Grain Legumes and Green Manures for Soil Fertility in ... - cimmyt

Transport costs
Competitiveness is eroded by high transport costs
and the short time available to buy the crop, move it
to export centers, clean, pack, and 'ship grain to the
markets before the export window closes. Because
of poor infrastructure and short timing there is a
need to ship large quantities of pigeon pea to export
centers at the same time that either commodities
such as cashew nuts and tobacco are being transported.
Transport costs are high because roads are
bad (high vehicle .depreciation and operational
costs) and because few transporters operate, and set
monopolistic prices. For example, transporting pigeonpea
from Babati to Dar es Salaam cost 42,000
TSh/t, the same as shipping costs from Dar es Salaam
to Mumbai. Transport from Tunduru to
Mtwara takes 24 hours to travel 265 km and is more
expensive than sending goods fro~ Dar es Salaam
to Durban. It costs US$ 95/t to transport pigeonpea
by road to South Africa from Malawi for transshipment
to international markets. If· Nacala port in
Mozambique worked, transport costs would be only
US$23 / t. Traders reported that failure to deliver
products in time results in renegotiation of contracts
and heavy financial losses.
Lack of information
Industry, exporters and farmers often lack information
on production and quanUty available for sale in
different areas, prices offered and quality standards
demanded by different buyers, and transport options.
Because of the lack of a market information
system, there is high price uncertainty, which
makes it difficult for exporters to procure pigeonpea
and discourages farmers from investing in pigeonpea
production as they do not what prices they will
get. Because of lack of information, farmers, middlemen
and large traders engage in strategic bargaining,
further increasing transaction costs.
Attitudes towards traders
There are negative attitudes towards intermediaries
and political rhetoric against traders, many of
whom are ethnic minorities.
Lack of domestic markets
Few local companies manufacture pigeonpea food
products for the domestic market and there is little
domestic consumption of processed pigeonpea food
products. If exporters are unable to sell the crop in
export markets, they incur heavy losses.
Government policies
Pigeonpea production and trade are hampered by
inconsistent government policies, including licensing
requirements for traders, road haulage, district
local government levies and cess. The regulations
create opportunities for corruption and harassment
and increase transaction costs. For example, the
Tanzanian government declared that levies and cess
should not exceed 5 percent of the farm gate price
but today district rural councils charge levies of
more than 25 percent. This directly results in farmers
being paid less. Farm gate prices are indirectly
reduced because traders are required to have several
licenses. For example, a trader requires 6 to 7
licenses to deal in cashew nuts. Traders often need
to visit district by district to obtain licenses because
of excessive bureaucratic controls and regulations . .
Despite these constraints, traders argued that there
are high payoffs to investments in the pigeon pea
sub-sector. For example, in Malawi, 15 years ago
there were only two firms processing pigeonpea.
Today over 10 firms process and export pigeonpea,
and at least 15 ,firms export raw pigeonpea.
Farm-level Opportunities and Constraints
Farmer interviews revealed that opportunities exist
for expanding the production of pigeonpea both as
a food security crop and as a cash crop, targeting
niche export markets. But increasing production for
the market requires greater use of quality seed of
the right varieties (i.e., varieties with traits in demand
in specific markets), and better crop management
in order to achieve grades and standards required
by international buyers. ICRlSAT and
NARS scientists have developed improved, shortand
medium-duration varieties, with white bold
grain. These varieties are suitable for cultivation by
small-scale farmers aiming to service the August-to­
November export market to India. Both on-station
and on-farm agronomic trials show that the yield
gains from the improved pigeonpea varieties vary
from 27 to 190 percent (Figure 1). The marginal rate
of return from adoption of the varieties ranges from
500 to 1000 percent, which far exceeds the 100 percent
hurdle rate of return that is required for widespread
adoption by smallholders. But the perform­
"0
~
2000
1500
1000
500
o
Treatrrent
DOn-farm 2000/1
.On-station:2001/2
Figure 1. Performance of new pigeonpea varieties in on·station and
on·farm trials, Oodoma, Tanzania, 2000/01·2001/02.
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Grain Legumes and Green Manures for Soil Fertility in Southern Africa