By: Arno Maatman, Project Director 2SCALE
In a previous blog I referred to the clashes between herdsmen and farmers that were all over the news in Nigeria, while highlighting the potential for more sedentary lifestyles of the Fulani through integration in (formal, remunerative) dairy value chains. In the same blog, I wrote about the sedentary farmers in Oyo State (where our program with the Fulani is as well), expanding the areas cultivated with cassava.
A week after the meeting with Mohammed, I was preparing for a strategic oversight meeting with Psaltry, a medium-scale cassava processing company, Nigerian Breweries, a mayor buyer of cassava starch, and representatives of the cassava farmers (supplying Psaltry).
Nigerian Breweries (Heineken) while not directly involved in the day-to-day interventions of the partnership, played a championing role, among other things by providing support to Psaltry through kind offtake contracts (read … prices) in the kick-off years and by providing financial support to purchase a second processing line. I have written already about Psaltry a few times. Psaltry is led by Yemisi Iranloye, a lady with guts, entrepreneurship skills, and the voice and conviction of a preacher. She may well have been the very first entrepreneur in Nigeria to construct a processing factory in a rural place, i.e., at proximity of the farmers. At a location, which at the time did not have any infrastructure, no electricity. She also decided to invest in a processing line with modest capacity, of some 20 tons of cassava roots per day, not exactly the Nigerian way. She could always buy a similar one, whenever needed (which she did indeed). She also established an extension unit, to develop strong linkages with the farmers in the region. Today, Yemisi works with some 1,200 farmers that regularly supply cassava to her. About 500 of them receive inputs and other services (tractor, spraying) on credit; farmers receive stems and training. 2SCALE finally supports this partnership through training of the extension staff, through organizational support to Psaltry and by developing local and regional networks to strengthen access to and relations with transporters, financial institutes, input suppliers, and research centers (like IITA). IITA is also instrumental in developing new higher yielding, and higher quality (starch content), cassava varieties.
An important topic for the strategic oversight group would be the cost structure of the value chain. So far, Nigerian Breweries has been buying cassava starch at relatively high prices, i.e., higher than comparable quantities of starch from sorghum, or corn (imported). There are just a few key elements in the cost structure of the cassava starch: the costs of producing cassava tubers; the cost to transport the tubers to Psaltry; the costs to convert the tubers into starch at the Psaltry factory; the cost to store, if needed, and deliver the starch to Nigerian Breweries; and, finally, the costs to convert the starch into maltose (or fructose, which can be used for more purposes than the maltose syrup) at Nigerian Breweries.
Francis, our partnership facilitator, was mainly focusing on the 1st part, i.e., the cost of producing the cassava. Over the past few years, 2SCALE had been able, with the extension staff of Psaltry, to increase yields from eight to nine tons per ha (per year), to almost 16 tons per year. However, on the learning plots, managed jointly by the farmers and 2SCALE, yields would easily reach 30 and to 40 tons per ha. I had asked Francis some time ago to collect data on all the costs that farmers would need to make to achieve these yields. The diagram below resumes the data for five different practices: traditional (SHF, which stands for smallholder farmer), out-grower that receives no credit, and uses less fertilizer (OG2), out-growers that received inputs (on credit), and apply higher doses of fertilizers (OG1), and two learning plot practices (LP2 slightly more intensive than the LP1r). The results clearly show the dominance of the learning plot practices. It is pretty clear that both Francis and Psaltry’s extension staff have this kind of information and calculations in mind, when evaluating performance of farmers!
However, when you look at the costs per ton of cassava (I included in this diagram also the transportation costs, even though the transportation costs per ton are the same for all practices of course), the picture changes significantly. Now the dominance of the learning plots is not that clear at all. In the diagram below, the costs of land were not taken into account, i.e., assumed zero … This of course is not correct.
Still, from both pictures, an important nuance emerges:
- When the cassava farmer is land constraint (more than cash constraint), he/ she probably has enough incentives to go for the more intensive technology. The same applies to some extent when the farmer is labor constraint, as the more intensive technologies appear to use less labor per ton of cassava than the other practices.
- When the farmer is more cash constraint, or concerned with the risks related to taking a loan, and you have enough land available, he/ she might still opt for more “extensive” technologies.
Obviously, farming systems are more complicated than just being land, labor or cash constraint; farmers make decisions for different reasons (commercial, subsistence), with different fields at their disposal, knowledge/ skills, and related endowments; they make decisions every day, as the season unfolds itself, and all these decisions are somehow related. However, the results do show us something.
They show that the proposed intensive technologies do not on all counts outcompete the less intensive, and even the traditional ones!! This did not come as a surprise to me. In fact, what would you expect from a crop – like cassava, sorghum and millet – that is more known for its resilience, than for its response curve to inputs? Conclusions:
- Don’t judge farmers too easily (preferably, don’t judge at all!), when they do not adopt “our” technology. They may face other (more important) constraints.
- Target extension messages that aim to promote more intensive technologies to those farmers that appear (listen!) to have real incentives to intensify.
- Try harder, to develop packages that improve not only the yield, but also the unit costs of production. Psaltry just received funding to introduce, through IITA, a new generation of improved cassava stems to their farmers; and though I do not believe so much in miracle crops, my Nigerian partners do. And they may be right!
- Discuss more and better, to exchange views on soil fertility management and the overall resilience of a farming system; farmers seem to prefer to clear new land, when yields are going down; new ideas may be needed to avoid expansion, and to ensure that everyone (including the Fulani that I talked about in the latest blog) can make a decent living.
Francis, who has been doing outstanding work with the cassava farmers, clearly still has some work to do.
But there is more. The production cost of cassava (tubers) constitutes between 37,5 and 45%, maybe 50%, of the price of cassava starch (depending on the conversion rate of cassava roots into starch, which currently lies between 5 to 6 kg of cassava for 1 kg of starch); the remaining costs are related to processing, delivery of starch and profits made by Psaltry. Finally, there is also a cost structure at the level of Nigerian Breweries. We agreed that it did not make sense to only address the costs at the farmers’ level, without consideration of the profits and costs made elsewhere in the core supply value chain.
It was heartening to see that also in this partnership the balance is slowly but surely shifting from seeing efficiency as mainly (and sometimes even only) a “farmers’ problem”, to seeing efficiency as a joint challenge … analyzing and identifying opportunities for efficiency gains in all segments of the core value chain (and in related supplier value chains as well).