Markets for Smallholder Cassava Production

• Focus: Smallholder Cassava production in Asia

• Production & Trade: Global and Asia

• Smallholder options for utilization and sale

• Market dynamics & farmer strategies

• Recommendations ? .....The ways forward ? ...

Biofuel is not the focus – but clearly a consideration

Warning Note: Quality of StatisticsProductionFAOSTAT and National statistics • China: Provincial statistics are much higher

TradeFAOSTAT and others• Combine categories differently• Include some but not all products

Global Production of Cassava

Asian Production of Cassava

2007 Exports• 6.5 million t dried cassava (chips, pellets, etc.)• 1.6 million t starch• <25 million t fresh root equivalent (~11% global production)• 75 % from Thailand (90% of starch, 70% of chips)

15% from Viet Nam (20% of chips)2007 Imports• 62% to China (~70% of chips, 45% of starch)• 18% to Western Europe (~25% of chips)• 15% rest of Asia (40% of starch)

Global Trade in Cassava Products

2009 Exports Large change in 2 years• 8 million t chips• 4 million t starch & flour• ~39 million t fresh root equivalent• 67 % from Thailand (90 % of starch, ~50 % of chips)

26 % from Viet Nam (44 % of chips)

2009 Imports• 68 % to China (>85 % of chips, 40 % of starch)• 32 % to rest (60 % of starch)

Global Trade in Cassava Products

Demand:• China: expects to double consumption in 5+ years• Currently imports 60% of consumption• Even if domestic production doubles, importation will double

Supply:• ~ 25% of current Viet Nam export of chips will be required by

bioethanol plants under construction• Depending on policies and prices, similar in Thailand?• Huge opportunities for other producers – in Asia ... and in SSA?

Likely changes in Global Trade in Cassava ?!!

• ~ 4 million ha producing ~75 million t• Dominated by smallholders:

Estimated 8 million farming households, average 0.5 ha/farm• Indonesia: ~3 million HH 0.4 ha/farm• Viet Nam: ~2 million HH <0.3 ha/farm• China : ~1.5 million HH <0.3 ha/farm• Thailand: <0.5 million HH 2.5 ha/farm• Some larger estates/companies

• 50+ % using modern “industrial” varieties80% in GMS; Large area under one variety

Production in Asia

• On-farm /domestic use

• Sale o Range of methods oWide range of products/value chains

“Market” options for Smallholders

• Staple food- food and snacks in Indonesia and East Timor- some ethnic minority groups in mountainous SE, E, and S Asia

On Farm Use

Human Consumption of Cassava

• Staple food- food and snacks in Indonesia and East Timor- some ethnic minority groups in mountainous SE, E, and S Asia

• Emergency or occasional food- coping with rice shortages- when working in the field- artisanal noodle production

• On-farm use for animals- roots & leaves- wilted, dried, ensiled

On Farm Use

• Fresh Rootso food or local snack food processing

- relatively low volume, high priceo Processing for foodstuffs, feed, starch, modified

starch, biofuel, etc. …… including chips

• Dried roots/chips (on-farm)o For on-farm useo If limited access to markets / traders

Market options for Smallholders

o Eating varieties - quality (most “industrial” varieties = low acceptability) - price expectations

o Processing varieties - payment on starch content (combine yield and % starch)- greater product differentiation may reduce flexibility

o Range of processors – size and value chain- artisanal, small, medium, large- chip exporters, feed, starch, modified starch, bioethanol, … - differs by location and between countries

Flexible market options for Smallholders

Price variability

Prices with local traders / collectors vary more widely – often much lower!

Processors require:• Near-continuous supply

- multiple feed stocks- storage (dried, wet starch, reduced PPD)

• Low but economic prices- need to improve and maintain profitability for smallholders

Feedstock supply to Processors

Chipping by smallholders or local collectors:• Promotion of a range of effective chipping and

drying apparatus• Adds value and flexibility

Value adding possibilities

Pre-processing at or near production site:• Adds value and flexibility• “Waste problem” becomes a benefit

- Residues for animal feed- Waste water for irrigation

• Social policy for rural employment and industrialization, and reduce move to cities

Value adding possibilities

Forms of Pre-processing:1. Production and storage of wet starch

2. Initial fermentation to mash (pre-distillation)

3. Mini-factories for starch / flour- mobile (probably unnecessary)- transportable

Value adding possibilities

• Labour productivity- harvesting tools, etc.

• Agronomy / management- pest and disease management- much of the benefit of germplasm attained- likely further gains through agronomy(fertilizers, erosion control, cropping systems, planting density &/or time to harvest, ...)

• Credit/inputs and appropriate contracts

Productivity / Profitability

• New germplasm- pest and disease resistance- new starch qualities- higher starch yields (even with high moisture)- decreased PPD- plant type for higher planting density- Roundup-ready varieties ........

• Need to avoid too much specificity that narrows market opportunities

Productivity / Profitability

• Cassava has proved to be a good crop for economic development for the poor

• Requires facilitation of links to markets• Requires support for improved production

and processing (increased R&D support)• Requires the right policies (pro-poor social,

environmental, and biofuel policies)Cassava can be a major pro-poor bioenergy crop

Conclusions