as raw material for: Feed: Pigs, poultry, fish, ruminants, camels, horses Unfermented flour: food / industrial, bakeries, confectionaries, plywood and glues Ethanol: strong growing markets with demand > than a billion litres in Nigeria and Ghana: Starch: Potential uses and demand (textiles, food & beverages industries, paper & plywood, oil industry, plastics & glues)

Accra Action Plan IV: RPMIC Management and Information Sharing Activities Secretariat established to support and monitor the implementation of the action plans The secretariat will facilitate and promote the organisation of regional learning and exchange events The secretariat will organize and promote training on market-oriented themes The secretariat will facilitate linkages with regional private sector operators Information sharing will take place through linkages established with IFAD’s FIDAFRIQUE internet-based information network

The end

Market opportunities by countries receiving IFAD support Geography Product Market Ranking Opportunity Timeframe Benin Cameroon Domestic Traditional food products 1 Short term Animal Feed 3 Mid term Flour for bakery and confectionary industry Regional 2 Ghana Nigeria Mid Term Short Term (Nigeria) / Starch 5 Long Term

WCA SWOT: Opportunites & Threats Growing urbanization, new distribution channels (supermarkets) Changing consumers food habits, demand for convenience food New markets can be developed (eg. small scale animal feed or HQCF) Intensifying cassava-based human food processing and trade Governments have started to give attention to cassava industry development NEPAD Initiative on Cassava (NPACI) and Donors’ interest Aggressive competition for cassava industrial use (i.e. Asia) Low international market prices Low local consumer purchasing power Changing consumers food habits Added value grows downstream in the commodity chain Different tariff structures in the sub-region; sector policies not aligned Imported cereals subsidies

WCA SWOT: Strengths & Weaknesses Large, traditional food market Although mostly informal, very widespread availability of food-related processing and trade Cross border trade channels already exist Cassava is price competitive in some product markets (eg. animal feed) IITA (& other research centers) experience and knowledge Consensus on winning factors for high rate cassava growth Smallholder farmers commercialize only a minor part of production Land tenure regulation uncertainties Market infrastructure need improvements Fresh roots too expensive for industry Commodity Chains at embryonic stage Policy makers support does not necessarily match business needs Industrial grade processing not existing Long term price cycles