post-harvest food processing …globalwater.osu.edu/files/agribusiness_tanzania_web.pdfthe ohio...

TheOhioStateUniversityGlobalAppliedProjectsProgram2017

POST-HARVEST FOOD PROCESSING OPPORTUNITIES AND CHALLENGES FOR RURAL SMALLHOLDER FARMERS IN TANZANIA

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AGRIBUSINESSBACKGROUND 4

U.S.ASSISTANCETOTANZANIA 4LARGESCALECOMMERCIAL 5SMALLSCALECOMMERCIAL 5VILLAGE 5

PROJECTBACKGROUND 7

AGRIBUSINESSCONSTRAINTS 9

CAPITALINVESTMENT 9PRODUCTIONFACILITY 9INFORMATIONASYMMETRY 10MIDDLEMENVALUETHEFT 10RAWSUPPLYANDQUALITY 11COMMUNITYBUY-IN 11SUSTAINABILITY 12STANDARDS,REGULATIONS,ANDLEGALITY 12

OPPORTUNITIES 14

ACCESSTOINFORMATION 14CREATELINKSBETWEENFARMERSANDPROCESSORS 14MINIMIZECOSTOFPRODUCTION 14QUALITYCONTROL 15

INSIGHTS 16

ELIMINATINGMIDDLEMEN 16POST-HARVESTGRAINLOSS 18

RECOMMENDATIONS 22

EDUCATIONINITIATIVES 22RAWPRODUCTTRANSPORTATION 24

OTHERKEYFINDINGS 26

MULTI-CROPINCOME/OFF-SEASON 26

APPENDIX 29

1ROOTCAUSESFORMIDDLEMEN 292CROPLIFECYCLE 303FOODPRODUCTIONFACILITYPERMITSANDREGULATIONS 314SUMMARYOFGROCERPRICESFORFOODPRODUCTSINTANZANIA 325MEETINGNOTES 35HAPA 35SINGIDAFRESHOILMILL 41YAZASUNFLOWEROILPROCESSING(HALISI) 43MOUNTMERUOILMILLERS 46

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MASASIFOODINDUSTRIES/LULU 49AVOMERU 51BRAZAFRIC 53GRAINPOST-HARVESTLOSSPREVENTIONAHELVETASPROJECT 55SMALLINDUSTRIESDEVELOPMENTORGANIZATION(SIDO)ARUSHAOFFICE 59UNGAWAUWELEFLOURMILL,ARUSHASIDOCOMPLEX 60SANLITAPRODUCTS,ARUSHASIDOCOMPLEX 62SWEDTANMEATPROCESSORS,ARUSHASIDOCOMPLEX 63SMALLINDUSTRIESDEVELOPMENTORGANIZATION(SIDO)DODOMAOFFICE 65BAHATI/MABIBOMARKETMEETING 66NATURALEXTRACTSINDUSTRIES 67

WORKSCITED 70

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Agribusiness Background AgricultureisTanzania’slargestindustryandthecountryisAfrica’slargestimporter.Agriculturemakesup40%ofTanzania’sgrossdomesticproductand85%ofexports.Over80%ofthepopulationworksinagricultureinsomepartofthesupplychain—asafarmerwithanimalsorcrops,atransporter,aprocessor,abuyer,oraseller.CashewnutsareTanzania’sbiggestcashcrop,followedbycoffee,tea,cotton,sisal,andcloves.Ontheimportside,industrialrawmaterials,consumergoods,machineryandtransportationequipment,andcrudeoilareallessentialimportsforTanzania’ssustainabilityinagriculture.

OneofthebiggestchallengesinmanyofTanzania’sindustriesisfightingcorruption.Thecurrentpresident,JohnMagufuli,hasmadepartofhisagendatourgeanewageofprosperitywithinTanzania.Corruptionwithinthegovernmenthasallowedsomeagribusinessestoflourishfasterthanothers.

U.S.AssistancetoTanzaniaTheUnitedStateshasplayedamajorroleinhelpingTanzaniaimproveitsstabilityandeconomy,astheyworktoimprovehealthconditions,foodsecurityandnutrition,sustainabledevelopment,andenergy.1TheUnitedStateshasalsoestablishededucationalprogramsthatencourageTanzanianstobecomemoreeducatedanddeveloptheirtalentssuchastheFulbrightProgram,HubertHumphreyFellowship,andYoungAfricanLeadersInitiative.2Theseprogramshelptoprovideopportunitiesforeducation,avitalstartingpointforimprovingtheconditionsinTanzania.

Traditionally,Tanzaniahasbeenabigexporterofconsumergoodsandagriculturalrawmaterials,andanimporterofprocessedgoods.ToestablishamorestableeconomyinTanzania,thecountryneedshelptocontinuetodevelopmoreefficientandmoderntechnologiestohelptheirfarmersandlocaltradesmenproducehigherqualityandquantityofgoodsforusewithinTanzania.ByemployingmoreTanzaniansintheagriculturalprocessandproducinggoodstobesoldwithinTanzania,inhabitantsofruralvillageswillbebetterequippedtoservetheircommunities.PertheU.S.DepartmentofState,“TanzaniaiseligibleforpreferentialtradebenefitsundertheAfricanGrowthandOpportunityAct.TheUnitedStateshasaTradeandInvestmentFrameworkAgreementwitharegionalorganizationtowhichTanzaniabelongs–theEastAfricanCommunity.”3

1"U.S.RelationswithTanzania."U.S.DepartmentofState.U.S.DepartmentofState,01Nov.2016.Web.

2Ibid.

3Ibid.

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Large-ScaleCommercialLarge-scalefoodprocessingfacilitiesinTanzaniaarenotplentiful.Thefacilitiesthathavegrowntosuchascaledonotnecessarilyhavesimilar-scalecompetitors.Large-scaleprocessorshavedominatedthesupermarketsandhavethemostaccesstocustomersandfarmers.Theirnetworksmakethempowerhouses,anditisdifficultforsmall-scalecommercialfacilitiestocompetewiththem.Oftenwhatmakeslarge-scalecommercialprocessorssosuccessfulandvastisthattheyarepartofalargerconglomerate,likeMt.Meru,thatownsgasstationsandtransportationfleets,amongotherbusinesses.Theirscaleprovidesthemwithfinancialstabilitythatwouldotherwisebeachallengeforsmall-scaleorvillage-levelenterprises.

Small-ScaleCommercialSmallerprocessingenterprisesoftenhaveamorepersonalconnectionwithfarmers,asbothpartiessignificantlydependoneachotherforsuccessandprofitability.Ruralfarmersoftengrowmorethanonecroptorotatetheirsoilaswellasextractasmuchincomeaspossiblefromvariousbuyers.Oftensmall-scalefacilitieswillalsobuyasecondarycroptosupplementtheirbusiness’incomeduringtimesoftheyearwhentheirmainproductisnotaswidelyavailable.Forexample,avanillaextractproducermaybuyasmuchvanillaasisavailable,andturntocoffeebeansduringtheoff-seasonforextraction.Small-scalefacilitieswillalsobuyseedsforfarmerstoplantandthenbuytheircropfromtheminacycle.Ithasnotbeencommonforthesmallprocessingfacilitiestoowntheirownlandforfarming,butsomehavefuturegoalstoexpandwiththatcapability.

VillageRuralvillagesinTanzaniadonothaveprominentprocessingfacilitieswithintentionsofsellingoutsideofthecommunity.Village-scaleprocessingdoesnotshowsignificantsignsofsuccess,asmanycommunitiesdonothavetheresourcestosustainoperations.Amajordrawbackforvillagesislackofeducationandknowledgeaboutmachineryorprocessing.Oftenavillageprocessingfacilitywillshutdownbecausethereisnoonetotendtobrokenmachineryorcontinuethedailytasks.

Commonchoicesforvillage-scaleprocessingaremilkanddairyproducts,especiallyinMaasaicommunities.Othersmaytrytoextractrawmaterialfromvanilla,coffee,orsunflowers,buttheydonothavethecapabilitytooperateonasteadybasis.

Amorecommonagriculturalpracticeinvillagesisfarmingforsmall-andlarge-scaleprocessingfacilities.Eventhoughpropertyownershipiscomplicatedbasedonregionandtraditions,manyvillagershaveaccesstoavastamountoflandtogrowcropsandraiselivestock.Tanzanianfarmersoftenraisecattle,chickens,goats,anddonkeystosustaintheirfamiliesandcommunities.Inaddition,dependingontheregionofTanzania,Farmerswillgrowsunflowers(Singida),vanillabeans,coffeebeans,avocados,bananas,wheat,andmaize.Oftenthecropsareusedasshadetreesforothercropstogrowandarenotaprimarycrop.Thisisawindowof

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opportunityforbothfarmersandprocessorstoutilizethesesecondarycropsandturnthemintomoreprofit.

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Project Background TheGlobalWaterInstitute’s(GWI)SustainableVillageWaterSystemsProgramisamulti-facetedinitiativeaimedatmakingmeasurable,far-reachingprogresstowardwaterandfoodsecurityinTanzania.4Toensurethesuccessandsustainabilityofsuchsystems,regionaleconomicactivitiesmustbecultivatedtodrivedevelopmentandsustainincome-generatingactivitiesamongruralcommunities.

Historically,opportunitiesforsustainingwells,healtheducation,andaccesstocleanwaterhavebeenthwartedbecauseoflackofeducationandincomeinTanzania.Tohavemoresuccessfulsustainablevillagewatersystems,GWIrealizesthepotentialforadditionalprojectsthatcanimpactthelivesofTanzanians.ByconsideringwaystoincreasetheincomeofTanzanians,GWIforeseesthepotentialtocapitalizeontheresourcesthatarealreadysoprevalentinthecountry.

Tanzaniahasstruggledwithcreatingincomeforitsinhabitants.Becauseagricultureisasignificantpartofthecountry’seconomicandsocialstructure,thereareseveralopportunitiesthatareavailabletobetterutilizeTanzania’sresources.WithagricultureasafocalpointinTanzania,theteamwastaskedwithresearchingandunderstandingtheviabilityoffoodprocessinginruralvillages.Inaddition,itwasimportanttocreateanetworkofcontactstoestablishaconnectionwithintheTanzanianagriculturalindustry.Beforethein-countryresearchandobservations,theteamtookstepstounderstanddifferentscalesandtransferabilityoffoodprocessingbetweenproductsaswellasthefundamentalresourcesneededforsustainability.

TheteamvisitedtheOhioStateUniversityCollegeofFood,Agricultural,andEnvironmentalSciences’foodprocessingfacilitytogainabetterunderstandingoftheprocesses.Whilethisfacilitywasmuchmoreadvancedthanwhatavillagecouldpossiblysustain,itwashelpfultoseehowtheirfacilityoperates.Theteamusedthisexperiencetounderstandwhattypeoftechnologiesmightbenecessaryforsustainabilityin-country.

4GlobalWaterInstitute.TheFranchiseModel.http://globalwater.osu.edu/files/OSU-Tanzania-Project-Franchise-model-concept-paper-4.2-forweb-ENGLISH.pdf

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Approach Afterourinitialunderstandingofthetaskofanalyzingfoodprocessingbusinessmodelsthatwouldbeviableoptionsforacollectionofsmallholderfarmerstoincreasetheirpersonalincome,webeganwithsecondaryresearch.Thisresearchcamefromseveralsources:NGOwebsites,Tanzanianeconomicreports,scholarlyarticles,andnewsarticles.Throughthisearlyresearch,webegantodevelopanunderstandingoftheTanzanianeconomy,specificallytheagriculturalindustry.Also,westartedtodeterminethechallengesfacedindifferentstagesofagriculturalproduction,organizationsandbusinessmodelsthathavefailedovertheyearsandwhy,andcompaniesthathaveremainedsuccessfulovertime.

ThissecondaryresearchwasadequatetogetabasicunderstandingofagriculturalbusinessmodelscurrentlyinoperationthroughoutTanzania,butwaslimitedtospecificregions.OurnextstepwastoconductinterviewswithcontactsinTanzaniaviatelephoneandSkypetocross-referencetheinformationwehadobtained.Thiswasakeysteptofurtherdeepenourknowledgeofbusinessmodelsandpainpoints.Fromtheseinterviews,wewerebetterabletoassesspotentialin-countryvisitsthatwouldprovidefurtherbenefittoourresearchandendrecommendation.

Fromourcontacts,wescheduledin-countrymeetingsandfacilitysitevisits,andexploredpotentialfuturemeetingoptionsonceweestablishedourpresenceinTanzania.Fromthesemeetings,wewerebetterabletoevaluateattributesofsuccessfulorganizationsandtheirtruebenefittosmallholderfarmers.Thetruebenefitoftheseinpersonmeetingswasthefirst-handknowledgewegainedindeterminingthelimitedtransferabilityofadequateproductionfacilitiestothesmallvillagelevel.

Thefinalstepinourprocesswastospendtimeinsmallvillagestogainabetterunderstandingofvillage-levelsocietyinordertobetterofferrealisticrecommendations.Comparingwhatwehadlearnedaboutpotentialagribusinessmodelsandthenassessingtheirviabilityfromavillage-levelperspectiveallowedustobetterunderstandthedifficultyinprovidingeffectivefoodprocessingcapabilitiestoruralvillagesthroughoutTanzania.

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Agribusiness Constraints CapitalInvestmentAmajorconstraintthatacollectionofsmallholderfarmerswouldhavewhenattemptingtodevelopaprocessingfacilitytointegrateforwardandretainmorevaluefromtheircropswouldbetheinitialcapitalinvestmentrequiredtoconstructafacility.ThisfinancialconstraintisexacerbatedwhentryingtoconstructafacilitythatmeetstheTanzaniannationalstandardsandregulationsthatwouldallowforpackagedfoodproductscapableoflegalsaleanddistributionthroughoutTanzaniaandtheexportmarkets.Wehavelearned,throughwordofmouth,ofsmallgroupsoffarmersthatsharesmall-scaleprocessingequipment,suchasamanualoilpressorgrainmiller,butthisequipmentisnotcapableofproducingsubstantialvolumesofproductsandisoftenjustforindividualhomeuse.Furthermore,iffarmersareusingsomeequipmenttofurtherprocesstheircropsforsale,itcanonlybesoldortradedatlocal,unregulatedmarketssincetheirproductsarenotbrandedorregisteredwiththeTanzanianFoodandDrugAuthority.

Inmeetingwithprivatelyheldcompaniesandsocialenterprises,initialfinancialinvestmenthasbeenatopicthatmostbelievetobeapreventativefactortosmallholderfarmers.Forexample,arepresentativefromNaturalExtractsIndustriesstatedthattheircapitalinvestmentcamefromvariousforeignaidgroups,andtheycontinuouslytrytoreceivefurtherfundingmoneysincetheyarecurrentlynotprofitable.However,theywereonlyabletoobtainthisfundingduetotheiroverallsocialmissionofincreasedwealthforindividualfarmers.OnecountertothisforeignaidnecessityisYazaSunflowerOil,wherethefounder,Yusef,investedhisownpersonalsavings,obtainedprivateloansfromTanzanianbanks,andsoughtoutadditionaldomesticinvestors.Withsmallholderfarmersalreadyinacontinuousstrugglewithpersonalcashflow,theabilityforthemtoobtaincapitalinvestmenttofurtherrefinetheirproductstoretainmorevalueisseverelylimiting.

OneorganizationthatclaimstheyassistwithprovidingfinancingoptionsforsmallholderfarmersthatwewereunabletomeetwithisTechnoServe5.ThisorganizationprovidesanopportunityforGWItolearnmoreaboutthesystemsandrisksinvolvedwithsmallholderfinancingthatcouldproducethecapitalneededforafunctioningprocessingfacility.

ProductionFacilityInadditiontothedifficultyofsecuringthesubstantialcapitalinvestmentneededtoestablishanyprocessingfacility,thereisalsotheconstraintofobtainingadequateequipmentneededforproperstorageandproduction.Furthermore,thecontinuedstruggletoimplementreliablewatersystemsandelectricityimposeslimitationsacrossthecountry,evenwithrecentsubstantialimprovementsbythegovernment.Toproducesalesvolumesnecessaryfor 5"RaisingCapital."TechnoServe-BusinessSolutionstoPoverty.N.p.,n.d.Web.

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profitability,theneedforautomatedprocessinginsteadofmanualequipmentisanecessity,especiallyforlegalcommercialsale.

InformationAsymmetryAnareaofimportantinteresttotheGAPteamwasthelackofinformationthatthesmallholderfarmershaveinregardstoselling,pricing,andmodernfarmpractices.Fromourvillage-levelinteraction,welearnedthatprovidingadequateinformationtofarmersatthevillagelevelseemstobeaneasyandcosteffectivemeansforvalueretentionattheindividuallevel.Ourtwo-dayvillagevisittoOrkesumetandTerratwithLukasprovidedinsightsthatthefarmerswithintheseareasdonotknowcurrentpricingfortheircropsatmajorcitymarketsnorhavethepersonalmeanstotransporttheircrops.Eventhoughcurrentagriculturalproductpricingcanbefoundthroughmobileapplications,suchasM-Farm6orHabariMazao7,mostTanzanianfarmersdonotusetheseresourcesandremainunawareoftheaccuratemarketvalueoftheiragriculturalproducts.

Disseminatingaccurateinformationatthevillagelevelisafirst-stepapproachtoensurethatsmallholderfarmersreceivefairvaluefortheiragriculturalproducts.Lukasiscurrentlyworkingonacommunityradio,thatiscurrentlyinusethroughoutotherregionsinTanzania,toeducatefarmers,whichseemslikeaviableopportunitytoreachalargenumberofcitizenswithminimalinvestment.Furthermore,communityradioonlyrequiresssimpleradio,whichmostcitizenswhoutilizesolaralreadyown,perindividualfarmer.

AnotheropportunitythattheGAPteamaskedaboutwaspostingacommunitybulletinboard,whichcouldbeeasilyseenbyahighpercentageofcitizensatlocalchurches.Atthevillageswevisited,nosuchsystemiscurrentlyinuse,butwasregardedasapotentiallygoodidea.Wewereunabletodecipherwhyacommunitybulletinboardwasnotinuse,butthismaybeanothersimplesolutionforinformationdissemination.

MiddlemenandValueTheftThelackofknowledgeamongsmallholderfarmersandtheirinabilitytotransportagriculturalgoodsoverlongdistanceshascreatedtheopportunityformiddlementoenterthemarketandtakevalueawayfromindividualfarmers.Whilethepresenceofmiddlemenissomewhatillegal,especiallywhentheypurchasecropsfromfarmersthatreceivedsubsidizedseedlingsandtrainingfromotherproducers,itiscurrentlytoodifficulttoregulatetheirexistenceacrossTanzania.

Thesemiddlemenoftencomewithlargetrucksrightaftertheharvest,promisingtopaycurrentmarketprices,whichisrarelythetruth.Often,atthepointofharvest,farmersarealready 6"M-Farm."M-FarmLtd.N.p.,n.d.Web.

7Mason,Ben."HabariMazao?SmallholderFarmersinTanzania."BetterplaceLab.N.p.,n.d.Web.

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cash-constrainedandwilltakeanypricethatamiddlemanoffersjusttohavealittlemoneytosurvive.Throughinformationgainedfromseveralinterviews,thereisalsoahighpercentageoffarmerswhoselltomiddlemenrightafterharvestwhenpricesarethelowestsincethatiswhattheyhavealwaystraditionallydone.

NaturalExtractsIndustriesandYazaSunflowerOiltrytomitigatethevaluetheftofmiddlemenbyofferingseveralcollectionpointsthroughouttheirfarmerareassothatnofarmermusttravelfartoselltheircrops.Furthermore,thesecompaniespaycashatpointofpurchase,sothereisnolagtimebetweentransferofgoodsandpayment.Beingaccessibletofarmersandprovidingimmediate,fairpaymentseemstobetheonlywaytoreducethethreatofmiddlemen,butevenwiththesecompanyinitiatives,thepresenceofmiddlemenisextensiveincertainremoteareasandamongcertaincropharvestcycles.

RawSupplyandQualityAkeytakeawayfrommeetingswiththeSunflowerOilProducersinSingida;Yaza,SingidaFresh,andMountMeru,wasthatthereiscurrentlynotenoughsupplyofrawagriculturalproductstomeetdemand.Withseveralproducersattemptingtobuytherawproductfromalimitednumberoffarmers,manyareonlyabletooperatetheirfacilitiesandproduceoilforpartoftheyear.Furthermore,thelowqualityofthesupplyavailableisaconstantissue.Thisqualityissuehascausedmanyproducerstodevelopfieldteamsandsupplyfreshseedstofarmersannuallytoensurequality.

SupplyconstraintswerealsoamajorissueforNaturalExtractsIndustriesastheyarecurrentlyonlycapableofmeeting10%oftheircurrentvanillaextractdemand.Withsupplyconstraintslimitingtheirprofitability,NaturalExtractsbelievesthatbeingabletogrowtheirfarmernetworkexponentiallyistheonlywaytomatchsupplywithdemandandbegintobecomeprofitableandsustainable.

Fieldmonitorteamsorfieldagentsareagrowingtrendamongagribusinesscompaniestoensureaconsistentqualityproduct.Also,assomecompaniesattempttomarkettheirproductsas“natural”or“organic,”themonitoringoftheirfarmers’practicesisessentialtomeetinternationalstandards8.Thisisespeciallyimportantforcompanieslookingtoexporttheirproducts.

CommunityBuy-InWhenaddressingsmall-scale,village-levelprocessingcapabilities,thepoliticalandsocialdynamicsarecomplexandneedtobefullyunderstoodbeforeanymajorprojectcanbeundertaken.WelearnedfromGWIaboutwaterprojectsthatwererejectedbyvillagessince

8"TheIFOAMNormsforOrganicProductionandProcessing."IFOAM(2014):n.pag.Web.

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theyinterferedwiththesocialcharacteristicsofthevillage,whichisathreattoanyprojectatthevillagelevel.

Severaldifferent“groups”existwithineachvillage.DuringourtimevisitingOrkesumetandTerrat,wehadtomeetwithlocaldistrictgovernment,villageelders,regionalpastors,andthelocalwomen’sgroupstomakethemawareofourpresenceintheircommunityaswellasinformthemofthepurposeforourvisit.Eachofthesegroupsseemedtohavedifferentissuesintheirvillagethattheyviewedaspriorities,whichhadthepotentialtocreateconflictinggoals.Balancingtheseculturaldynamicsisacomplicatedprocessandsomethingthatrequirescontinuedinteractionwiththecommunitytobecomefullyimmersedintheirthinkingandgoals.Havingalocalvillagerwhohasexperiencearticulatingthelocalrelationshipstoforeigngroupswouldbeidealasmostvillagerscannotdescribetheirregionalcomplexityinamannerthatcanbeeasilyunderstoodbywesterners.

SustainabilityForanagribusinesstobesustainable,itmustbeefficientandprofitable,whichfromourinteractionisdifficultforTanzaniancompanies.Withmanybusinessesoperatingassocialenterprises,foreignaidisoftenthesourceoftheiroperatingbudgets,andprofitabilityisstillyearsaway.Thesesocialenterprisesmustcontinuouslyapplyforfundingthroughvariousforeignorganizationsorriskcollapseoftheiroperations.

Forexample,NaturalExtractsIndustriesstatedthattheywerecurrentlynotprofitableandneedadditionalfundingtoproducethegrowthnecessarytoreachprofitability.MountMeruSunflowerOil,aprivatecompany,iscurrentlynotgeneratingenoughrevenuetocovertheiroperatingcosts.Withoutprofitability,theseorganizationscollapsewhenforeignorgovernmentalfundingisexhausted.

Developingabusinessmodelfrominceptionbasedonprivateinvestmentorthathasapre-setexitstrategyfromforeignfundinggivesthegreatestchanceofsustainability.Byworkingwithorganizationsfocusedonimprovingavailabilityofprivatebanksloans,suchastheAfricanFoundationforDevelopment9,Tanzaniancitizenswillhaveincreasedaccesstoprivatefinancingandthusgreaterincentiveforsuccessandprofitability.

Standards,Regulations,andLegalityAnothermajorconstraintthatneedstobeaddressedisthelegalaspectsindealingwiththeproductionandsaleofprocessedagriculturalproducts.TherearenumerousgovernmentorganizationssuchastheTanzanianFoodandDrugAuthority10forproductregistrationand

9"AboutUs."AfricanFoundationforDevelopment.N.p.,n.d.Web.10"TFDA."TanzaniaFoodandDrugsAuthority.N.p.,n.d.Web.

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productionpermits,OSHA11forproductionfacilitysafetyinspectionsandpermits,andTanzanianRevenueAuthority12fortaxcollection.Organizationsmusteitheremployaknowledgeablemanagerorhireconsultantswhoarefamiliarwiththesenationalstandardstopreventfinesandshut-downs.

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"OSHA."OccupationalSafetyandHealthAuthority.N.p.,n.d.Web.12TanzaniaRevenueAuthority,http://www.tra.go.tz/

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Opportunities AccesstoInformationOneofthemainissuesinruralvillagesforsmallfarmersishavingtherightinformationandaccessibility.Lackofinformationhasledtothelossofvaluecaptureforfarmersinthecurrentvaluechain.Byraisingawarenessaboutwaystoincreasefarmers’incomes,theycanbebetterpreparedtoselltheircropsintherightmarket.Itisimportantforfarmerstohaveupdatedandusefulinformationfordifferentstagesofcroplife,pluspost-harvesttipsandmarketpricesforlocalcropsintheregionandnearbyareas.Forfarmerstoreceivetherightinformation,thereneedtobeaccessiblechannels.Someofthosechannelsthatwerefoundinvillagesarepublicplaces,radio,andcommunityleaders.Withinpublicspaces,churchbulletinboardsandcommunityspacescanbeaplacewherelargegroupsofvillagerscangaininformationandbeeducatedontechnology,agriculture,andothernewsworthyannouncements.Radiostationsallowcommunitiestobroadcastcontenttosurroundingcommunitieswithimmediateaccessanddeliverinformationthatcanbebeneficialformorethanjustonegroupofpeople.Theycanoffereducationalbriefings,marketpricing,andotheropportunitiesforincome.Finally,acommunityleadercanbeakeyinfluencerinthevillagewiththeadvantageofawidenetworkacrossothervillages,aswellasafoundationoftrustamonglocalcommunitymembers.CreateLinksBetweenFarmersandProcessorsThelong-establishednetworkandknackofmiddlemeninthemarkethasbeenthebarrierforbothsides—farmersandfoodprocessors—tocapturevalue.Somefoodprocessors,likesunfloweroilproducersinSingida,haveputtheireffortsintolaunchingcontractfarmingschemestoensurestableaccesstohighqualityfeedstocks.Theyarelookingforasolutiontogetenoughqualitysourcesfortheirinput,andtobelessdependentontheseasonalityofcropsaswellasthepricemanipulationofmiddlemen.AnotheroftheireffortsistoinvestinbuyinglandandestablishingtheirownfarmsusingselectedseedsandgrowingmethodsthatmeetISOstandards.However,thisinitiativewouldhelpthemmeetjustpartoftheirsupply.Toexpandproductionandreach100%capacity,theywouldneedtoestablishsupplyrelationshipswithseveralbigfarmersacrosstheregion.Therefore,buildingtrustandsettingupstablelinksbetweenfarmsandfactorieswillbethesustainablesolutionforbothfarmersandfoodprocessors.MinimizeCostofProductionThelowincomelevelofmassconsumersinTanzaniaisthekeybarriertotheirspendingmoneyonprocessedfoodproducts.However,thecostofproductionatsmallandmediumfoodprocessors,whichincludeimportedpackagingmaterials,lowmachineutility,floatingpricesofrawmaterialsduetoseasonality,andmiddle-manissues,keepsthemfromloweringpricestoalevelthatmassconsumerscanafford.Soon,foodprocessorsplantoimplementcost-saving

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projects:forexample,Masasiwhoisworkingonanewtomatosauceformulaorcheaperbottlepackagingtointroducelow-costproducts,orYaza’seffortstoprovidequalityseedsandtrainingforfarmersaroundtheirfactorytostabilizesourcing.QualityControlAmongtomatoprocessors,therearetwoleadingcompaniesthatareintheprocessofobtainingISO22000certificationfortheirproductsasthetickettoexporttoneighboringcountries:DarshIndustriesandMasasiFoodIndustries.Doingbusinesswithinthedomesticmarketseemstobemucheasierformostfoodprocessors,whoseproductshavenotbeentestedorqualifiedbyprofessionalorganizationssuchasTBSorISO.However,theexportmarketisapromisingopportunitythatwouldpotentiallyofferhigherprofitability.Long-termplanningacrossthefoodprocessor’svaluechaintiedtothestrictstandardsforfoodindustriesisthecriticalfactortoensurequalitycontrolofthefinalproducts.

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Insights EliminatingMiddlemenGWIwalkedtheGAPteamthroughtheprocessthatbrokersormiddlemenusetocaptureanunfairamountofvaluewithintheagriculturalvaluechainduringourfirstmeeting.Whilein-country,wefoundthateveryoneweasked—includingfarmers,foodprocessors,governmentofficials,andneutral3rdparties—agreedthatmiddlemencaptureanunfortunateamountofvalue,andthisishinderingthedevelopmentoftheTanzanianagribusinesssector.IntheUS,distributorsachievesingle-digitprofitmarginsastheyinteractbetweenproducers,manufacturers,importers,andretailers.Intheagriculturalsector,cooperativeshavebeentheprimaryenablingentityensuringthatfarmersreceiveahigherportionofthevalueoftheircropsthantheirTanzaniancounterparts.Unfortunately,inEastAfrica,cooperativeshavebeenanabjectfailure.Althoughtheyexist,theyonlyexistinthepresenceofanexternalforcingfunction,bethataNGO,buyer,orgovernmentbody,andtheyalwayscollapseoncetheexternalentityseparatesitselffromthecooperative.RogerBird,founderofCoolCapFund,toldusthatiftheteamfoundacooperativeinTanzaniathatfunctionedwithoutanexternalmandate,theGAPteamwouldneedtostayinthatlocationandstudythegovernanceofthecooperative,becausewewouldallwinaNobelPrize.

GiventhetotalfailureofcooperativesinTanzania,anothersolutionisneededforsmallfarmerstocombatthepowerofmiddlemen.GWIproposedthattheGAPteamreviewthefeasibilityofsmallfarmersbeingprovidedsmallfoodprocessingequipmenttogaintheupperhandagainstmiddlemen,butthisproposalisoverlycomplicated,likelytofailforreasonsaddressedinothersectionsofthispaper,expensive,willbeslowtoscale,exacerbatesthealready-lowutilizationofTanzanianindustry,anddoesnotaddressrootcausereasonsforfarmersinteractingwithmiddlemen.BothNinaNchimbi(RegionalManager,ArushaSIDO)andLugendoMsegu(ProgramManager,GrainPost-HarvestLossPreventionProject(GPLP))agreedtothreerootcauseswhyfarmersselltomiddlemenandwalkedtheGAPteamthroughstrategiesthathaveproventoworkinhelpingfarmersflipthebalanceofpowerintheirfavor.(Appendix1a)

Thefirstrootcauseoffarmerssellingtomiddlemenisbullyingandintimidation,whichwilllikelybethemostdifficultrootcausetosolve,butalsoappearstobetheleastprevalent.Incertainregions,thefarmers,thankstotheexplosionofmobilephones,havemarketknowledgeofwhat100kgbagsofgrainsellforinlargemarketsoratprocessorsites.Furthermore,theycantransportgraintomarketsthemselves,albeitslowlyandinsmallquantities.Therefore,theyareunlikelytoselltomiddlemenatdepressedprices.Thishasforcedsomemiddlemenoutofthebusiness,butothershavechosentoseekoutfarmersatnightandthreatenthemtoscarethemintosellingtheirharvests,likehowthemafiaintheUSwouldgetsomeonetopaybackdebtsiftheywerebehind.Unfortunately,prosecutionistheonlysolutiontothis,whichthepoliceseemdisinterestedorincapableofdoing.Neighborhoodwatchescoulddiscourage

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middlemenfromenteringtownsandfarmers’homes,whileensuringfamilieshaveaccesstomobilephoneswithcamerascouldallowthemtocapturefacesorlicenseplateandvehicleinformationfromoffenders.

Thesecondrootcauseoffarmerssellingtomiddlemenissimplepragmatism.Farmerswanttosendtheirchildrentoschoolwhichcostsmoney,familymembersgetsickwhichcostsmoney,thingsbreakwhichcostsmoney,etc.Nofarmerwillforgomeetinganimmediatefamilyneediftheyhaveharvestedcropsavailableforsaleregardlessofwhattheythinkaboutmiddlemenorfutureneeds.Fortunately,Helvetashaspioneeredascalabletechniquetoovercomethesesimpledifficulties:partneringmicro-financeinstitutionswithfarmerstomeettheirimmediatecashflowneeds,whiletheharvestislockedinstoragetobesoldwhenpricesrise.Thisiseffectivelyanextremelyuniquetakeonfirstworldwarehousereceiptsystems(WRS).

Herearethestepsintheprocess:

1. Thefarmerharveststheircrop.

2. Thefarmertakestheirharvesttothemicro-financeWRScontrolpoint.

3. Thefarmerandthemicro-financeagentlocktheharvestinthecontrolpoint.Theyuseadouble-lockcontainersothatboththefarmerandthemicro-financeinstitutemustagreeonthetimeofsale.Thestoragecontainerneedstobeairtighttopreservetheharvest,whetherthatisviaPICSbagsoranairtightmetalsilo.

4. Themicro-financeagentpaysthefarmerfortheharvestatcurrentprices.Thispaymentbecometheprincipalvalueoftheloan.Contractsigned.

5. Pricesriseastheharvestconcludesandfoodprocessorsneedmoresuppliestomaintainoptimalutilization.

6. Thefarmerandthemicro-financeinstituteagreetoselltheharvestwhenpricesarehigh.

7. Thefarmerrepaystheirloanprincipalandaccruedinterest(usually20%to22%)tothemicro-financeinstitute,whilethefarmermaintainstheremainingmoney(usually50%to100%oftheloanprincipleamount).

8. Thefarmerprovidesabetterlifestylefortheirfamily.

Helvetasstatedthatsigningfarmersupforthissystemwasnotaproblem,andthismodeldoeshaveancillarybenefitsthatareworthwhile.Firstandforemost,thereisnobetterteacherthanexperience.Thismodeleducatesmoreindividualsmorequicklyonhowmicro-financeandformallendingprocessesworkthananyradioprogramorschoolinstructioncan.Asfarmersgaincomfortabilitywithmicro-financeprocessesandprocedures,theywillhaveincreased

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likelihoodofseekingoutmicro-loansforotherneedsorwants,whichwillfurtherincreasethestandardoflivingofruralhouseholds.Secondly,thisprovidesthescaleneededformicro-financeinstitutionstoexpandintovillagesthatformerlydidnothavetheloandemandtosupportamicro-financeoffice.Byaddingscalethroughharvestloans,othertypesofcreditwillopentoruralvillages.Lastly,theharvestloansystemwillbemostprevalentinonlyacoupleofmonthseachyear.Aftertheagentsrecoverfromthepeakperiodtheywillneedsomethingtodotoincreaseloanvolume,hitperformancetargets,andgetpromotedwithintheorganization.Theonlyoptionavailabletothemwouldbetoworkwithinthevillagetoincreasesmallbusinessloansandincreasethevolumeofotherproducts,whichwillresultinahigherstandardoflivingfortheresidentsofthevillage.

Post-HarvestGrainLossAsignificantissueaffectingruralfarmersisthelossofgrainpost-harvest(note:forthepurposesofthissectionsunflowerseedswillbeconsideredagrain,becausesunflowerfarmersexperiencethesameissuesasgrainfarmers).Estimatesonthetotalharvestlostduringactivitiesaftertheharvestbutpriortothedeliverytofoodprocessorsvarywidelyduetodifferencesinthecropsbeinganalyzedandtheregionsandyearsinwhichmeasurementswerecaptured,however,allestimatesgenerallyrangefrom15%to40%ofthetotalsmallfarmerharvestbeinglostpost-harvest.Ifruralfarmerscouldbetaughttechniquestoreducetheirpostharvestlossfrom30%to15%,thiswouldincreasethevalueoftheirharvestsbymorethan20%.

Therearemanycausesforthelossofgrainpost-harvest.Thefollowingisasummaryofcausesofloss:

• Manualprocessesarecommon;evenanimalpowerisnotused.Handprocessingcausesmorelossthanmechanicalprocessing.Example:removingcornkernelsfromthecornear.

• Delayedharvestcausesloss.

• Transportationinwoodencartscreateslossasgrainsfalloutofthecartoverthesideorthroughholesbetweenboards.

• Dryingafterharvestisnot100%efficientasitiscompletedontheground.Animalseatit,kidsrunthroughit,anditblowsaway,causingloss.TheGAPteamwitnessedeachofthese,althoughwewerenotabletocapturepictures.

Picture1:Sunflowerseeddryingwithalotoffthetarp.

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• Localgranariesdonotpreservergrainwell.Pestsandfunguscauselossasdoestheweightofgrainsstoredatthetopofthestoragecontainerpressingonthegrainatthebottom.

• Chemicalssuchasaceticacid,commonlyusedtohelppreservegrain,areappliedincorrectly,causingloss.Dosagesandapplicationtechniquesarefrequentlyincorrect.Forexample,aceticacidneedstobereappliedafterthreemonthsandalmostneveris.

Inmostcasesthecauseoflossiseithernottangibletofarmersoriscausedbysomethingthatfarmersdon’tknowhowtoavoid.Thisisduallythechallengeandopportunitythattrainingandresourcingfarmersonpost-harvestlosspresents.

TheGrainPost-harvestLossPrevention(GPLP)project,aHelvetasproject,istheonlyknownmajorinitiativeinTanzaniatoattempttotacklereducingpost-harvestlossinTanzania.Thepilotwasstartedin2013anddeemedsuccessfulin2014,allowingGPLPtoproceedwiththeirPhaseIprojectbeginninginNovember2014.PhaseI’sexpectedconclusionisOctober2017.PhaseItakesplaceinfourregions:Dodoma,Manyara,Morogoro,andShinyanga.Eachregionhastwofocusdistrictsandeachdistricthasninefocuswards.InPhaseI,GPLPhadthreeobjectives:

1. Increasestoragecapacityofsmallfarmers.

2. Ensuremarket-basedstoragesolutionsareimplemented.

3. Showcaseimprovementinpost-harvestpoliciesandoutcomes.

Implementationofthedeliveryofsolutionsand/oractivitiesthatwouldpositivelyimpactthethreeoutcomesoccurredinfive“clusters.”Eachclusterisessentiallyasetofrelatedactivitiesinfluencingspecificstakeholdersatspecifictimesoftheproject’sdelivery.Belowisasummaryofthefiveclusters:

Coordination and advocacy through multi-stakeholder platforms.Ensuredpartnersateachlevelofgovernmentwereinformedandsignedoffonwhattheprojectwasdoingandwhoitwasimpacting.

Awareness raising, communication, and farmers training.Targetedspecificallyatthefarmersandstakeholderswhocouldandwouldinfluencetheactivitiesoffarmersinawaythatbenefitedfarmers.Theinformationblitzusedprintedmedia,radio,townpartieswithexhibitionsand/orspeakers,andcarswithloudspeakerstoeducationpeopleinthetargetedvillages.Averyimportantpointisthatgenerallythetrainingofferedisnotimplementedduringtheseasonthatitisprovidedtothearea,butitgenerallyisimplementedbythelocalfarmersduringthefollowingseason.

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Manufacturing of quality silos and other Post Harvest Technologies (PHT). Thefundamentalpushwastogetfarmerstousehermiticstoragetechnologiesthatcankeepdamagefrominsectsandfungustoaminimum.Therewerethreetechnologiespushedasapartofthiscluster:

PurdueImprovedCropStorageBags–doublenylonbagswithZiploc-likesealsthatpreventexternaloxygenfrominteractingwithgraininsidethebag.Thesebagsgenerallylastforthreeseasonsandarenotresistanttoanimalslikemiceordogs.PPTLinTangaandAgrosideinArushaarethevendorsGPLPused,buttheGAPteamsawthemattheTFAstoreinArusha.TheTFAquotedapriceof5000tshperbag,butstatedtheywouldgiveaquantitydiscount.Thepolypropylenebagsgenerallyusedwerefoundtocostbetween1000tshto1500tshduringmarketvisits.

GPLP-designedmetalsilos–Thesesiloscanlastfor20years,andGPLPhasdesignsfor250kg,500kg,1000kgand2000kgversions.Thesesilosarenotcentrallyproduced,astheydenteasily,butGPLPcouldeasilytrainlocaltinsmithsintheirfabrication.Thishadtheaddedbenefitofencouragingdevelopmentofartisantradesinsmallvillagesandresultedinmoremoneystayingwithinthevillageratherthangoingoutsidethedistrictorevenoverseas.

Blueplasticbarrels–TheseairtightplasticbarrelscanbeseeninmuchofGPLP’smarketingmaterial,andwereintendedtobeanintermediatestepfromPICSbagstometalsilos.However,theynevertook,andthefewthatwerehandedoutthefarmerswerequicklyconvertedtouseforwaterratherthanforgrain.Wedonotrecommendtryingtoimplementthesebarrels.

Access to financial services to buy/produce PHTs.UsuallyfarmersstartoutusingPICSbagsduetocostconsiderations,butasincomesriseandmicro-financebecomesincreasinglyavailable,farmersupgradetometalsilos.Accesstofinancialservicesalsoappliestothetinsmithswhowillneedaccesstoworkingcapitalfromthetimethesiloisordereduntilitisdeliveredandpaymentmade.

Picture3:ThreeGAPteammemberswithLugendoMseguanda250kgmetalsilo.

Picture2:PICSbagsforsaleintheArushaTFA.

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Action research, monitoring and learning.GPLPactivelyhadaprojectofficerresponsibleforcapturinglessonslearned,andtheyhadathirdpartyconductingauditsofpriorprojectsitestoensureinternalbiaseswerenotaffectingthecaptureanddocumentationoflessonslearnedandbestpractices.

TheoutcomesoftheGPLPprojectwereextraordinary.Foratotalinvestmentof$4.24M,215trainersandchampionfarmerstrainedover30,000farmersonimprovedpost-harvestmanagementtechniques.Aphenomenal92%oftrainedfarmerseventuallyadoptedimprovedpracticescausing25,000PICSbagsandmorethan1,000metalsilostobepurchasedlessthan25monthsafterthestartofPhaseI.Thedemandgeneratedbythe1,000metalsilosresultedin81localartisansreachingouttoGPLPfortrainingonhowtoconstructthemforlocalfarmers.

PhaseIIwillbefinalizedineitherlate-2017orearly-2018,howeverGPLPandHelvetasunderstandtheydon’thavethefinancialcapacityto‘go-big’withthisproject.Therefore,theyaresettinguptheGPLPprogramofficeasaconsultancyforotherorganizationswhowanttoadoptallorportionsoftheGPLPprojectinregionsnottargetedbyPhaseI.GPLPmentionedalreadypartneringwiththreeorfourorganizationsandeachisslightlytinkeringwiththemodeltoseeiftheycanachievesuperiorresults.Forexample,oneoftheorganizationsissubsidizingthepurchaseofthemetalsilostospeedadoptionandinjectingcapitalintolocalbusinesses.

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Recommendations WiththeultimategoalofincreasingsmallholderfarmerhouseholdincomeinruralTanzaniainmind,theideaofdevelopingsharedprocessingfacilitieswithinvillageswasdeemedanareafortheGAPteamtoassessbyGWI.Thethoughtwasthataco-opstylefoodprocessingfacilitywouldallowruralfarmerstoretainmorevaluefortheiragriculturalinputsbyinvestingresourcesinrefiningtheircropsintosalableendproducts,thuscommandingahigherpriceinthemarketplace.

Afterinitialassessmentoffoodproductionoperations,itwasclearthatsomedimensionoftheexistingbusinessmodelsseemedtobeworkingwellandcouldbetransferredtosmallvillage-levelfoodprocessingoperations.However,oncewecouldbetterassessthecurrenteconomicandculturalstateofsmallvillagesinruralTanzaniathroughourvillagevisits,thedifficultyinestablishinganysharedproductionfacilitywasquicklyrealized.Furthermore,ourdoubtsonthepotentialsuccessofvillage-levelproductionfacilitieswasechoedbyownersandmanagementofprivatebusinessandsocialenterpriseswithintheagriculturalprocessingsectorbasedonthepreviouslydescribedconstraintsandchallenges.

Amajorlimitingfactortosmallvillages(<5000inhabitants)wouldbetheirabilitytoobtainandstaycurrentwithproperfoodprocessingpermits,productregistration,exportpermits,safetyregulations,andpropertaxationrequirements.Anyfoodprocessingfacilitywouldneedmanagementstaffeducatedintheseregulationstobeabletosetupthefacilityaccordingtostandards,maintainthosestandards,andtroubleshootasneededtopreventshut-downandlostincomeforextendedperiodsoftime.

Small-scaleproductionispossible,examplesbeingasharedmillingmachineandrawsunfloweroilpressing,buttheseproductscanonlybesoldortradedatlocal"farmer’smarkets"anddonotfollowanyregulationsorstandardsinproduction.Furthermore,spoilageandcontaminationwerefoundtobemajorissuesthatcreateabarriertoentryforsmall-scaleproducers.Thesetypesofproductsmayprovideextraincomeforahouseholdbutcannotbesoldinlegitimatebusinessesandthuscommandalowerpricethantheywouldinmoreregulatedmarkets.(Appendix4)

Takingintoaccountthelimitationsplacedontheopportunitytodevelopvillage-levelsharedprocessingfacilities,wehavemadeotherrecommendationsthatGWIshouldconsidertoincreasetheindividualincomeofsmallholderfarmersinruralTanzania.

EducationInitiativesAprioritythatGWIshouldundertaketoincreasethehouseholdincomeofsmallholderfarmersistodevelopinitiativestoeducatefarmersonaccuratefairmarketpricesfortheiragriculturalproducts.

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Community Radio & Bulletin Board.FarmerssellingtheirharvesttomiddlemeniswhatNinaNchimbitermed“culturalconditioning.”Itisthesituationwheretheysimplydonotknowanybetter,likelyasaresultofseeingtheirparents,neighbors,andfriendsallsellingatthetimeoftheharvest,neverconsideringthatthereareotheroptionsavailabletothem.Resolvingthissituationinvolvesdeliberateeducationthroughworkshops,radio,printedmedia,villageparties,andotheroutreachefforts.Itisimportanttonotethatradiohasbeenattemptedbeforewithmixedsuccess,howeverthekeydifferencebetweenthenandnowistheexplosionofsingle-homesolarsystemswhichoftencomewitharadio.Therefore,thenumberofpeopleinthetargetaudiencewithaccesstoradiohaseffectivelygonefromzerotosizable.Notallmembersofthetargetaudienceneedtoownaradio,theyonlyneedtofrequentlyinteractwiththosewhodo,sincestoriesabouthowfarmerscanincreasetheirincomewillcreatea“buzz.”

WhentheGAPteamaskedoursponsorsinOrkesumetwhytheydidnotpostpricesforcommongrainsinthetwoorthreeclosestmarkets,oursponsorslookedatusliketheyhadneverconsideredsuchathing.Somethingassimpleassignageinacommonareawithpricinginformationwillstartabuzzwithintown,causinginformationtoreachmostofthetown.Thiswouldgivefarmerstheknowledgethatpricesfluctuatethroughouttheyear,andtheknowledgetotrytosqueezemoremoneyoutofmiddlemenshouldtheyhavetoselltothem.

Loss prevention.Oncefullanalysisoftargetvillagesiscomplete,GWIshouldenterintoanagreementwherebyHelvetasGPLPactsastheconsultingpartnerontheprogramthatGWIhasdecidedbestfitstheirgoals.GPLPbelievestheyhaveprovenouttheirmodel,howevertheydonothavethefinancialcapitaltoexpandthroughoutTanzania,muchlessEastAfrica,withtheirsolutionset.Therefore,theyhaveconcludedthattheirmosteffectiveroleisthatofadvocacywithTanzanianstakeholdersandconsultancytoexternalentitieswishingtolaunchsimilarprogramswhileshorteningthelearningcurvefornewprograms.

GPLPmentionedthattheyarecurrentlyactingastheimplementationconsultancyforthreeorfourotherpartieswhoaretakingtheirmaterialtoareasnottargetedbytheHelvetasproject.GPLPseemstohavenoprideofownershipintheirsolutionandseemtobeinterestedintheirclientstinkeringwiththeirmodeltoseeiftheycanachievesuperiorresultsoriftheycanprovethatcertainmodelsworkbetterindifferentareas.OnespecificexamplementionedwasanotherpartysubsidizingthepurchaseofGPLP’smetalsilostospeedtheadoptionoflonger-termstoragesolutionsfrompolypropyleneorPICSbags(doublewallednylonbags).Lastly,GPLPmentionedthattheydonotknowofeitherthefarmereducationormicro-financeapproachbeingattemptedintheSingidaregion,sothatareashouldbewideopenforGWI.IntheDodomaandManyararegions,GPLP’sprogramstargetedaround33%ofresidents.

GWIcouldpartnerwithseveralinstitutionswithinBigTenschoolsthatareleadersinthefieldofpost-harvestlossprevention.PurdueUniversitywasthedeveloperofthePICSbags,andthe

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ProgramManagerforthePICSprojectisMs.CaroleBraund,[email protected],Dr.PrasantaKalitaistheDirectoroftheArcherDanielsMidland(ADM)InstituteforthePreventionofPostharvestLossattheUniversityofIllinoisatUrbana-Champaign.TheADMInstituteforPreventionofPostharvestLosshostedaCourseracourseonthetopicofpostharvestlossin2017.

GWIshouldreachouttoGPLPandinitiatediscussionsregardingwhatapilotinSingidaregionmaylooklike,withGPLPbeingthetechnicaladvisorforGWI.Thisprojectcouldbequicklypilotedandiseasilyscalable,soitisveryrealisticthataGWI-sponsoredPhaseIcouldbelaunchedinlessthan12monthsfromthestartofthepilot.ThesitesfortheGWI-GPLPprojectcouldeasilyoverlapthe125to150sitesthatthewaterprojectisbeingtestedat.

AlterationsoftheHelvetasprojectGWIthatcouldreviewincludegivingeachfarmertwotothreePICSbagsaftertheirtrainingorsubsidizingaportionofthecostofametalsilo.Further,GWIcouldincludedemonstrationsofothercomplementaryproductssuchastheBasicUtilityVehicle,dripirrigation,improvedseedvarieties,andmechanicalshelling/threshingtechnologiesalongsidetheGPLPexhibits.

RawProductTransportationShared trucks.Theexistenceofmiddlemenhasbeensustainedovertimepartlyduetothefactruralfarmersdonothaveaccesstoadequatetransportationtogettheirrawagriculturalproductstomarketswheretheycanbesoldfortheirfullvalue.Instead,thedistancebetweenruralfarmsandmajormarketsrequiressmallholderfarmerstoeitherhiresomeformoftransportfortheirgoods,orselltheirgoodstoabuyerwhocomestotheirvillage.Aspreviouslydescribed,thiscutsintothefullvaluefarmerscanselltheirgoodsfor,sometimesrequiringthemtosellatasubstantialdiscount.

GWIcaneitherprovideruralvillageswithlargetrucksthatacollectionoffarmerscansharetodelivertheircropstomarketwhenneededorpartnerwithorganizationsalreadyprovidingsomeformoftransport.Purchasinglargevehicleswouldrequirethatthevillagemaintainateamofcitizenswhocoulddrivethevehicleandprovidegeneralmaintenanceasneeded.Therewouldalsobetheneedtostaycurrentonanypermitsandinsuranceonanannualbasis.Finally,eachvillagerwhousesthevehiclewouldhavetopaysmallfeestocoverfuel,buttheseexpenseswouldbefarlessthanthefullcostofhiredtransport.

Official Producer Contracts.Severalorganizationsthatwemetwithincountry,suchasYazaSunflowerOilandNaturalExtracts,sendteamsofbuyersouttoruralvillagestobuywhateverproductstheyneedatmarketprice,lessasmallfeefortransport,directlyfromthesmallholderfarmers.Thiscreatesnoneedforfarmerstofindtheirowntransport,yettheyarestillguaranteedmaximumvaluefortheirrawagriculturalproducts,sincetheyaresellingdirectlytoreputablefoodprocessors.Wecannotguaranteethatallfoodprocessorswillprovideafair

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pricetothesefarmers,butGWIcanundertakeaninitiativetolinksmallholderfarmersandfoodprocessorsviacontractswithsetprices.

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Other Key Findings Multi-CropIncome/Off-SeasonIntercropping.Asfarmerstrytousetheirlandmainlyforsubsistenceliving,theytendtofocusonaselectgroupofcropsbasedontheirregionalclimateandgrowingseasons.Intercroppingoffersfarmerstheabilitytoexpandtheirincomebyincreasingtheirlandutilizationwhilestillnotdecimatingthesoil’shealth.Commonintercroppingcombinationsaremaizeandbeansorvanillaandbananatrees.Theseplantscomplementeachotherwellbasedontheirgrowingneedsandallowsforadditionalincomewithlittlevariablecost.

GWIcanworkwithorganizationsthatarecurrentlyeducatingfarmersonintercroppingtechniques,suchasOneAcreFund13.ByeducatingfarmersontheintercroppingpotentialtheagriculturaloutputfromTanzanianfarmerswillincrease,potentiallyliftingtheentireindustry.SeveralcompaniesthatwemetwithwhileinTanzanianotedthatthereissimplynotenoughsupplyofqualityagriculturalproductsavailableinTanzaniaforprocessingfinishedcommercialgoods,forbothdomesticandexportsale.Increasingoverallsupply,whilealsofocusingonnicheagriculturalproducts,suchasvanilla,shouldleadtoincreasedincomefortheagriculturalindustry,andthussmallholderfarmers.

BUV Partnership.BasicUtilityVehicle,Ltd.isasmallbusinesslocatedintheSmallIndustriesDevelopmentOrganizationsiteinArusha,Tanzania.ThebusinessisthebrainchildofaTanzanianresident,ByronBorden,whowasbornintheUnitedStates,butmovedtoKenyawithhisfamilyattheageoffour.Minusaseven-yearexcursiontoPortugal,BordenhaslivedinEastAfricaallhislife.HeworkedintheEastAfricanaidindustryforover20yearsandconcludedthataiddoesnotwork,butwitnessedenterpriseworkwhereitwasnotinterferedwithbydonors.

BordenhaspartneredwiththeInstituteforAffordableTransportation(IAT)indevelopingandmanufacturingBasicUtilityVehiclesinTanzaniaandhassomesalesacrossEastAfrica.TheBUV’ssellingpointisthatthevehicleisconstructedwithonlycharacteristicsrequiredforruralpeoplelivingindisconnectedornearlydisconnectedEastAfricanvillages.Anyotherluxuryisstrippedout.Thishasresultedinalow-costhaulingvehiclethatiscapableoftraveling20kmperliter(47milespergallon)ofdiesel.Giventhiscapability,Bordenhaswitnessedmostcustomersgoingfrommaking$60to$70permonthto$60perday.Despitetheincrediblebenefits,hehashaddifficultysellingBUVs.Heattributesthistobeingcommittedtotheworkshopfull-time,ashehashadtoworkouttheoperationalkinksoftrainingandsupervisinghisstaff.Thishasresultedinnosalesstrategyorsaleseffort,otherthanawebsiteandbrochures.

13https://www.oneacrefund.org/uploads/all-files/Report_Ag_Innovations_Intercropping_FINAL.pdf

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TheGAPteamfeelsthatpartneringwithBUVcouldbealow-costquickwinforGWI.Discussionswithafoodprocessingequipmentsupplier,BRAZ-AFRIC,revealedthatalmostalloftheirsalescomefrompeoplewhoattenddemonstrationsthattheyroutinelyholdaroundTanzania.ThedemonstrationapproachedisalsousedbyBRAZ-AFRICinUgandaandKenyaaswell.IfGWIcouldsupportBUVwithoneortwosalesstaffthiscouldbeawinforGWI,ruralvillages,andBUV.Furthermore,astheBUVsaremanufacturedinArusha,thiswouldsupportthedevelopmentofskilledtradesinTanzania,andsupportthegrowthoflocalsupplychainsasdemandformaterialsusedinBUVconstructionwouldcreateananchorbuyer,increasingeconomiesofscalethatotherbusinessescouldleverageforgrowth.

WesuggestamodelwheretheGWI-supportedsalesstaffspend50%oftheirtimetargetingareasthatBordendeterminespresentagoodopportunity,andtheother50%targetingvillagesonGWI’sprioritylists.ThebenefitstoBorden’scompanywouldbeimmense,asrightnowheisplanningonpersonallytacklingthemarketingissuetoincludeconductingdemonstrations.Also,heisnotanative-bornEastAfrican,sopotentialcustomersandlocalgovernmentofficialscouldconfusehimwithsomeoneworkingforanaidorganizationandbelievethattheBUVsshouldbeprovidedfreeofcharge.Thiswouldprovideasubstantialincomeboosttoonememberofthecommunity,howeverthebenefitsofmakingtransportationavailabletothecommunitycouldhelpsupporttheentirecommunity.

Webelievethatthebenefitsofincreasingtheavailabilityoftransportationinruralvillagescanprovidevaluetothevillageandnotjusttheserviceprovider.Currently,logisticsserviceproviders—likecropbrokers—arenotfromthevillagesthattheyserve,sotheyareincentivizedtoseekthehighestprofitpossibleattheexpenseoftheircustomers.Ifalogisticsserviceproviderislocatedwithinthevillage,theyareincentivizedtoalwaysreturntothevillagehaulingsomething,evenifonlytopayforthefuelrequiredtoreturntothevillage.Thiswillincreasetheavailabilityofproductswithinthevillage,andlikelydepresspricesbyremovingscarcityofproductsdemandedwithinthevillagethatthecurrentlogisticsserviceprovidersarenotincentivizedtohaul.Secondly,thedriverwillreturnwithinformation.InformationcouldbeintheformofwhatbuyersarepayingforgoodsatcompanyXcomparedtocompanyY.Informationcouldbeknowledgeaboutaffordabletechnologiesthatthedriverhasseenusedelsewhere,suchassolarelectricity.Informationcouldbeintheformofpitchingvillagerstopurchasefertilizerorotherinputsthatmightincreasetheirincome.Afurtherbenefitwouldbemarketingbythedrivertoincreasehisworkload,but,sincehelivesinthevillage,hewouldbeonthehookforanyideahe‘sells’thatdoesnotpanoutasexpected.Lastly,thiscouldhelpconnectruralvillagerswithlegitimatebuyersandhelpthemnotfeelforcedtousebrokersnowthattheyhaveadriverwholivesintheircommunityandismoretrustworthy.

TheGAPteamfeelsthattheinvestmentGWIwouldberequiredmakeifthisopportunitywerepursuedwouldbeminimal.Ahighestimateofthecostofasalariedsalespersonwouldbe

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$20,000/yearfortheirsalaryandpotentiallyanother$10,000/yearforexpenses.ItwouldbeadvisableforGWItoonlydonateaportionofthesalaryandnotgetinvolvedinexpenses,soBordenissolelyonthehookforanyabuseofrecoupingexpensesthatcouldoccur.

TheGAPteamdidnotpresentthisideatoBorden,sowedonotknowhowopenhewouldbetoit,otherthanhiscommentthatasalesandmarketingeffortishisbiggestpainpoint.ThisseemedlikeanopportunitytopotentiallygetaquickwinwithalocalcompanythatcouldhaveverypositiveoutcomesforBUV,Ltd.,Arushacraftsman,individualspurchasingBasicUtilityVehicles,anddisconnectedruralvillages.

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Appendix 1RootCausesforMiddlemen

RootCause forSmallTanzanianFarmersSellingtoMiddlemen

ResponseActions Location theGAPTeamFoundtheRootCause Prevalent In

BullyingandIntimidationofFarmers • IncreasedPolicing

• NeighborhoodWatch

• MobilePhonePenetrationforPictures

andRapidReporting

Arusha,Moshi

PragmaticCashNeeds(kidsschoolbills,

medicalsituation,etc.)

• WRSincollaborationwithmicro-

finance

Dodoma

“CulturalConditioning”– Isellatthetime

oftheharvestbecausethatiswhatmy

parentsdid

• Education:

• ShortTerm– Communityboards

listingthepriceofgrainsinnearby

markets

• LongTerm– Community Radio,

deliberatelyplanned trainingor

communitythemedparties

Orkesumet inManyara Region

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2CropLifeCycle

Seeding Planting Growing Harvesting FarmerProcessing

Storage Transportation IndustryProcessing

Routetomarket

Challenges -GenerationalSeeds havedecliningyieldseachgeneration-Lack ofgoodqualityandquantitysupplyforindustryprocessors

Manual- Slow- Improper

depth/spacing

- Fertilization- Irrigation- PestControl- Disease

Control- Verylow

yield

15-40%harvestlossduetomanual,delayedharvest,oldmethodsoftransportationanddrying,improperuseofpreserver

Manual- Slow- LossofCrop- Spreadof

fungus- AnimalEatItLack ofprocessingfacilities

- Spoilage- Lackof

Education- Cashflow

causeimmediatesales

-Middlemenbullyfarmers,holdup andmanipulatepricestofarmers/processors-Speculationongrainfuturesisrampant

-LowutilizationHighproductioncost-High cost/longprocessofgettingqualitycertification:ISO-Highworkingcapitalrequired-Insufficientinfrastructure(poorroadcondition,powercut)

-Massconsumerscannotaffordfoodprocessedproductsduetolowincome.-Smallfoodprocessorscannotreplyondistributors/wholesalerstomarkettheirproductstostores-Qualitycertificationrequiredforexporting

WhatHasFailed GivingFarmersSeed• Theysold

Immediately• Processors

Can’tEnforceFrontProductAgreements

Givingfarmersmechanicalequipment- NoR&M

Farmersbuyingmechanicalequipment- PoorQuality

GivingFarmersAnythingFree



Farmersbuyingmechanicalequipment- Lowqualityproductspurchased

Policing - Co-ops- FarmersAssociations

WhatHasProven toWorkMostoftheTime

- Education- WRS

w/micro-finance

WhatisBeingAttempted;ResultsPending

Contractfarminginmediumscale(Yaza is workingwithfarmersaround theirfactoryinSingida)

SIDOoffercentralizedprocessingcentersothatfarmerscanbringtheircropstoprocessandnegotiatesellingpriceswithbuyers

-Siloage-PICSBags-Coldstorageforperishablecrops(avocadofromTAHAFreshproject)

ExportingAvocados(AfricadoandRungweAvocadoCompany)TAHAhotline toinformfarmersthemarketpricesofcropsinnearbyregions

Organize smallfarmerstoclusters,andlinkthosetofoodprocessorstoeliminatemiddlemen(TAHAprojects)

Food processorsisrecruitingdistributorstoacquirebigvolumetoincreaseutility(Masasi withLulubrands)

WhatHasn’tBeenTried

VendorFinancing

VendorFinancing

Educationfarmersonalternativetransportationoptions

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3FoodProductionFacilityPermitsandRegulationsTanzaniaFoodandDrugAuthority:regulatesthequality,safety,andefficacyoffoodhttp://www.tfda.or.tz/index/

• Pre-packedfoodproductregistration(onetime)TZS40,000• Foodproductionregistration(annual)USD10• Newprocessingfacilityinspectionfee(onetime)

o LargeScale=TZS150,000o MediumScale=TZS150,000o SmallScale=TZS75,000

• ExportfoodpermitTZS50,000• Foodsellingoutletpermit(annual)TZS30,000• HealthcertificateTZS20,000

OccupationalSafetyandHealthAuthorityTanzania:Aimedatimprovingthehealthandwell-beingofworkersandofworkplacesbyinspectingoccupationalsafetyandhealthpracticestopreventworkplaceinjuryanddisease.http://www.osha.go.tz/

• Firstaidinspections(annual)• Fireextinguisherinspections(annual)• Fireescapeplanproof(annual)• Firehazardinspections(annual)• Processingfacilityemployeehealthassessments(every6months)

TanzaniaRevenueAuthority:responsibleforadministrationandcollectionofvarioustaxesoftheTanzaniacentralgovernmenthttp://www.tra.go.tz/

• Taxation• Exportdocumentation

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4SummaryofGrocerPricesforFoodProductsinTanzaniaName:UnnamedShopinArusha'sCentralMarketDescription:WellstockedstoreintheCentralMarket.Theyseemedtohaveawiderangeofnon-perishableitemssuchascondiments,tea,coffee,edibleoils,flour,bakingsoda,soap,toothpaste,andlaundrydetergent.Theyalsohadsomenon-foodproductssuchassandals.TherewasamixtureofproductsfromIndia,Malaysia,TanzaniaandotherEastAfricancountries.TheGAPteamdidnotnoticeanythingmadeinwesterncountries.Competingwithsunfloweroilwasvegetableoil,cornoil,andoliveoils.CompetingwithRedGoldweretwodifferenttypesoftomatopasteseachpricedabout1,000tshmore(AmericanGardenfromUAE,andaKenyanbrand).WewereinthisstorewhilebeingharassedbythetoutssowewerenotabletoconductasthoroughofananalysisasattheotherstoresinArusha.Whenaskedifthestorecarriedrawsunfloweroiltheworkergaveaverypuzzledlookandrespondedwith"No,never."Summaryofpricesobservedon8May2017:ProductName Price(tsh) PlaceofOrigin(ifknown) Manufacturing

CompanyRedGoldTomatoPasteProducts(250g)

1,000 Arusha,Tanzania DarshIndustries

RedGoldTomatoPasteProducts(880g)

2,000–2,500

Arusha,Tanzania DarshIndustries

SingidaSunflowerOil(3L) 14,000 Singida,Tanzania SingidaOilMills

SingidaFreshSunflowerOil(3L) 14,000 Singida,Tanzania SingidaFreshOilMills

SunolaSunflowerOil(3L) 14,000 Singida&Arusha,Tanzania MountMeruOilMillsSingidaSunflowerOil(5L) 20,000 Singida,Tanzania SingidaOilMills

SingidaFreshSunflowerOil(5L) 20,000 Singida,Tanzania SingidaFreshOilMills

SunolaSunflowerOil(5L) 20,000 Singida&Arusha,Tanzania MountMeruOilMillsSundropSunflowerOil(5L) 20,000 DaresSalaam,Tanzania MurzahOilMillsName:UssokeSupermarketinArusha(acrossthestreetfromtheKoronaHousewherewestayed)Description:Seemedlikemoreofaconveniencestorethanasupermarket.Productseemedtobeveryoverstockedonsomethingsandveryunderstockedonothers,whiletherewaslotsofavailableshelfspace.Therewasabizarrecollectionofwhatseemedlikelowerendgoodsandwhatseemedlikeluxurygoods(veryexpensivesoysauceforexample).Seemedtobemoreofaliquorstoreandthenyoucouldgrabotherthingsthananythingelse.Theownerwasresponsivetowhathepaysvendorsandnon-alcoholicitemsrangedfrom15%to50%mark-updependingontheitem.Summaryofpricesobservedon8May2017:ProductName Price(tsh) PlaceofOrigin(ifknown) ManufacturingCompanyRedGoldPickledMangos(300g) 3,000 Arusha,Tanzania DarshIndustriesRedGoldTomatoPasteProducts(880g)

2,000 Arusha,Tanzania DarshIndustries

33

RedGoldBrownVinegar(1000ml) 2,000 Tanzania,cityunknown DarshIndustries

GreenLabelTea(50bags) 2,500 DaresSalaam,Tanzania AfriTeanandCoffeeBlendersLtd

KilimanjaroTea(25bags) 2,000 DaresSalaam,Tanzania AfriTeanandCoffeeBlendersLtd

PorridgeFlour(1kg) 3,000 Arusha,Tanzania AfriYouthPride

UNGAWAULEZIMilletFlour(1kg) 3,000 Arusha,Tanzania NYIREFAMILtd

EdenNutritiousFlour(1kg) 3,000 Arusha,Tanzania Eden

Eachoftheflourcompanieshade-mailaddressesontheirpackaging:

• AfriYouth–[email protected]• ULEZI–[email protected]• Eden–[email protected]

Name:VillageSupermarketinArusha'sNjiroComplexDescription:SeemedlikeTanzania'sversionoftheexpatgrocerystoryasthereisoneinArushaandoneinDaresSalaam.MostoftheproductwasofinternationaloriginwithalotofproductsfromtheUSsuchasmultipletypesofPringlesandCocoaPuffscereal.MostofthepeoplewesawshoppingwereclearlynotEastAfrican,butnotallwhite.NopalmoilwasobservedattheVillageSupermarket.Summaryofpricesobservedon8May2017:ProductName Price(tsh) PlaceofOrigin(ifknown)Best-InSunflowerOil(1L) 11,900 UnitedKingdomHTCPureSunflowerOil(1L) 11,000 UnitedKingdomHTCPureSunflowerOil(5L) 44,500 UnitedKingdom

LiteLifeSunflowerOil(5L) 44,500 UAE

Best-InPureVegetableOil(2L) 19,500 UnitedKingdomWhitePearlVegetableOil(5L) 42,500 UnitedKingdom

WhitePearlSunflowerOil(5L) 47,500 UnitedKingdom

MazolaPureCornOil(1L) 14,500 UnitedStatesCypressaExtraVirginOliveOil(3L) 89,500 UnitedKingdomOliveBranchExtraVirginOliveOil(5L)

129,500 UnitedKingdom

GreenLabelTea(50bags) 2,000 Tanzania,cityunknown

KilimanjaroTea(25bags) 1,100 Tanzania,cityunknown

Name:NakumattSupermarketinArusha'sTFAComplexDescription:KindofTanzania'sversionofaSuperWal-Mart.Thesupermarketwasreferredtousbythehotelstaff,andwasnexttoBrazAfrictheagriculturalprocessingequipmentdistributor.ThereisaNakumattSupermarketinMoshi,justwestofKilimanjaroAirport,butitis

34

uncleartotheGAPteamhowwidethereachofthischainis.ThesupermarkethadadiversearrayoflocallymadeproductstoincludeTanzaniansunfloweroil,locallymilledflour,millet,andsoy.InterestinglytherewerenoRedGoldproductsatall,whichwassurprisingbecausetheVillageSupermarketappearedhigherendandstillcarriedsomeRedGoldproducts.NopalmoilwasobservedintheNakumattSupermarket.Summaryofpricesobservedon9May2017:ProductName Price(tsh) PlaceofOrigin(ifknown) ManufacturingCompanySundropSunflowerOil(3L) 13,700 DaresSalaam,Tanzania MurzahOilMillsSundropSunflowerOil(5L) 24,000 DaresSalaam,Tanzania MurzahOilMillsNoorSunflowerOil(3L) 19,500 Egypt IFFCO

SunbeltSunflowerOil(1.8L) 13,600 Dodoma,Tanzania SunshineIndustrialCo.Ltd

SunbeltSunflowerOil(3L) 17,700 Dodoma,Tanzania SunshineIndustrialCo.Ltd

KorieVegetableOil(3L) 11,800 DaresSalaam,Tanzania MurzahOilMills

UNGAWAUWELEMilletFlour(1kg) 2,900 Arusha,Tanzania NYIREFAMILtd

UNGAWAUWELESorghum(1kg) 3,000 Arusha,Tanzania NYIREFAMILtdLisheNut–CerealMixFlour 5,400 DaresSalaam,Tanzania PowerFlourLishe-SoyaMixFlour 4,200 DaresSalaam,Tanzania PowerFlourNakumattBlueLabelCoffee(200g) 19,300 Kenya TanicaCafé(50g) 3,900 Bukoba,Tanzania TanganyikaInstantCoffeeTanicaCafé(100g) 6,400 Bukoba,Tanzania TanganyikaInstantCoffeeTanicaCafé(250g) 13,400 Bukoba,Tanzania TanganyikaInstantCoffeeCaféBora(50g) 3,900 Bukoba,Tanzania TanganyikaInstantCoffeeTanCafe(100g) 6,500 Moshi,Tanzania TanzanianCoffeeBoardTomatoPasteProducts 2,600 International CanadianHarvestPeptangChiliSauce(375g) 2,100 Nairobi,Kenya PeptangBongoPiliPili(350g) 5,200 International CanadianHarvest

35

5MeetingNotes

HAPA

Contact:Noel(founder)andBaraka(facilitator),Peter(driver)Email:[email protected] HAPA(HealthActionsPromotionAssociation)wasourpointofcontactwithintheSingidaregionthatprovidedusaccesstoseveralbusinessesthroughouttheareathroughtheirformalgovernmentalintroductionprocess.ThecompanyvisitsbenefittedHAPAasalearningopportunityforemploymentsafetyandtrainingaswellasgeneralcommunityknowledgeaboutprofitablelocalbusinesses.

• Foundedin1997o SisterorganizationinTabaraHIPOisalmostbankrupt

• HAPAmeans“here”inSwahili• Focusedonhealthprojectswithintheregionforwomen,children,andyouth

o Handwashing• Received2billionTZSoffundinglastyearfromvariousforeignaidorganizations

(~$900,000)• Highlevelofworkrequiredforwritingfundingproposals• 14employeeswithrotatinggroupsofforeignvolunteers• Healthandwatereducation(handwashing,sanitation,safewater)• Youthdiseaseeducationandprevention(waterborndisease)• Looksatproblemsandtriestocomeupwithactionplansforpreventingtreatment,

bestpractices• Lookingtosupplementandfacilitateprojectsbetweenthegovernment,donorsand

communitieso HAPAcanbea3rdpartytomediatedisputesandensurequality

• MostofthediseasesfoundinSingidaarepreventableo Malaria,cholera,typhoid,diarrhea

• Havedoneworkinmorethan6provinces:Dodoma,Arusha,Kilimanjaro,Morogoro,Singida,Manyara,Shingara

• Believestheyhaveawaytofasttrackvolunteervisaswithinthegovernmentprocess• Improveschoollearningenvironment• Providehealthservicesincloserproximitytolocals(currentlylongwalksforhealth

service)• Interestingstrategyofusingfocusgroupstodeterminerootcausesofissues,aswellas

underlyingreasonforlocalcitizenneedshttp://hapa.or.tz/about.php?page_id=hapa_profile+23443?$

36

ORGANIZATION, NAME, AGE AND LEGAL STATUS

Health Actions Promotion Association (HAPA—SINGIDA) ORGANIZATION PROFILE

P.O. Box 1013, SINGIDA Plot Number 134, Mwanza Road - Singidani area Singida Municipal. Telephone: +255(0)262502499 Fax: 026-2502311 Email: [email protected] Web: www.hapa.or.tz Mobile Telephone: +255(0)783975372

Health Actions Promotion Association (HAPA) is a Tanzanian Non-Governmental Organisation (NGO) established in the year 2000 and registered in May 2001 under the Societies Ordinance with registration number is SO 10892.

CONTACT DETAILS

ORGANIZATION BACKGROUND

ORGANIZATIONAL GOALS

PROJECT AREA

MISSION

HAPA CORE VALUES

VISION

HAPA envisions a Healthy,

Educated and Empowered

society.

HAPA was formed after the closure of the Health Project Abroad (HPA) a British NGO in 2001. HAPAs work is governed by its Constitution and Government or Sector policies. For example by the year 2025 Poverty eradication will be 85% and also beneficiaries and other parties will be involved and participate in their development work.

HAPA operates in the regions of Tanzania Mainland, Current at Ikungi, Mkalama and Iramba Disctricts of Singida Region.

HAPA’s development initiatives and processes are shaped by seven core values: (a) Commitment (b) Accountability (c) Learning (d) Voluntarism (e) Effectiveness (f) Transparency and democracy (g) Team work

HAPA is a reputable organization that enables,

creates and sustains wellbeing of communities by provision of quality services in water, health and education in collaboration

with stakeholders.

1. Promoting community awareness and practices on reproductive and child health, ASRH and increasing access to health facilities.

2. Increasing access to clean and safe water and promotion of H&S practices. 3. Increase community access to quality education and improvement of learning

environment. 4. Promoting income generating activities to marginalized group i.e. youth, women & people

with disabilities. 5. Promoting good governance to rural communities. 6. Strengthening the institutional and organizational capacity of HAPA. In pursuing the mission HAPA will operate by using participatory approach. The organisation is also committed to the highest standards.

The Organisation specialises in three aspects: HEALTH, EDUCATION & WASH programmes.

HAPA is the member of Tanzania Water and Sanitation Network (TawasaNet), SINGONET (Singida NGO Network), SRHR southern Alliance.

Target Group Young people, Adult men and women. Activities (a) Training of community selected groups i.e. PE, CORPS, TOT, Folk media, Health Care

Providers. (b) Gender Focused Discussions. (c) Weekly training sessions targeting men. (d) Strengthening community structures such as health committees. (e) Community sensitizations meetings. (f) Designing & production of IEC promotion materials. (g) Lobbying and Advocacy. (h) Monitoring, backstopping support visits. (i) Baseline surveys, mid-term evaluations and end of project evaluations. Approaches (a) PRA. (b) Community Score card. (c) Male involvement. (d) Child to Child. (e) Mass campaigning. (f) CBHC. (g) Puppet shows. (h) Competitions.

(a) Modern office block along Lake Singidan. (b) Latest office equipment including computers with Printers, Telefax

and Internet facilities. (c) A small yet up-to-date documentation centre located at the main office

block. (d) Four vehicles owned by the organization and a fleet of other vehicles

are readily available on hiring basis.

There are 14 Individuals who have different technical and professional skills and are conversant with community participation methodologies and techniques that are used by HAPA. The team has been involved in Community interventions for a considerable period of time.

There are three types of membership for any interested person wishing to join HAPA. Levels of membership are:

Target Group Young People Activities (a) Formation & training of school health clubs on life skills, HIV/AIDS, hygiene and sanitation. (b) Construction/rehabilitation of classrooms, staff houses, gender friendly latrines, harvesting

rain water tanks. (c) Supports desks and books. (d) Supporting school feeding. Approaches (a) PRA (b) RRA (c) Community mobilization meetings (d) Child to Child (CtC) (e) Peer education (f) Interschool competition (g) SWASH guideline.

Target Group Young people, Adult men and women Activities (a) Training of community selected group’s i.e. Local artisans, animator, and

community sanitation committees on hygiene & sanitation promotion, constructions of low cost latrines, entrepreneurship skills & Sanitation marketing.

(b) Formation and training of Community Water Supply Organizations (COWSOS).

(c) Hygiene and Sanitation marketing & campaigns. (d) Demonstration of low cost latrines options through construction of sanitation

centers. (e) Rehabilitation/development of productive boreholes & shallow wells as well as

pipe schemes. (f) Designing & production of IEC promotion materials. (g) Construction of rainwater harvesting tanks. (h) Lobbying & Advocacy. (i) Monitoring, backstopping support visits. (j) Baseline surveys. Approaches (a) PHAST (b) CLTS (c) Child to Child (d) MTUMBA approach (e) Sanitation Marketing campaigns (f) PRA.

Is open to any person or organisation who/which agrees, promotes, supports and pursues the aim and objectives of the organisation and has paid his /her membership fee and subscriptions. All employees of HAPA are encouraged to apply for ordinary membership

Shall be open to any person or organisation who/which promotes or supports the cause of the organisation and has been approved by the Board of Directors and has paid the membership fee and subscriptions.

HAPA implements projects from different donors and her annual income differ yearly depending with the number of donors in that particular year. The organizations over head cost usually is 15% but may differ in other donors that pay directly the staff that implement the project in question. HAPAs current income is Tshs.1 Billion a year that is from different funding partners and her accounts are externally audited annually. Therefore it is believed that this project can be implemented within the stated period due to the experience drawn from the previous years in Implementing water hygiene and sanitation and other projects.

The organs of HAPA include the General Meeting, Board of Directors and the Management Team, which are governed and directed by HAPA Constitution. The organisation management and financial regulations are stipulated in operational manual. The Board of Directors, which has no decision power, is charged with the responsibility of monitoring, supervision and in advising HAPA and to provide support to the management team of HAPA on matters related to planning and management of resources. The General Meeting where all HAPA members are involved is the highest organ with powers and final decision on all matters of the NGO.

Shall be open to any person or organisation who/which promotes or supports the cause of the organisation without having to pay membership fee and subscriptions and has been approved by the Board

(a) Sustainable Environment Management Action (SEMA). (b) Youth Movement for Change (YMC).

HAPA works very closely with other grassroots development partners on a collaboration basis/ networking. Our Partners include government agencies and/or departments and other NGOs operating in Singida Region. These include:-

NETWORKING & COLLABORATIONS WITH OTHER NGOs

SPECIALIZATION

GOVERNANCE AND LEADERSHIP

Health

ORGANIZATIONAL CAPACITY

Education

Water Hygiene & Sanitation (WASH)

Human Resource

Financial Capacity

Physical Assets

Ordinary Membership

Honorary Membership

MEMBERSHIP

Networking

Collaboration

Associate Membership

ORGANIZATIONAL STRUCTURE

HUMAN RESOURCE ADMINISTRATOR

AGM

EXECUTIVE DIRECTOR

BOARD OF DIRECTORS

PROGRAMME MANAGER

PO

TRANSPORT (DRIVERS)

FINANCE ADMINISTRATOR

PO PO

WASH COORDINATOR

OFFICE ASSISTANT

PROJECT ACCOUNTANTS

HEALTH & EDUCATION

COORDINATOR

PO

PROCUREMENT OFFICER

SECURITY (GUARDS)

VOLUNTEER AFRICA

COORDINATOR

MONITORING AND EVALUATION & INFORMATION TECHNOLOGY

37





CONTACT DETAILS



PROJECT AREA

MISSION

HAPA CORE VALUES

VISION



society.






with stakeholders.































SPECIALIZATION


Health


Education


Human Resource

Financial Capacity

Physical Assets

Ordinary Membership

Honorary Membership

MEMBERSHIP

Networking

Collaboration




AGM

EXECUTIVE DIRECTOR

BOARD OF DIRECTORS

PROGRAMME MANAGER

PO

TRANSPORT (DRIVERS)


PO PO

WASH COORDINATOR

OFFICE ASSISTANT

PROJECT ACCOUNTANTS

HEALTH & EDUCATION

COORDINATOR

PO

PROCUREMENT OFFICER

SECURITY (GUARDS)

VOLUNTEER AFRICA

COORDINATOR


38





CONTACT DETAILS



PROJECT AREA

MISSION

HAPA CORE VALUES

VISION



society.






with stakeholders.































SPECIALIZATION


Health


Education


Human Resource

Financial Capacity

Physical Assets

Ordinary Membership

Honorary Membership

MEMBERSHIP

Networking

Collaboration




AGM

EXECUTIVE DIRECTOR

BOARD OF DIRECTORS

PROGRAMME MANAGER

PO

TRANSPORT (DRIVERS)


PO PO

WASH COORDINATOR

OFFICE ASSISTANT

PROJECT ACCOUNTANTS

HEALTH & EDUCATION

COORDINATOR

PO

PROCUREMENT OFFICER

SECURITY (GUARDS)

VOLUNTEER AFRICA

COORDINATOR


39





CONTACT DETAILS



PROJECT AREA

MISSION

HAPA CORE VALUES

VISION



society.






with stakeholders.































SPECIALIZATION


Health


Education


Human Resource

Financial Capacity

Physical Assets

Ordinary Membership

Honorary Membership

MEMBERSHIP

Networking

Collaboration




AGM

EXECUTIVE DIRECTOR

BOARD OF DIRECTORS

PROGRAMME MANAGER

PO

TRANSPORT (DRIVERS)


PO PO

WASH COORDINATOR

OFFICE ASSISTANT

PROJECT ACCOUNTANTS

HEALTH & EDUCATION

COORDINATOR

PO

PROCUREMENT OFFICER

SECURITY (GUARDS)

VOLUNTEER AFRICA

COORDINATOR


40





CONTACT DETAILS



PROJECT AREA

MISSION

HAPA CORE VALUES

VISION



society.






with stakeholders.































SPECIALIZATION


Health


Education


Human Resource

Financial Capacity

Physical Assets

Ordinary Membership

Honorary Membership

MEMBERSHIP

Networking

Collaboration




AGM

EXECUTIVE DIRECTOR

BOARD OF DIRECTORS

PROGRAMME MANAGER

PO

TRANSPORT (DRIVERS)


PO PO

WASH COORDINATOR

OFFICE ASSISTANT

PROJECT ACCOUNTANTS

HEALTH & EDUCATION

COORDINATOR

PO

PROCUREMENT OFFICER

SECURITY (GUARDS)

VOLUNTEER AFRICA

COORDINATOR


41

Singida Fresh Oil Mill Contact:MinhaMohamed–assistantforSingidaFresh'sownerEmail:[email protected]

UndertheguidanceoftheHealthActionsPromotionsAssociation(HAPA),theteamvisitedtheSingidaFreshOilMill.TheyareasmallsunfloweroilproducerwithinthetownofSingida.ThefacilitywassetupverysimilarlytothefacilityatYAZAsunfloweroil,andwecouldseeproductionoftheproductandprocessing.Themanagementwasextremelyhospitableandgaveustwoboxesofsunfloweroil:acaseofsix3literbottlesandacaseoffour5literbottles.Weinsisteditwasnotnecessary,butwewereverygrateful.Sincewecouldnotbring44litersofsunfloweroilontheplanebacktotheUnitedStates,wegaveittoourfriendsatHAPAwhohaddonesuchawonderfuljobhostingusinSingida.

History• Beganasafamilybusinessin2010.• Ithasoutgrownthefamily• SunfloweroilisthemainproductinSingidaandnearbyregionsbecauseoftheclimate

ProcessingFacilityOperations• Currentcapacitytocrush50tonsofrawseedsperday• Whileotherfacilitiesmayoperateyearround,thesupplyoftheirseedintakeistoolow

duringsomemonthsandtheydonotoperateduringtheoffseason.o ~3months

• Oneoftheirobstaclesisavailabilityofsparepartsfortheirmachineso BoughtfromChinaandIndiao Cantakeseveralmonthstogetparts

• Whenthereisgoodsupplyofseedstheywillcrush24hrs/day• 20permanentemployees• 100employeesthatarenotpermanent• Sometimestheygetskilledworkers,butwillalsohireemployeesthatdonotpossessthe

skillsandrequiretraining• Steps:

o Cleaning–theyfinddirtandrocksmixedinwithseedso Pressingo Filtering–filterschangedonceperweeko Packaging

• Nobackuppower

SupplierNetwork• Challenges

o Qualityofseedsisanobstacleforthem! Governmentisworkingtoimprovethequalityofseedsbygivingfarmers

thegoodseedstogrow.! Governmentispro-industry

42

! TheirgoalistohelpTanzanianbusinessesbecomeanagri-businesspower

! Believethatgovernmentwillincreasetariffswhenindustryaskso Rainfallo Quantityofseedso Poweroutagesarecommonandtheplantmustshutdownwhenthepowergoes

out• Theyusesmallscalefarmerstobuyseedsfrom

o Farmersbringseedstothemortheyhaveagentsthatgoandgetthem• 2010–1000TZSfor1kgofseeds.60kgofseedsproduced25LofOil• 2017–2000TZSfor1kgofseeds.60kgofseedsproduceslessoil,around15L.• Onlypurchaseseeds,willnotpurchaserawoilbecauseofpurity

Sales• Demandcurrentlyfarexceedsupplycapacity• Qualityisdown,priceishigh• Distributeproductstocustomersinbulk• Customerscanalsobuydirectlyatthefacilitybutinsomecases,theywillshipproduct• Currentlysellseedcake,butinthefuture,willhaveanotherfactorytoproduceseed

cakeandturnintoanimalfeed• PackagingMaterialcomesfromDaressalaamandArushaaswellasMt.Meru• 3Lveryslowmoving• 5L–bestseller• 17kg–sellinMoshiandDarbutnotanywhereelse• PeakseasonAugusttoDecemberforproduction

FutureGoals• Next2-3yearstheyplantoopenanotherfactorywheretheycancrush300tons/day• Expandingbecausetheyhavehelpfromlocalbankandaregettingmorecustomers

SunflowerOilMarket• Whyisitgrowing?

o Peoplearebecomingmoreawarethatitisgoodfortheirhealtho Usedtocomeasanimporto Gooddemandandpublicityo GovernmentwillhelptoexpandoutsideofTanzaniao Offergoodbusinessforfarmerso Economywilldobetter

43

Yaza Sunflower Oil Processing (Halisi) Contact:YusefAmir(Factoryfounder)UndertheguidanceoftheHealthActionsPromotionsAssociation(HAPA),theteamvisitedtheYAZAsunfloweroilproductionfacilitylocatedabout60kmwestofSingidatown.ThefacilityexemplifiedsuperiorstandardsofoperationaswellasprovidedinsightonhowalocalSingidaresident,Yusef,buildaprosperingbusinessthroughhisownprivateinvestment.History

• Yusef,theownerofYAZA,startedinthesunfloweroilindustryasabuyingagentintheSingidaregionforotheroilproducers

• Bypersonalbankloans,Yusefoutfittedhisownoilpressfactoryandbegansellingin2015

• YonaJoram–YazaInvestmentCompanyAgconsultant• Openedplanttobeclosertofarmers,allowedhimtopayahigherpricethanMt.Meru

ProcessingFacilityOperations• Currentcapacitytocrush60tonsofrawseedsperday• Operatedyear-rounddespitethesunflowergrowingseasonlimitations• Twonewmachinesareonorderasdemandishigh• Seedcakeisaby-productofthecrushingprocessandisusedforanimalfeed• ElectricityfromTANESCOhassignificantlyimprovedoneortwooutagespermonth• Cornwasteusedintheboilerratherthanoil(expensiveorwood• Weightbridgebeinginstalledasincomingproductisweighed• Stepsofprocess

o Receivingo Cleaning:twoparts

! Bulk:removesrocks! Fine:removesdirt,builtonsite

o Pressing! Seedcakeiscaptureandpackagedforsaletoanimalfeedcompanies

(350shillingsperkg)! Pressingoccurs24/7exceptforscheduledmaintenanceandstepswhen

themachinesgettoohot–100totalemployees! PressesfromIndiarun$60k-70k

o Filtration–filtersarechangedeveryday! Sterilearea! Filtrationmachineisthreestorieshigh! Oilispumpedtostoragetanksoutsidetoawaitpackaging

o Packaging! Faucetsareusedtofillcontainers! Electronicweighingmachinesisusedtoensurecorrectamountofoilis

used! Qualityassurancepersonassignsexpirationdate

44

• Yield22to26%currently,40-46%ispossible

SupplierNetwork• SeedsarepurchasedfromSingidaregionfarmerseitheratthefactorylocation,or

throughbuyingagentsthattraveltheregioninlargetrucks• Higherpricesarepaidoutsideoftheharvestseason,sofarmersholdbackproductif

theycanafford• YAZAultimatelywantstohavesomeoftheirownfarmlandtogrowseeds,butthenext

stepistoenactcontractfarmingtoensurehighqualityseeds• YAZAneedstosupplyseedstofarmerssotheyarenotcultivatingrawproductfromthe

sameplantgenomeyearafteryear,whichresultsinpoorerqualityseeds• Only3%offarmersusemodernfarmingtechniques• TBSdoesnotallowrawoiltobepurchasedbycertifiedcompanies

o Rawoilisconsideredillegalforsale• Yazapurchasedtheirowntruckstotransportseeds• Limitedaccesstoworkingcapitalfinancing(workinglineofcredit)• Spokeoffarmersowning10acres,butonlyfarming2acres

Sales• Demandcurrentlyfarexceedsupplycapacity• Currentlyonlydomestic,refinedoilsales• FutureplanstosellinEuropeasorganic,naturalsunfloweroil• Sizessunfloweroilissoldinis1L,3L,5L,17kg,8.5kg(5Lismostpopular)• BigshopownershavebeentargetsbyYAZA• 2015–600shillingsperkilo• 2017–1000shillingsherkilo

o 1kgofoilsellsforabout3000shillingso 2015wasabadyear

• SalesinArusha,Dodoma,Zambia• Shelflifeofmostedibleoilsis1year• Largequantitiesofoilarepurchasedandresoldinruralareasinsmallerquantities

FutureGoals• Purchaselandtogrowtheirownseeds• Contractfarmer–Yazasuppliesbetterseedstothefarmer

o Yazawouldtill,planto Multi-cropthrashersbroughtintoleaveunwantedproductsbehind

• Usinggenerationalseedsprovidesreducingreturns

45

Equipment• YAZAcurrentlyoperateswith4ofthesepresses,whichappearedtopurchasedused,

whichallowsfor60tonofrawseedperdayproduction

• YAZArecentlypurchased2additionalpresseswithhighercapacityfromIndiaatroughly

$60,000-$70,000.Whenoperation,totalof6presseswillallowfor100tons/dayofrawseedproduction.

http://www.oilmillmachinery.com/

46

Mount Meru Oil Millers • AbsolutelynophotoswereallowedwithinMountMerufacilities.• MountMeru'soperationsstaffwerenotinformedwewerecomingbytheteamHAPA

coordinatedthevisitwith.Therefore,wewerenotprovidednamesorPOCe-mailsforthestaffweeventuallymetwith.

SalesandMarketing

• MountMeru(MM)makesrefinedsunfloweroilandsellsitdomesticallyunderthebrandsofSunola,Goldy,andFlora.

• MMsalesin3liters,5liter,&10literbottles,howevertheir10literand20literbottlesarethebestsellers.Weheardthisfromothercompaniesanditisbelievedthatthereiscustomervalueinthebucketsforfutureusewhilethebottlesarediscardedafteruse.

• Ordersfor2017areveryhigh.Allthreemillerssaidtheycannotfillalltheorderstheyarereceiving.Halisicommentedthatcustomerswithdeliveryagreementsaresendingtheirstafftothemilltosquatfortheirorders.

• MM'sprocesscreatesdryoilcake(DOC)byproductthattheyshiptoNairobiandIndiawhereprocessorsuseitasaninputinanimalfeed.MMhasnointerestinusingDOCtocreatetheirownbrandofanimalfeed.

• MMpreviouslytriedtoexpandtheirSingidafacilityintocottonprocessing,butthatinvestmentfailedasthecottonwastoo'dirty'toworkwith.Webelievethismetofverylowquality.

SuppliesofSeed

• MountMeru(MM)operationsaresolargethattheymustlookfarandwideforsunflowerseedtopress.Theystatedtheyfrequentlybuyseedasfaras500kmawayincludinginIringa,ShingayaandDodoma.ItisbelievedthattheothermillersgetmostoftheircakefromSingidaRegion.

• MMhasaddedadditionalsilagetoensurethatshutdownscausedbytheunavailabilityofseedisminimal.Theydidnotwishtorevealhowmanytonsofsilagetheyhave,butitwashuge.

• IntheslowseasonMMreceives4to5trucksadayofseed,howeverinhighseason(MaytoAugust)theyreceiveupto10trucksaday.

• MMiswillingtopayforhigherqualityseedsandhasinvestedinhelpingfarmerswithmixedresults:

o MMhastrainingclassestohelpfarmersimproveusageoffertilizer,seedandimproveharvestingtechniques.Theydon'tfeelthesehavebeensuccessful.

o MMgavehighqualityseedto10,000farmerspreviously.Theyobservedmanyofthefarmersselltheseedimmediately,andalthoughtherewerepurchasecontractsinplacesoMMwouldbethesolepurchaseroftheseedtheywereunabletoenforcetheseandtheybelieveHalisigotmuchofthehigh-qualityseed.

47

• MMstatedthe2017seasonhasgottenofftoaveryslowstart.TheplantmanageristravellingtoDodomaon17MaytounderstandwhyMMagentsaren'tbuyingseedasDodomaisusuallyoneoftheearlyharvesters.

o Theysuspectthatmiddlemenarebuyingalltheseedtoholduntilpricesrise.2017iswidelyknowntobeaverybadseasonforsunflowerssothereisexpectedtobeashortage.

Operations• MountMeruwasexpectingtoprocess200tonsofseedthedaywevisited,whichwasa

slowday.ThismadethemthelargestmillerwevisitedastheySingidaFresh'scapacitywas50tonsperdaywhileHalisiwasinstallingpressestoexpandtheircapacityfrom60tonsperdayto100tonsperday.MaxcapacityofMountMeruwasnotrevealedbutwebelieveittobemorethan500tonsperday.

• AsMountMeruissomuchlargerthantheothermillerswevisiteditisnotsurprisingthattheiroperationswerequitedifferent.

• HalisiandSingidaFreshusedthefollowingprocess:

Step# OilProcess ByProductProcess1) ReceiveSeed 2) CleanSeed Dirt,stone,&non-sunflowergrainsdisposedof3) PressSeedtoOil SeedCakePackagedforShipmenttoNairobi4) FilterOil 5) PackageOil 6) ShiptoCustomers

• MountMeruusedthefollowingprocess:

Step# OilProcess ByProductProcess1) ReceiveSeed 2) CleanSeed Dirt,stone,&non-sunflowergrainsdisposedof3) DeshellSeed Sunflowerhusksusedwithotherbiomasstofirethe

steamboilerthatrunstheplan4) PressSeedtoOil 5) SecondaryPressofOil SeedCakePackagedforShipmenttoNairobi6) FilterOil 7) PackageOil 8) ShiptoCustomers

• MountMeruhastwoadditionaladvantagesthatarenothighlightedabove:

1) MM'sprimarypressescanextractbetween28%to32%oilwhichishigherthananyoftheothercompanieswhichwerebetween18%to24%.

2) MM'sdoubleextractionprocessyieldsanother10%to15%oilwhichnooneelsewevisiteddoes,althoughitwasvisibleintheoilcakethatoilremained.MMwillpurchaseseedcakefromothermillerstouseexclusivelyinthesecondarypress.

• MMhasanimpressiveQAlaboratoryonsite.TheyroutinelyconductFreeFatAcid(FFA)teststoensureproductquality.Seed,oilandDOCaresampledtoensureeverythingisworkingcorrectly.

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• MountMeru'smanagementinSingidaareunderextremepressureastheyarenotcurrentlycoveringoperatingexpensesattheplant.

• MMreceivespowerfromTANESCObutoutagesareafrequentissue.Theyhaveaback-upgeneratorthatisincreasinglycostlytooperate.

TalentManagement

• MMhas100fulltimeemployeesattheplantandusedaylaborforsimpletasks.Upto200daylaborersarehiredduringthepeakprocessingseasontokeepthemillrunning24/7.

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Masasi Food Industries/ Lulu Contact:Charles–Owner/DirectorTheteamvisitedMasasiFoodindustriesinKimbahaoutsideofDaresSalaam.BahatisetupthismeetingforusthroughtheconnectionsbetweenUNIDO.TheyhaverecentlybecomecertifiedISO2000.ThevisitwashelpfultoseeacompetitorofDarshIndustries,atasmallerscaleandlearnabouttheirrewardsandchallenges.History

• Beganin2012.• Luluisbrandnameandnamedafterhiswife‘Lulu’• Entrancestrategywasonquality,butsufferingbecauseofpricesensitivityoflocals• Privateshareholders• Equityisfinancedbybank/resources

o Interestratesareveryhigh–22%

ProcessingFacilityOperations• Manufactureplasticbottlesandbottletheirownwater• Structure–3departments

o Technicalo Productionunit0-100%productiondonewithinfacilityo Marketing/selling/generaladmin

• Currentlyexpandinginwaterlineo Newcommerciallineforwaterproduction

• Tomatocapacityis2.5tons/hr• EquipmentisfromTurkey,China,IndiaandJapan

o Sparepartsareaproblem,sometimeswillstockparts• Lackingfoodsciencetechnology

SupplierNetwork• Tomatoes–June-August

o Pricesarehighatothertimesoftheyearforbuyero Duringoffseasonuseownmaterialthattheysaveduringtheseason

! Canbestoredfor18monthsinbagsthathavenopreservativeso BuytomatoesfromIringaandMorogoro

• BrokerProblemo Consideringstrategiestobypassbrokers

! Somefarmershaveagreedtobecontractfarmerso Issueofbeingabletotracewhereproductiscomingfromwhichinhibitsthem

frombeingabletoexporto Brokersadd50%+upchargeo Farmersgetluredintosellingtobroker

! Theywantmoneyimmediately! Needtofullyeducatefarmersonwhatpricestosellandwhatbrokersvs.

processorswillbuyfor

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• Mangos–southernpartofTanzania,Tanga,Tabora

Sales• Wateriseasiestproducttosell

o 90%ofsalesrevenue• Regionstheysellto:Mbeya,Mwanza,reintroducingMorogoro,usedtobeinDodoma

butcouldnotgetpeopletodistributeo Kenyaisdifficultmarkettoenter,verycompetitiveandprotectagainstothers

fromcomingin• Mostlocalpeoplecannotaffordtheirproduct

o Issueisincomeo Pricesensitiveo Willtrytocatertolowermarket

! ‘Poa’products–cheapertosatisfy! Willusesamebrandandlessexpensivepackaging–plasticinsteadof

cans• Wholesaletrade/distribution

o Ifyourproductisnotwellknown,theywillnotbuy• Retailerswillbuy–companyisjumpingoverthewholesale/distributorchannel

o Willtakesmallquantitiesofnewproduct• Marketisdictatingallpricing• Willofferspecialpricefordistributorsbecausetheybuyinbulk

o Volumemattersmostfortheirprofitability• Tomatopasteisnewproduct,anticipateittakingoverasmostprofitable

FutureGoals• Ownfarmsorcontractfarmers

o Lookingtoinvestinfarmstoproducetheirowntomatoes• Export

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AvomeruContact:Jess–FounderMarketoverviewandopportunitiesforAvocadooil.

• AvocadooilinTanzaniaisimportedproduct.• Therearelotsofavocadowithnomarketandlimitedaccesstodripirrigation.

Avocadotreesareplantedasshadetreesforcoffeeplantations.• 1greenavocadocurrentlygives9-13%oil(comparedto17-20%ofoilforMexican

avocado).• 110millionavocadosgotowasteeachyearinonevillageofLeguruki.

Currentbusinessmodel• Start-upbusinesssince2013byayoungTanzanian.Originally,hegotthesupport

fromhisfamilytostart,andthenkepthisbusinessrunningthankstotheseveralfundingsourcessinceinception.

• Avomerubuysrawoilfromfarmers,thenrefineittohighervalueoilinArushaandselltothedistributorinNairobi.Therefinedoilwillbesoldasingredientsforcosmeticcompaniesforsoapsandlotions.

• Avomeruprovidesmachinetothefarmers(30farmersgetonemachine).• Currentlocation:Legurukivillage,KingoriregioninEastArusha(2hoursfromArusha

toKilimanjaromountain).Heisbuilding3moresub-factoriestoexpandtheproduction.

• Capacity:UptoSep’17,Avomeruhasproduced8000litersofoil.Theyproduced6,800litersintheyear2016(priceat11USDperlitertodistributor),andplantoproduce18,000litersin2017withthepriceof18USD/liter.CurrentcapacityofAvomeruis1,800liters/day.

• Shelflifeforavocadosis2-3days,sotheymustbeprocessedtooiltokeepthevalue.Oilshelflifeis9months.

• TFDAcertificateisinprogress.• Currentfacilities:Twendabuilttherawoilextractingmachine,Avomerubuiltthe

refiningmachines(MITsupportthedryersandfiltersusedintheprocess)• Thereare2waystoextracttheoilfromavocado:dryingunderthesunand

decantingprocess(duringrainyseason)wherecornhusksaremixedwithavocadostodrythem.

• Partners:o AISEE:acceleratingInnovationthroughSocialEntrepreneurEnterprises.o InIDDSSummit,AvomerugotthesupportfromMITforprototypeofrawoil

processingequipment.VOCAisagroupofMITstudentswhoassistedinmakingprototypeforAvomeru.

o Echo:providestransportationsupporttogettothevillage.

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o TANEICT:fundingsourceof9,000USD.o USADF(USAfricanDevelopmentFund).Throughthisorganization,Avomeru

competedinYSELLIentrepreneurfundandgot25,000USD.• Fornow,Avomeruwouldneedafundingof350,000USDtobuildsupporting

infrastructure:warehouseandlogistics,officespace,ITsupport,employees.

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BrazAfric Contact:StellaTheGAPteamwenttoBrazAfric’sArushasaleslocationattheTFAshoppingcomplexinArushaonthemorningofMay9th.WemetwithStella,asalesAssociatewithBrazAfric.BrazAfric(BA)isaBrazilianbasedsmallagriculturalmachineproviderwhohasalsoexpandedtoprovideenvironmentalsolutionproducts(instantshowerheaters).Theirmaincompetitiveadvantageisthroughprovidingnewsmallfarmproductswithvariouspaymentoptions(cash,credit,installments)alongwithproductwarranties,training,service,delivery,andpartreplacements.Product

• BA’sAfricancentralofficeisinNairobi,whichisalsowheremostBA’sproductsaredistributedfrom

• 90%oftheiragriculturalmachineandinstantshowerheatersareimportedfromBrazil

• Mostoftheirproductsdealwithcoffeeandgrainproduction,buttheyalsosellsmalltolargesizegrainstorageequipment

• Fuelpoweredequipmentisamorecommonpurchasethanelectricalequipmentduetoobviouselectricityconstraints

PricingandPayment• Customerscanpayinfullwithcashorcredit,orhavetheoptiontomakeadown

paymentandpayofftheremainingbalanceininstallments• Commonfor50%downpaymentrequired• Ifpaymentsaremissedbyacustomer,BAisverylaxintheirenforcement,allowing

substantialtimeforthesmallfarmertomaketheirpayments.Theydonotrepossessequipment.

• BAalsoallowsforgrouppurchase,whichwouldbeidealforaclusterofhousesoragroupsharingfarmland

CustomerService

ItemName TotalPriceTZS(VATincluded) USDConversionFoliageShredderwithMotor(size80) 1,800,000 800$FoliageChopperwithoutMotor(size40) 750,000 333$CornThresherwithMotor 1,400,000 622$CornThresherwithoutMotor 1,200,000 533$PalmShredder 1,200,000 533$SorghumThresher 3,950,000 1,756$CoffeeMachine(size1) 3,700,000 1,644$CoffeeMachine(size2) 5,700,000 2,533$

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• BAprovidestrainingtofarmersthatpurchaseanyequipmenttobotheducatethemontheproductusageandpreventimproperusethatwouldleadtomechanicalfailure

• BAissuesaone-yearwarrantywithnewproducts• Afterwarrantyexpires,BAalsoprovidessparepartsandservicewithpreferenceto

completeserviceatthebuyer’slocationsotheycanalsoseeifanymisusecausedproductfailure

• IfreplacementpartsarenotavailablethroughtheArushaoffice,whichamajorityare,thenitcantake2-3weekstoreceivepartsfromtheNairobioffice,meaningafarmerisunabletoprocesstheircropsforthattimeperiod.

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Grain Post-Harvest Loss Prevention a Helvetas Project Contact:LugendoMseguE-Mail:[email protected]:255-756-279-888ProjectBackground

• Pilotstartedin2013andwascompletedin2014.Phase1startedin2014andwillbecompletedin2017.Phase2planwillbefinalizedin2018butHelvetaswillbemoreofaconsultancyforotherorganizationsthatwanttocompletesimilarprojects.Theyhaveatleastthreeorganizationstheyareassistingwithsomewhatsimilarprojects.

• ProjectmethodologymirrorsanotherHelvetasprojectthatwassuccessfulinSouthAmerica.

• Thiswastheonlyorganizationwefound,orevenheardof,workingonPost-HarvestLossPrevention.ManyorganizationsandtheGovernmentofTanzaniaareworkingonissueswithseeds,growthtechniques,andfoodprocessing.

• TargetedatsmallfarmerswhichHelvetasdefinedas3acresorless.Farmersthissizecanharvest6to15100kgbagsofcropperseason.

ProjectObjectives• Increasestoragecapacityforsmallfarmers.• Ensuremarketbasedstoragesolutions.• Post-harvestpoliciesandoutcomesareimproved.

Problem/CausesofLoss• Rootcauseisthatthemajorsourcesoflossarenottangibletothesmallfarmers,

definedashaving3acresorlessbyHelvetas.However,lossisestimatedbetween15%to40%bymostexpertsdependingontheareaandthecrop.Belowisasummaryofcausesofloss:

1. Manualprocessesarecommon;evenanimalpowerisnotused.Handprocessingcausesmorelossthanmechanicalprocessing.Thinkremovingcornkernelsfromthecornear.

2. Delayedharvestcausesloss.3. Transportationinwoodencartscreateslossasgrainsfalloutofthecartoverthe

sideorthroughholesbetweenboards.4. Dryingafterharvestisnot100%efficientasitiscompletedontheground.

Animalseatit,kidsrunthroughit,itblowsaway.5. Localgranariesdonotpreservergrainwell.Pests,fungus,smoochingcauseloss.6. Chemicals,suchasaceticacid,arecommonlyusedtohelppreservegrain.

However,dosagesandapplicationtechniquesarefrequentlyincorrect.Aceticacidneedstobereappliedafterthreemonthsandalmostneveris.

PhaseIOverview

• HelvetasprojecttargetedfourofthesevenregionsintheCentralGrowthCorridor.ThoseareManyara,Shinyanga,Dodoma,andMorogoro.Eachregionhadtwofocusdistrictsandeachfocusdistricthadninefocuswards.

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• Helvetasfocusedonfiveclusterstoinfluenceoutcomesthattiedtotheprojectobjectives.

1. Coordination&advocacythroughmulti-stakeholderplatforms! Ensuredpartnersatthenational,regionalanddistrictlevelwere

informedabouttheproject.! Partners:AgricultureNon-StateActorsForum(ANSAF)wasthe

implementingagencyforthenationalpolicyeffortandINNODEVConsultingCompanyLtd.wastheimplementingagencyforthedistrictpolicyeffort.

2. Awarenessraising,communication&farmerstraining.! Educationprogramonpreventionofpost-harvestloss.Usedprinted

media,radio,townpartiesandloudspeakersoncarstoraiseawareness.! MarketActorPartners:MpoliAgrovet,MringoAgrovet,KisusiAgrovet,

andPPTL.! OtherPartners:WomenandPovertyAlleviationinTanzania(WOPATA),

SmallIndustriesDevelopmentOrganization(SIDO),andINNODEV.3. ManufacturingofqualitysiloandotherPost-HarvestTechniques(PHTs)

! Hermitictechnology–Oxygenfreeenvironmentsthatdon’tallowinsectsandsomediseasestosurvivelongreducingloss.

! Standardplasticbagsareusuallyused(quotedat1500tshinArushamarket),butPICSbagsaredoublenylonbagsthatdon’tallowoxygenin.

• Quotedat5000tshperbag,howeveraquantitydiscountwouldbegivenattheArushaTFA.

• LugendosaidPPTLinTangaandAgrosideinArushaalsohavePICSbags.

• PICSbagsareaPurdueinventionthathasalargeinstituteworkingtofurtherdevelopthem.PICSbagsgenerallyonlylastforthreeseasons.

• PICSbagsarenotresistanttoanimals(rats,miceetc.)! Metalsilosarenotproducedcentrally,astheydamageeasilyduring

transportation.Localtinsmithsonlyneedtounderstandsolderingtomakethesiloswhichiseasytofindanditinjectsfurthermoneyintotheruraleconomiesandsupportslocalartisandevelopment.

• GPLPhasdesignsfor250kg,500kg,1,000kgand2,000kgsilos.• Metalsiloscanlastfor20yearsifkeptintheshade.• TheGAPteamsawahandfulofthesedrivingfromArushato

SingidainManyaraRegion.! TheblueplasticbarrelsseeninmanyGPLPmarketingmaterialsdidnot

gowell.TheywereintendedasanintermediatestepbetweenthePICSbagsandtinsilos,buttheywerefrequentlyimmediatelyrepurposedtouseforwateroncegivenout.

4. Accesstofinancialservicestobuy/producePHTs

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! Rangeofoptionsaregiventofarmers.TheyusuallyselectPICSbagsfirstandthenupgradelatertothemetalsilos.

! VillagecommunitybankspoolmoneytopurchasesilosorPICSbags.• Partners:SocialandEconomicDevelopmentInitiativesinTanzania

(SEDIT)andCenterforVICOBAMicrofinanceandEnterpriseDevelopmentLtd.(CEVEDE).

5. ActionResearch,MonitoringandLearning! Partners:FundforAfricanRuralInnovationPromotion(FARIP)&

InternationalInstituteofTropicalAgriculture(IITA).• Oneprojectofficerisassignedtoeachofthefiveclusterstomanagestakeholderand

partnerinvolvement.• KeylessonlearnedfromPhaseIisthatwhateveristaught,providedorcoordinatedfor

probablywillnothappenthatplantingseason.Itwillprobablyhappenthefollowingseason.

PhaseII

• Willbefinalizedin2018basedonfundingavailableandlessonslearned.• Intentisnottoexpandtootherregionsbutfocusmoreoninfluencingkeyactors.Here

aresomeexamplesoftheirthoughts:o “Crop-In”otheractors–Seeifactorsmarginallyinvolvedintheprojector

outsidetheprojectadoptsomeprinciplesoftheprojectbasedonitintendingtobeverymarketbased.

o Showcasing–Focusonexhibitionsandstorytellingoftheproject’ssuccesses.o EstablishaCenterofExcellenceforknowledgetransferandallowthemarketto

driveadoption.Focusonmakingsuccessesavailableandtransferrabletoothers.! Oneotherorganizationisrunningasimilarproject,butissubsidizingthe

purchaseofthesilostospeedadoption.WarehouseReceiptSystem(WRS)

• WeaskedLugendoabouthowtheyconvincefarmerstostoretheirharvestandwaitforbetterprices.Hestatedmostofthefarmerssellatthelowbasedoncashneeds,notduetoignoranceorbullying.ThenhewalkedusthroughtheWRSsystemGPLPhashadsuccesswith.

• GPLPset-upaprogramwithmicro-financelendersandfarmersforaWRSthatwasembracedbybothparties.Fundamentallyhereishowitworked:

1. Themicro-financelenderwouldprovidethefarmera‘loan’withtheharvestascollateralatthecurrentmarketvalue,generallytheannuallowpoint.

2. Theywouldplacetheharvestinaduallockairtightcontainer,wherethemicro-financeagentandthefarmerwouldeachgetakey.

3. Aspricesrosethefarmerandthelenderwouldnegotiateandagreeonthebesttimetosellthe‘collateral’(theharvest).Generally,thefarmerandlenderagreedtosellwhenthevalueoftheharvestwas75%to100%greaterthantheamountrepresentedastheprincipalontheloan.

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4. Thelenderwouldcollecttheirprincipalrepaymentandinterest,generally20-25%ofthevalueoftheprincipal,whilethefarmerwouldgettheremainingmargin.

• Thissystemhadtoancillarybenefitsasmicro-financenowhadthescaleinsmallvillagestoextenditsreachtoareasthatformerlydidnothavethedemandavailabletosupportaMFbranch.

1. HelpseducatepeopleaboutMFsotheyaremorecomfortableusingMFforlargerpurchaseswithlongerrepaymentperiods,suchaspurchasingmetalsilos.

2. TheMFbrancheswouldbelookingforworkinnon-peakperiodsandareincentivizedtoworkwithpotentialentrepreneursonsettingupoutofprojectscopebusinessesthatwouldfurtherexpandtheeconomicopportunitiesavailablewithintargetvillages.

ValueofCropsintheCentralGrowthCorridor

• MaizeandsunflowerseedswerethetwocropsmostcommonlydealtwithduringPhaseIbyGPLP.

• MaizepricingisverylowduringtheharvestbuttendstograduallyriseuntilDecember.o MaizepricingislowfromJunetoAugust.o InDecember,theforecastsofrainarereleasedforthenextseasonandifadry

yearisforecastedthepriceofmaizewillriseincrediblyquickly(doubleinlessthan30dayshasoccurred).

• SunflowerpricingislowfromJunetoAugust,butrisesthereafter.o Howquicklythepricerisesdependonthequantityoftheharvesttheprioryear

andtheexpectationsfortheharvestthefollowingyear.o Sunflowerseedpricesaregenerallyrisingasdemandforsunfloweroilincreases.o However,theriskforaflatoxinisalsoincreasingwithinthesunflowercrop.This

iscausedbyimproperdryingoncetheseedsareremovedfromtheflower.Howdoesthistranslatebacktoincomegrowthinruraleconomies?

• Threeways:o Farmerssellforhigherprices.o Farmershavemoreharvesttosellaslessislostduetospoilageorpoor

techniques.o Metalsiloconstructionlocallykeepsandinjectsmoneyintothecommunity’s

economy.Notonlydoesthissupportlocaltinsmiths,butisalsoincreasestheavailabilityofworkfordaylaborers.

MiddleManRubric• NinaNehimbiandLugendoagreedthattherearethreerootcausestosmallfarmers

sellingtomiddlemen.

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Small Industries Development Organization (SIDO) Arusha office Homeaddress:UngaLtdAzimioArea,SIDOEstateP.O.Box1278,Arusha,TanzaniaTel:+255272502842,+255754778360,+255716187777Contactperson:RegionalManager,NinaH.NehimbiEmailOfficial:[email protected]:[email protected],[email protected]

• ManyregionalofficesinmainlandTanzania.• Fourmainservices

o TechnologydevelopmentforSMEs! Adviseontechnology! Seewithin/outsideTanzaniatodeveloptech(e.g.machinetech)! Incubatorprogram(graduatesupport):incubateSMEs→graduate→

otherbusiness! Tourismcluster

o Training! Entrepreneur,business,finance(credit)! Kaizen(improvement)consultation! OneDistrictOneProduct(ODOP)strategy(e.g.milk,mayflowerand

anotherinArusha)o Supportingmarketinginformation

! Marketinginvestment! ThereareinformationcentersatlargeSIDOoffices! Freetousetheinformation! Promotingproductmarketingtools! Linkingorganizations(farmers,businesses,localgovernmentsetc.…)

o Financialservices! Creditservice(e.g.forpurchaseofbigmachines)! Max6.5millionloan! Introduceotherfinanceorganizations(e.g.banks,government

organization)SmallandMediumEnterprisesSupport,MUVI(MuunganishoUjasiriamaliVijijini)project

• Supportdevelopmentofvaluechainsincreaseruralpeopleincomesandreducepoverty.• Targetruralentrepreneurs(includingruralpoor,womenandyouth)toimprovetheir

skills,knowledgeandaccesstomarkets• CoverssixregionsofTanzaniamainland:Mwanza(paddyandcassava),Manyara

(sunflower),Iringa(tomatoandanother),Ruvuma(cassava),Tanga(citrusandsunflower)andPwani(pineappleandcassava).

• Supportnottouseillegalbrokers• NownextMUVIproject(MIVARF)ongoinginArusha(Maize)• Oneofthepainpointsoftheprojectsisinfrastructure

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Unga Wa Uwele Flour Mill, Arusha SIDO Complex Name:Edna–DirectorEmail:[email protected]:255754278149Background:

• UngaWaUwelemillsoversixdifferenttypesofgrainintoflour.TheyprovideHanhwithabrochurethatliststheircompleteproductlist.

• Theyhavesometypeofdemandforecastingcapabilityastheystatedthatdifferentfloursareindemandthroughouttheyear.Theymillbasedoncustomerdemandandnotbasedoninputcost.

• TheyhaveoutgrownSIDOfacilitiesandSIDOroutinelyraisestheirrenttogetthemto‘graduate’toamorepermanentfacilityoutsideoftheSIDOfacility.ThiswillallowSIDOtohostalessmaturecompanythatneedsmoresupportinUwele’sspace.

o Mostimpressively,theystatedtheyknowwhatdemandwillbefilledwithcomplementaryproductsandwhatdemandwillstaystagnantinthemarketuntilitismetbyaspecificmanufacturer.

SourcingofEquipment

• AllequipmentwasIndianmadeexceptforthedryerunitwhichwasUSmade.o ThedryerwasmadebySukupManufacturingoutofSheffieldIowa

• Allequipmentwaspurchasedfromthemanufacturerandshippedvia3PLstoArusha.• Theydidnotwanttodisclosethetotalcostofequipment(CAPEXrequired)tous.

Operations• ProcessStepswithintheFlourMill

1. ReceivingGrainsfromFarmersorotherVendors2. Destoning/Cleaning–Removesstonesandlargedirtpieces.3. DehuskingtheGrain4. HandWashing–Theonlytotallymanualstepallotherstepshavesomelevelof

mechanization.5. Drying6. AirCleaning–Removessmallresiduesandothergrains.7. Milling8. Cooling9. Packaging10. Distribution–Somedonein-houseandsomethroughdistributors

• Steps7to10arecompletedwithinthewarehousethatisroughly10mx70m.Steps7to9havecontaminationconsiderationssowewerenotallowedpastalineinthemillingroomtoavoidcontaminationoftheproduct.TheseseemedtoberequiredtomeetsomeTBSprotocolorstandard.

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• UwelehasaQAprocesscalledHazardAnalysis&CriticalControlPoint(HACCP)whichtheysaidwasaninternationalstandard.Randomsamplingusedtocheckonthefollowing:

o E-Colicheck–Checksqualityofgrainsupplieso Metalscheck–Checksbothqualityofgrainsandmachinemaintenance.o Oilscheck–Toensuremachinesarebeingkeptclean

• Theyprovidelunchforemployeesasifemployeesarefreeforlunchtheytakealongtimetoreturnanddonotreturntogether.ThisappearedtobecommonwithintheSIDOcompound.

• Theyonlyrunoneshiftperdayfrom8amto5pm.• 30employeescanmill30tonsofflourpermonthonaverage.

Other• TourwasprovidedbytheQAmanager• Theyhavenodedicatedsalesstaff.Hemanagerhassalesgoalsandtargetsclients

outsideofworkinghours.• Theybuyinputsduringtheharvestingseasonandstorethemuntildemandforthe

productthatrequiresthatinputpresent.

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SANLITA Products, Arusha SIDO Complex Contact:JalitaBackground

• Seemedtobeasuccessfulmanufacturerinthepast,buthadtoswitchproductsduetospikesininputprices.

• Seemedliketheywantedustoseethebusinesstoinvestinit.

SummaryofOldBusinesses• Usedtobeajuicemakerandconfectionarybusinessbutthepriceofwhiterefinedsugar

spikedtwoyearsagoandturnedthebusinessunprofitable.• Dabbedinthejewelrybusiness,buttheirmechanicallycreatedproductscouldn’t

competewiththelowcostofhandmadeproductsinTanzania.• Playedaroundwithcosmeticsbuttheyneverdevelopedbrandrecognitiontocompete

againstforeignmadeproducts.

CurrentBusiness• AnimalfeedmakerusingSIDObuiltequipment.Theyequipmentwasrickety,entrylevel

tobePC,butitclearlyworkedandsourcingpartsorcoordinatingrepairshasneverbeenanissue.

• Makeschickenfeedwhichisacostbasedbusiness.Therearelotsofmanufacturersandmostcompeteonacostadvantage.Sanlitamakes:

o Startersproduct–Finerandfortifiedwithvitaminsforthechickso Finishersproduct–Course,andusedtofattenadults.

• SANLITAisthecontractmanufacturerfordogfooddevelopedbyavetinArusha.Salesdemandishigh,butSANLITAandthevetarewaitingforTBSbeforetheycanexceedacertainthresholdofproduction.Theyseemedtoknowwhatthatmarkwas,butitwasnotcommunicatedtotheGAPteam.

• AttheendofthedayitseemedliketheyareawaitingTBSapprovaltogobigwiththemanufactureofthedogfoodandtheymustsustainthemselvesbeingthecontractmanufacturerofthatuntiltheycanfiguresomethingelseout.Itdoesn’tappearthattheyhaveafollow-onideaoncethedogfoodmarketplateau’s.

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Swedtan Meat Processors, Arusha SIDO Complex Contact:TonnyHannsonE-mail:[email protected]:255-753-118-963or255-764-697-063Background

• TonnylivedinTanzaniainthe1980sandearly1990swherehemetandmarriedhisnowwife.Inthe1990stheydecidedtomovebacktoSwedentoraisetheirchildrenandreturnedtoTanzaniain2011or2012.

• Tonnyseemstohaveverypoorbusinesssense,sohiscompanywillprobablyfailalthoughheseemstohaveagreatproductandthemarketpotentialisthere.

• Tonnywasclearthathedoesn’tknowhowmuchlongerSwedtanwillsurvive.

MarketingandSales• Swedtan’smarketisprimarilyZanzibarandsafarilodgesashisproductishighly

differentiated.AllSwedtanprocessedmeathasaScandinavianflavortoitthatisdemandedbycompaniescateringtothetouristmarket.

o Zanzibar,especially,isinhighdemandofqualitymeat.Priceisnotalimitingconsiderationformostbuyers.

• MeatisinhighdemandinDar,DodomaandthegeneralArushamarketaswell,butthatseemstobemoreofacostdecisionandhaslessroomfordifferentiation.

• MostsausageinArushaisimportedfromKenyawhichisextremelyexpensive.• Tonnydoeshisownmarketinglikelybyallowingcustomerstotryalittlebitofhis

productsforfree.

InboundandOutboundLogistics• TonnylocatedinArushalikelybasedonhiswife’spreference,howeverheprobably

thoughtthemeatprocessingbusinesswasagoodcandidateforArushabasedonthelargeMaasaipopulationandtheirtraditionaloccupationasherders.

• AfterproductionTonnymustflymostofhismeattohiscustomerssothatitarrivesfresh.Thisisenormouslyexpensiveandthepricevariesbasedonthedestination,althoughhehasenoughscaletoZanzibarthathispricesshouldnotvaryorbesurprisingtohim.

• ShipmentstoZanzibarrequireanexportlicenseandimportinspection.Thisaddstothecomplexityandtimeassociatedwithnewproductdeliveryandthelikelihoodthatproductshippedmaynotarrivefreshtothecustomer.

PainPoints

• Tonnyrecentlyhadtoreduceheadcountfrom15to7employeestoinfrastructuredifficulties.

• Tonnyhashadtroublegettingcustomerstopayontimewhichhasstressedhisavailablelinesofcredit.LOCsalreadyrunbetween20%to23%.

• Hisstaffburnedoutthecompressorsononeofhisfreezerssoitisnownotoperable.

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• TANESCOwasconductingmaintenanceonthelinethatfeedshisshopandsentanelectricalsurgethatburnedoutanotherfreezer.

o Thetotallossoftwooffourfreezerswasbad,butwillonlycost$2ktoreplace.ItisunknownwhyTonnydoesn’tseekoutmicro-financetofundrepairs.

o ThelossofinventorywaslikelyagreaterblowtoSwedtanasmuchofthatwaslikelypurchasedonlinesofcredit.InterestratesonLOCsrunbetween20%to23%.

• ThetaxsituationissomethingthatseemstoperplexTonny.o Swedtanistaxedasaforeignentityalthoughitisdomestic.o Newtaxesseemtoappearoutofnowhere.o Taxauthoritiesdon’tuseaP&Ltodeterminetaxlevels.ToTonyitseemstobe

basedonavailablecashonhand.o Taxesareoccasionallyclaimedbyforce.o Hebelievestaxauthoritiesfollow-uponwhiteownedcompaniesmore

frequentlythanblackownedcompanies.• Equipment

o AlmostallequipmentwasprocuredinSwedenandshippedvia3PLstoTanzania.GivenTonny’sbackgroundthisisprobablynotreplicablebyothers.

o Roughly$400kinCAPEXwasrequiredtolaunchSwedtan.o $2kisrequiredforallrepairsinthefacility.

• Othero TonnyandhiswifebelievethatTanzaniahaschangedextensivelysincetheyleft.

Peopledon’tknowhowtoworkandarenottrustworthy.Hebelievesthisistiedtotheremovalofmandatorynationalservice,wherehiswifeclaimsTanzanian’slearnedhowtowork.

o Tonnythinksthegovernmentactivelyanddeliberatelyimpedeseconomicprogress,especiallyinthetourismsector.JustinbelievestheissuestobealittlemorecomplexthanhowTonnyexplainedthem.

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Small Industries Development Organization (SIDO) Dodoma office Homeaddress:P.O.Box461,Dodoma,TanzaniaTel:+255262321173,+255754098940,+255715/782098940Contactperson:RegionalManager,AbelXavieryMapundaEmailOfficial:[email protected]:[email protected]

DiscussionofSIDOroles(seethereportofSIDOArusha)FeaturedactivityinDodomaregion

• Technologysupport:e.g.supportforrazormachinefromUK• Assistingbusinessskillsforfoodprocessing• Supportmarketingactivities;facilitatingtheexhibitioninKigomaregioninwhichsome

financialorganizationsandSMEstenantsothatthesecompaniesandattendedcompaniescanbeconnected.

• 20companiesexhibitedintheeventlastyear.• FinancialassistanceforSMEs;grouploans,individualloans(maximumfivemillionTZS)• IfthemaxisnotenoughSIDOconnectstheSMEtootherfinancialorganizations.• 27companiesoperatingintheSIDOestateinDodoma:e.g.carpentry,foodprocessing,

wine• SIDOdoesnotactivelyfindcompaniestobesupported:manycompaniesvisitedSIDO

andSIDOchoosesfromthem• ForadvertisingtheSIDO,ituseslocalradio• Toevaluatecompaniestobesupported,thereisnocriterionbutaformtobefilled• Dodomaregionissuitabletocultivatesunflower(notsomuchrainfallneeded),SIDO

supportingtheprocessingtechchange.• AssistingtechchangeisoneoftheprimaryactivitiesforSIDODodomasuchasfor

Manyararegion• Dodomaissunflowercenter• ThereistheheadquartersofSOBAcompany,amanufactureroffoodprocessing

equipment.• SIDOhastheconnectiontoSOBAandeasytoconnecttoit.• Sunshinecompanyboughtupsunflowerseedslastyear,leadingtheshortageofthe

seeds.• Poporegion:casaba,groundnuts• Katocompany:wineproducerinthedistrictofSIDODodoma,whichfoundedbyItalian• Winebusinessisnotsuccessful

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Bahati/Mabibo Market Meeting TheteammetBahatiattheMabiboMarkettolearnfromtradersaboutthemarketprocessandagriculturebusinessinsightsinTanzania.WefirstdiscussedwithBahatisomeofthechallengesfarmersandtradersfaceandwhataresomeofthestepstheyneedtotaketobesuccessful.Followingourdiscussion,wewentintothemarketandmetwiththemarketdirectorLazaro,whooverseesalltheactivity.BahatiNotes:

• Increasetechnologybeforeincreasingproductivity• Educateontechnology• Landbelongstothefarmers,notthegovernment• Tryingtoshiftfarmerstocommercialfarm–makingagricultureabusiness• TAHAhassimplifiedsomethingsforthembysettingupthepossibilitytofindbuyers

throughtheirpone

LazaroNotes:• Sellerscomefromallover• Wholesalemarketing• Costs50,000Tshpertruck• 500Tshperdaytosell• Farmersalreadyknowwhoisgoingtobuy• Busiesttime:December• Nominimumproductneededtosellhere• Mabiboisbiggestmarketinthearea• Tomatoismostdemandedproductandinhighsupply• Bananasareverystable

67

Natural Extracts Industries PointofContact:AartiMahajanThreemembersoftheteamtraveled2hrstoMoshi,intheKilimanjaroRegion,onMay10thtovisitwithNaturalExtractsIndustries.WemetwithAartitodiscussNEIbusinessmodelandvaluechainaswellKibunjewhogaveusatouroftheirproductionfacilityanddiscussedtheiroperationsandR&D.

NEI’sstrengthliesintheircontinuouslyevolvingintegratedvaluechainandbeingabletotakeonthefinancialandoperationalriskofproductionwhilestillprovidingvaluetoindividualfarmersthroughhigheradditionalincomeandoutreachprograms.

Sales• NEIistheleadingnaturalflavorproviderofEastAfrica• 85%ofNEI’sbusinessisthroughbulkwhitelabelsalestoUnitedStatesandEurope

o Unabletoobtaincurrentcustomerlisto Lessriskyandfastero Retailmarketisnotverysustainable

• 85%ofsalescomesfromVanillaExtractSales• Brandedproductsas“EpicuriousHedgehog”(seepicture)• Domesticsalesaredifficultbecausebakingandflavoringisnottraditionallycommon• NEIiscurrentlynotprofitable,unabletoacquiretheirforecastedprofitabilitytimeframe

Product• Allpackagingmaterialsarelocallysourcedandmostlyrecycledmaterials• NEIstrategyistostartsocially,withastorybehindtheirproducts,thenbuildtrytobuild

profitabilityaroundthat• Alsoacostsavingmeasure• Vanillapodsaregraded,andpaidbasedongradelevel• Only1%ofvanillaintheworldisnatural• GourmetBeans–highqualityvanillapods

o Qualityisdefinedbysizeandhowgreeno Lowergradevanillabeansareusedforextraction

Supply• NEIownsnofarms• Theycurrentlyobtainvanillaplantsfromanetworkof1550farmersthroughoutthe

KilimanjaroandMorogoroRegion• CurrentNEIvanillaextractdemandis10metrictons,buttheyareonlyabletosupply1

metricton• Fromplantingtomatureharvesttakesthreeyears• NEIsubsidizes80%ofvanillaplantstofarmers• Lowsupplierpower–investinginfarmers

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Operations• Farmer“champions”recruit,train,andmonitorfarmersbutarenotemployeesofNEI

o NEIpays$2pertrainingperfarmer,$1perfieldvisit(requires6peryearperfarmer),andanunknowncompensationforeachfarmerrecruited

• Smallgroupoffieldagents,employeesofNEI,overseechampionsandtheirfarmers• NEIhiresparttimecollectionagentsduringharvestperiod• Logistically,trucktransportiscontractedasneededtomoveproductfromcollection

pointstoprocessingfacilityo Farmershavelittleresponsibilitytotransportfar

• VanillapodsharvestedfromJunetoNovember,whenfacilityutilizationishigh,DecembertoMay,facilityutilizationislow

o Havegoneintomakingextractsfromorange,coffeebeans,cocoa,andcinnamontoprovidemoreworkopportunityduringthevanillaoffseason

• Highbarrierstoentry

FacilityOperations• Productionandofficeinonebuilding• ProceedwithsafetyprecautionsperTanzaniaFoodandDrugAuthority(TFDA)• Separateshoesinsideandoutside

ResearchandDevelopment• CurrentICTdevelopmenttoimprovetraceabilityandforecasting• In-houseresearchfacilitytodevelopnewproductsandtestproductquality

FutureGoals• Lookingtomakevanillasugar• Partnerwithmoreorganizationsincreasefarmernetworkeachyear• Localfoodmanufacturers• Improveeconomicstabilityincountry• Organiccertification• Securingfundingforexpansionoffacility

FarmerRelationship• Seedlingsaresuppliedtofarmersat80%subsidy(20%costtofarmers)• NEIbuyssnippedseedlingsfrommaturevanillaplantsfromitsfarmerstobeableto

supplynewfarmerswithseedlingsat$2perseedling• NEIviewsitasapartnershipduringthelabor-intensivevanillafarmerprocess• Farmersarepaidimmediatelyupondeliveryofvanillapods,instantgratification

Seedlingsubsidy(perplant,100,000distributedin2016) $1.60ChampionConsultation(per,amountunknown) $2ChampionFieldVisit(6perfarmer,peryear) $1

KnownCosts

2016 2017(expected)NumberofFarmers 1550 2350Revenue $100,000 $270,000

UnkownCostsFieldAgentSalaryPartTimeCollectionAgentSalaryProcessingFacilityStaffSalaryLogisticsCostsCOGS

69

ProcessingFacilityEquipment• ShanghaiUniversalPharmaceuticalMachineryMiniAutoLabScaleExtractor&

Concentrator• $13,000-$20,000basedonsize• WereinstalledbyNEIstaff,notspecializedinstallationrequirements

• NEIhasoneMTD-100andoneMTD-200intheirfacility

Extractionvolume(L) 20 50 100 200 300 500

Concentrationvolume(L) 20 50 100 200 300 500

Workingpressureinjacket(MPa)

Workingpressureintank(MPa)

ExtractTempreture(ºC)

Medium

Vacuumpumpmodel SK-0.4 2X-2.2KW 2X-2.2KW 2X-3KW 2X-3KW 2X-4KW

Electricpower(kw) 0.37 0.37 0.37 0.37 0.37 0.55

Tempreturescope

Totalelectricpower(kw) 6+6 12+12 15+15 18+18 24+36 36+48

Material

Model

<0.1Mpa

UsualpressureorNegativepressure

40-100

Steam/Hotoil

0-200ºC

Stailesssteel

MTD-20 MTD-50 MTD-100 MTD-200 MTD-300 MTD-500

70

Works Cited "AboutUs."AfricanFoundationforDevelopment.Web.

GlobalWaterInstitute.TheFranchiseModel.http://globalwater.osu.edu/files/OSU-Tanzania-

"M-Farm."M-FarmLtd.Web.

Mason,Ben."HabariMazao?SmallholderFarmersinTanzania."BetterplaceLab.

OSHA."OccupationalSafetyandHealthAuthority.Web.

Project-Franchise-model-concept-paper-4.2-forweb-ENGLISH.pdf"Raising

Capital."TechnoServe-BusinessSolutionstoPoverty.Web.

TanzaniaRevenueAuthority.Web.

"TFDA."TanzaniaFoodandDrugsAuthority.Web.“TheIFOAMNormsforOrganicProduction

andProcessing."IFOAM(2014):Web.

“U.S.RelationswithTanzania."U.S.DepartmentofState.U.S.DepartmentofState,01Nov.2016.Web.

post-harvest food processing …globalwater.osu.edu/files/agribusiness_tanzania_web.pdfthe ohio...

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