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3 Cases (USD 39 to USD 46 per ton fresh roots). With local varieties, farmers would obtain half the yield, thus practically production costs would double (from USD 70 to USD 140 per ton HQCF), resulting in a very small gross margin (USD 30 per ton HQCF). By promoting the introduction of high-yield varieties, the project worked on ensuring that production costs of HQCF remain competitive and smallholder farmers still receive a good gross margin. If the first stage of processing (transforming fresh roots into pressed wetcake) is outsourced, the farmer processor can secure a better gross margin (about USD 45 per ton HQCF), but it is not without risks. In February 2011, the estimated production costs of artificially dried HQCF exceeded the price biscuit manufacturers were willing to pay for HQCF (due to the lower price of wheat). However, by having all processing take place at the factory site, the processor price could be reduced to a viable level for supplying HQCF to the paperboard industry. Innovation and sustainability Equipment should not be purchased based on price alone: tight quality control and technical backstopping for manufacturers of equipment is crucial. Making high-quality products for new markets requires processing equipment that is of the right specifications, to assure quality and processing efficiency. Although NGOs and donors have distributed graters and presses for cassava processing before, the equipment was often designed for household processing, where timeliness and volume issues are less important than in a commercial HQCF VC. Furthermore, the equipment was often of inferior quality and often broke down because of inadequate maintenance. C:AVA faced this problem in the sun-dried VC; the equipment failed to meet the requested technical specifications and had to be modified. The project also took steps to include and empower the private sector as drivers of innovation in the HQCF VC. Taking advantages of pre-existing strong links amongst the private sector (processors and end users) is crucial. Working closely with the private sector can have very positive effects on the sustainability of project outcomes (Sandifolo 2010a). Concluding remarks There is potential to include small-scale producers in both sun-dried and artificially dried HQCF value chains. Proximity to customers and lower production costs give the sun-dried HQCF VC a competitive edge in the rural market. Quality, reliability of supply and economies of scale give the artificially dried HQCF VC the edge in the industrial markets (Westby and Adebayo 2010). A crop initially meant as food security crop might become a profitable cash crop with such increased market opportunities. 69
<strong>Regional</strong> <strong>Markets</strong> for Local Development Abbreviations C:AVA FAO HQCF IITA/SARRNET SMEs USD VC Cassava: Adding Value for Africa Food and Agriculture Organization High Quality Cassava Flour International Institute of Tropical Agriculture/Southern Africa Root Crops Research Network Small and Medium-sized Enterprises United States Dollar Value Chain References Hillocks, R. 2010. Back to office report: Needs assessment for community processing groups in Malawi. C:AVA internal report, unpublished. Natural Resources Institute, University of Greenwich, Chatham. Kaitano, V., and A. Martin. 2009. Gender and diversity issues relating to cassava production and processing in Malawi. C:AVA internal report, unpublished. Natural Resources Institute, University of Greenwich, Chatham. Kleih, U. 2009. Value chain analysis Malawi. C:AVA internal report, unpublished. Natural Resources Institute, University of Greenwich, Chatham. Lamboll, R., R. Hillocks, P. Ilona, P. Pankomera, V. Kaitano, and V. Sandifolo. 2009. C:AVA Malawi situation analysis. Scoping studies for C:AVA Objective 1. C:AVA internal report, unpublished. Natural Resources Institute, University of Greenwich, Chatham. Posthumus, H. 2010. Linking smallholders to markets: lessons learned from past projects and implications for C:AVA. C:AVA Briefing Paper no. 2. Natural Resources Institute, University of Greenwich, Chatham. Sandifolo, V. 2010a. Annual progress report. April 2010. C:AVA internal report, unpublished. Chancellor College, Lilongwe. Sandifolo, V. 2011a. Monthly progress report. January 2011. C:AVA internal report, unpublished. Chancellor College, Lilongwe. Sandifolo, V. 2011b. Quarterly progress report. June 2011. C:AVA internal report, unpublished. Chancellor College, Lilongwe. Sergeant, A. 2009. Market and financial observations for HQCF in Malawi. C:AVA internal report, unpublished. Accord Associates, Natural Resources Institute, Chatham. Westby, A., and K. Adebayo. 2010. Strategy refresh narrative. Report to BMGF, unpublished. Natural Resources Institute, University of Greenwich, Chatham. 70
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Editors: Fred Zaal, Jacqueline Slui
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Regional Markets for Local Developm
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Acknowledgements Acknowledgements F
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Foreword Bart de Steenhuijsen Piter
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Photo: ©FAO/Paballo Thekiso / FAO
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1 Introduction The challenge is to
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1 Introduction in this publication
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1 Introduction agro-related service
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