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Groundnut Value Chain and Marketing Assessment in Eastern Province, Zambia
Prepared for the Conservation Farming Unit
by Sally Ross and Matthew de Klerk
April 2012
Conservation Farming Unit: 23B Twin Palm road, Kabulonga, Lusaka, Zambia. Website: www.conservationagriculture.org. Email: [email protected]. Tel: +260 211 265455
Sally Ross: 280A/A, Great East Road, Lusaka. Email: [email protected]. Cell: +260 977310473
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CONSERVATION FARMING UNIT
The Conservation Farming Unit addresses declining productivity, food insecurity, nutrition, poverty and
the threat of Climate Change with Conservation Agriculture. The Conservation Agriculture Programme
was initiated in 1996 since when it has been funded by the Royal Norwegian Government through a
contract with the Zambia National Farmers' Union (ZNFU). The programme aims to increase adoption of
conservation farming and agriculture practices to 250,000 farmers by 2012.
AUTHORS
Sally Ross, Independent Consultant, ex Global Out-grower Manager, D1 Oils Plc
Over 15 years of experience in the agricultural sector in Africa, encompassing out-grower systems
development, business start up and management, research, pest management, distribution of
agricultural inputs and biofuels policy development. Most recently six years developing and managing a
Jatropha curcas small-holder plantation business in Madagascar and developing a global Jatropha out-
grower strategy in Zambia for D1 Oils.
Matthew de Klerk, Independent Consultant, ex Country Manager, D1 Oils Plc
Over 20 years in agricultural operations in Africa, including plantation management, agro-politics,
smallholder management, growing of diverse crops and crop research & development. Previously
Production Director and co-owner of Kondozi Fresh Export, Zimbabwe and most recently, Country
Manager of D1 Oils in Zambia.
ACKNOWLEDGEMENTS
We would like to express our appreciation to the CFU for making this study possible and for making
available to us its considerably knowledgeable human resources and practical field demonstration sites.
Without exception, the CFU field staff were professional, well organised and cooperative. An additional
special thanks to all of those people who generously gave up their valuable time to share their
knowledge and experiences within the groundnut value chain with us. We hope that the resultant report
and recommendations will lead to certain positive and tangible developments in the groundnut sector.
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Table of Contents
Executive summary ......................................................................................................................................... 6
1. Introduction ............................................................................................................................................ 7
1.1. Purpose of the Consultancy ............................................................................................................ 7
1.2. Methodology ................................................................................................................................... 7
2. Groundnut production in Zambia ........................................................................................................... 9
2.1. General ............................................................................................................................................ 9
2.2. Area planted, production and yield trends ................................................................................... 10
2.3. Groundnut Production Areas ........................................................................................................ 11
2.4. Eastern Province ........................................................................................................................... 12
3. Groundnut cultivation ........................................................................................................................... 13
3.1. Why, when and how do farmers plant groundnuts? .................................................................... 13
3.2. Use of inputs ................................................................................................................................. 15
3.3. Seed ............................................................................................................................................... 15
3.4. Groundnut varieties ...................................................................................................................... 16
3.5. Constraints to production ............................................................................................................. 18
3.6. Plot sizes and yields ...................................................................................................................... 19
3.7. Area planted to groundnuts .......................................................................................................... 19
4. Groundnut retention versus sales ........................................................................................................ 20
4.1. Volumes of groundnuts retained and sold in Zambia ................................................................... 20
4.2. Factors driving retention and sale of groundnuts ........................................................................ 21
5. Groundnut shelling ............................................................................................................................... 22
5.1. Sales of shelled versus unshelled groundnuts .............................................................................. 22
5.2. Groundnut shelling ....................................................................................................................... 23
5.3. Groundnut shells ........................................................................................................................... 26
6. Groundnut marketing ........................................................................................................................... 26
6.1. Marketing channels and buyer characteristics ............................................................................. 26
6.2. Key buyers in the Eastern Province............................................................................................... 28
6.3. The groundnut marketing season ................................................................................................. 30
6.4. How farmers decide to whom to sell their groundnuts................................................................ 31
6.5. Pricing ............................................................................................................................................ 32
6.6. Payment methods ......................................................................................................................... 33
6.7. Marketing constraints faced by farmers ....................................................................................... 33
7. Supply versus demand .......................................................................................................................... 33
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8. Conclusions and Recommendations ..................................................................................................... 34
8.1. Groundnut technologies ............................................................................................................... 34
8.2. Options for the establishment of a commercially operated marketing agency ........................... 35
Conclusions ............................................................................................................................................... 41
List of figures
Figure 1. The Eastern Province of Zambia, the study area ............................................................................ 8
Figure 2. Annual trends - Total groundnut production ................................................................................ 10
Figure 3. Annual trends - Area planted to groundnuts ................................................................................ 10
Figure 4. Annual trends - Groundnut production per hectare..................................................................... 11
Figure 5. Metric Tons of groundnuts produced per Province 2009/10 ....................................................... 11
Figure 6. Comparison of Eastern Province groundnut statistics by District: number of households growing
groundnuts, hectares planted, and production (2009/10 and 2010/11seasons) ......................... 12
Figure 7. A variety referred to as Malawi Chalimbana and planted by farmers in Zuwalinyenga Village,
Nyimba for decades ....................................................................................................................... 15
Figure 8. Production constraints cited by groundnut farmers ..................................................................... 19
Figure 9. Volumes of groundnuts retained and sold by Zambian growers between 2000 and 2011 .......... 20
Figure 10. Comparison between the volumes of groundnuts retained and sold by growers in the 9
Provinces of Zambia in the 2009/10 and 2010/11 seasons ........................................................ 20
Figure 11. No. of bags of groundnuts retained for different uses and sold by farmers in each District ..... 22
Figure 12. Groundnut shellers currently being used in the Eastern Province ............................................. 24
Figure 13. The Universal Nut Sheller ............................................................................................................ 25
Figure 14. Groundnut value chain and marketing channels ........................................................................ 27
Figure 15. Timing of farmers' groundnut sales ............................................................................................ 31
Figure 16. Groundnut farm-gate price trends Eastern Province 2009 - 2011 ............................................. 32
Figure 17. CFU operational areas .................................................................................................................. 36
List of tables
Table 1. Percentage of small and medium scale farmers growing groundnuts by Province ....................... 12
Table 2. Comparison of District groundnut production parameters ........................................................... 13
Table 3. Recommended groundnut seed rates and spacing in Zambia ....................................................... 14
Table 4. Groundnut varieties recommended by the Ministry of Agriculture .............................................. 16
Table 5. Groundnut varieties grown by respondents in each District ......................................................... 17
Table 6. Volumes of groundnuts retained and sold in the Eastern Province by District ............................. 21
Table 7. Strengths and ambitions of stakeholders in the Eastern Province groundnut value chain ........... 37
Table 8. Development of a commercially operated marketing agency: proposed roles and expected
outputs .......................................................................................................................................... 39
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List of abbreviations
CFS Crop Forecast Survey
CFU Conservation Farming Unit
COMACO Community Markets for Conservation
CSO Central Statistics Office
DACO District Agriculture Co-ordinating Officer
D1 D1 Oils Plant Science Zambia
EPFC Eastern Province Farmers Co-operatives Ltd
ETG Export Trading Group
FBP Full Belly Project
ICRISAT International Crops Research Institute for the Semi-Arid Tropics
IFPRI International Food Policy Research Institute
MACO Ministry of Agriculture and Co-operatives
SARO Saro Agroindustrial Ltd.
UNS Universal Nut Sheller
ZARI Zambia Agricultural Research Institute
ZNFU Zambia National Farmers Union
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Executive summary
An estimated 721,636 households currently grow, consume and trade groundnuts in Zambia and in 2010
267,567 ha produced 106,426 MT of shelled nuts of which 37,688 MT (35%) were sold and the rest
consumed. 30% of the country’s groundnuts are produced in the Eastern Province, where 69% of small
and medium scale farmers grow the crop.
This study set out to ascertain the constraints faced by farmers growing groundnuts in the Eastern
Province of Zambia and identify those which limit most significantly the area planted to groundnuts; to
determine the availability and accessibility of markets and gain insight into factors influencing farmers'
marketing decisions; and to consider options and opportunities to establish a commercially operated
marketing agency incorporating existing extension structures to provide a more competitive alternative
to traditional marketing channels.
Analysis of available statistics indicates that whilst groundnut production and area planted to groundnuts
have increased considerably in the past four years, yields, although they have increased, remain low,
averaging 612 kg (unshelled nuts)/ha nationally. Yield is constrained largely by the continuous recycling of
seed, limited availability of seed of improved varieties, late planting, and weed pressure. Farmers find
that weeding, harvesting and shelling are particularly labour intensive, reducing the profitability of their
groundnut crop, and the lack of reliable, organised markets and low prices are deterrents to planting
larger areas to groundnuts.
For processors and traders, quality issues prevail, with unmanaged aflatoxin levels making export markets
inaccessible and presenting health issues for local consumers. The dominance of the groundnut sector
almost entirely by small-holder producers further makes the sourcing of large quantities of product
extremely challenging, risky and costly.
The sector is in urgent need of organisation and requires considerable investment of effort in improving
yields and product quality through extension input, seed multiplication, breeding initiatives, labour-saving
technology transfer and aflatoxin control mechanisms. The marketing aspect needs to be addressed by
the private sector with an organisational set-up akin to those developed by the cotton and tobacco
industries and proven to work.
It is with the above in mind that we propose the establishment of a commercial marketing agency linking
the CFU's vast and expert extension system with SAJARO, a group with considerable extension and
marketing expertise within the small-holder sector in the Eastern Province. CFU is perfectly positioned to
drive the improvements in productivity so badly needed by groundnut farmers and the industry as a
whole, and to facilitate the introduction of improved technologies. SAJARO is poised to expand its existing
extension and buying network to include groundnuts and, together with CFU's network of Farmer Co-
ordinators, to ensure a reliable, transparent and fair marketing system linking groundnut producers with
processors and traders so driving the industry forward.
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1. Introduction
1.1. Purpose of the Consultancy
An estimated 721,636 households currently grow, consume and trade groundnuts in Zambia, with in 2010
an estimated 267,567 ha producing 163,733 MT of unshelled nuts (106,426 MT of shelled nuts) of which
57,982 MT (35%) were sold and the rest consumed. Yields are currently low, aflatoxin management
challenges prevail and the majority of trading is through informal buyers.
Increasing the area of cropped land occupied by legumes, particularly groundnuts, from current levels of
7-10% up to 15-20% is one of the major challenges confronting the Conservation Farming Unit (CFU) in
the promotion of crop rotation as part of their conservation farming systems. Labour inputs for shelling,
seed costs, the availability of improved varieties and inefficient marketing systems appear, among other
factors, to be the most significant challenges facing producers.
SAJARO, a commercial company (ex D1 Oils Zambia) with an Eastern Province Jatropha extension and
marketing system aims to add value to its existing system and member farmers by introducing additional
crops, initially groundnuts, to its crop basket.
Security of supply of groundnuts of consistent quantity and quality is one of the key limiting factors to
processors in Zambia and the region as a whole. As a result processors often operate at sub-optimal
capacity and fail to satisfy year round consumer demand for their finished products. Several processors
and traders seek to establish closer, more sustainable relationships with the small-holder groundnut
supply base in order to ensure consistent product supply.
In Zambia groundnuts provide an important source of cheap protein, energy and vitamins with far
reaching positive impacts on health and nutrition (Sitko et al, 2011) and provide a valuable additional
income to farmers.
The purpose of this consultancy was to:
Ascertain the constraints faced by farmers growing groundnuts and identify those which limit
most significantly the area planted to groundnuts
Determine the availability and accessibility of markets and gain insight into factors influencing
farmers' marketing decisions
Consider options and opportunities to establish a commercially operated marketing agency
incorporating exisitng CFU and SAJARO extension structures to provide a more competitive
alternative to traditional marketing channels by offering trusted, transparent and secure outlets
for producers and thereby facilitating the emergence of a loyal and sustainable supplier base
and ensuring security of supply to clients.
1.2. Methodology
The Eastern Province (Fig. 1) was selected as the study area as it is the largest groundnut producing
province, it is one of CFU's key provinces, and it houses the existing SAJARO extension structure that
could be incorporated into a commercially operated extension and marketing agency.
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Figure 1. The Eastern Province of Zambia, the study area
In carrying out this study, the consultants employed several methods of rapid, low cost data and
information collection as follows:
Literature review
Key informant interviews involving in depth discussion with
people and organisations with diverse knowledge of the
groundnut sector and using an interview guide to direct
discussions.
Informal surveys with groundnut farmers guided by a
detailed questionnaire.
Focussed group meetings with groundnut farmers facilitated
by CFU or SAJARO agents. Discussion was guided to address
the issues covered in the individual questionnaires.
Direct observation of groundnut fields, stores and shellers.
The study was undertaken over a 20 day period, with 17 days being
spent in the Eastern Province in February. Research was carried out in
Chipata, Lundazi, Chadiza, Katete, Petauke and Nyimba, six of the
Province's eight Districts, and producers of 95% of the Province's
groundnuts.
An initial literature search and preliminary key informant interviews conducted with personnel within the
Ministry of Agriculture and Co-operatives (MACO), the Conservation Farming Unit (CFU), the Central
Statistics Office (CSO), and Freshpikt Ltd (a peanut butter producer) guided the development of survey
Nyimba
Petauke
9
materials. A structured questionnaire aimed at respondents involved in the production or promotion of
groundnuts (MACO agents, Farmers, CFU agents) was developed, and relevant extracts from this
questionnaire were directed at specialist informants (District Agriculture Co-Ordinators (DACO's), MACO
Crops Officers, Msekera Research Station, Zamseed, MRI, Musika, Cargill, Peace corps volunteers).
Interview guidelines were developed for meetings with groundnut traders and processors (Freshpikt Ltd,
Comaco, Eastern Province Farmers Cooperatives Ltd (EPFC), Aliboo Trading Co., Link Commodities, Shifa,
Keson's, Liberty Wholesale, Sheni agriculture, Export Trading Company (ETC), and informal vendors).
All in all 13 farmers were interviewed individually, focussed group meetings were held with 96 farmers in
7 groups, and production, consumption and sales data was collected from 57 farmers. In addition 13
buyer and 23 key informant interviews were conducted (Appendix 1).
The statistics gathered and presented in the section describing the industry in Zambia were sourced from
the Central Statistics Office and unless otherwise noted refer to groundnuts in their shells and to 2009/10
data which provided more detailed statistics than the 2010/11 data.
Statistics were also collected from several District MACO Offices and in order to fully understand the data
supplied, it was interpreted at the District level with the help of Ministry of Agriculture Officers. From this
exercise it became apparent that there is considerable variation between the way in which groundnut
data is collected, recorded and interpreted at the District level.
Today when farmers talk of a bag of groundnuts they refer to a "50kg maize bag" containing
approximately 30 kg of unshelled groundnuts or 17 - 19 kg of shelled nuts. Nyimba District presents its
data in terms of 80 kg bags of shelled nuts, whereas Chipata presents numbers of 50 kg bags, Katete,
numbers of 50 kg bags of unshelled nuts, and Petauke, number of 30 kg bags. It was not always clear to
those interpreting the statistics whether they represented a volumetric or weight measure or indeed
shelled or unshelled nuts. As the information moves from the field officers who know exactly what it
represents, to desk-based officers, who interpret and summarise the data, it seems that a degree of
misinterpretation is therefore distinctly possible.
2. Groundnut production in Zambia
2.1. General
In the 1960's when Zambia's Chalimbana nut was highly sought after and the country's parastatal
marketing company was active, Zambia is reported to have been a major supplier of confectionery nuts
into the world market. With the dismantling of the parastatal marketing company, the seed breeding
programme collapsed, access to markets became a challenge to growers and access to nuts in bulk
became a challenge to buyers. With the sourcing of groundnuts becoming more difficult in Zambia,
consumers were drawn towards the smaller confectionary nuts of South Africa by an aggressive
marketing campaign. Production in Zambia declined massively with the withdrawal of commercial
farmers from groundnut production and the lack of organised marketing in the small-holder sector
(Compete 2009).
Today, 49% of small to medium scale farming households grow groundnuts, at a total hectarage of
267,567 ha in the 2009/10 season and, statistics suggest, 448,243 ha in the 2010/11 season, making
groundnuts the second most widely cultivated crop in Zambia after maize. Groundnut production at
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163,733 MT placed the crop fourth in terms of production after maize, wheat and sweet potatoes in 2010
(CSO). The crop, however, remains almost exclusively a low input/low output small-holder crop grown
largely by resource-poor farmers, particularly women. It is plagued by high incidences of the groundnut
rosette virus, heavy weed pressure, calcium deficiency (causing unfilled shells or "pops"), unmanaged and
unmeasured aflatoxin levels, poor quality seed resulting in extremely low average yields (612 kg
unshelled nuts/ha)(CSO), and is serviced by no organised marketing system.
2.2. Area planted, production and yield trends
Statistics indicate a three-fold increase in groundnut production in the four years 2007 to 2010 from
55,215 to 163,733 MT (Fig. 2) and a massive 70% increase from 2010 to 2011. This can be attributed to a
combination of increased hectares planted (from 147,320 ha in 2007, to 267,567 ha in 2010 and 448,243
ha in 2011)(Fig. 3) and increased production per hectare (from 375 kg/ha in 2007, to 612 kg/ha in 2010
and 622 kg/ha in 2011)(Fig. 4).
Figure 2. Annual trends - Total groundnut production
Figure 3. Annual trends - Area planted to groundnuts
-
50,000
100,000
150,000
200,000
250,000
300,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
MT
Kg/ha in shell Kg/ha shelled
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
He
ctar
es
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Figure 4. Annual trends - Groundnut production per hectare
Hectarage planted appears to be largely influenced by the availability of markets, by prices in the
previous season, and by markets and prices of competing crops. Yields per hectare are influenced by the
rainfall pattern, the varieties planted, seed quality, agronomy practices employed, and pest attacks. In
areas of CFU influence intense extension input is having a clear positive impact on farming and agronomy
practices and thus yields obtained.
2.3. Groundnut Production Areas
Although groundnuts are produced in the whole of Zambia, half the country’s groundnuts are produced in
the Eastern and Northern Provinces, which generate 30 and 21% respectively of the country’s production
(Fig. 5). In the Eastern Province the highest proportion of small and medium scale farmers grow
groundnuts (69%), followed by the Northern Province (60%), as compared to the country average of 49%
(Table 1).
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Pro
du
ctio
n/h
a (k
g)
Kg/ha in shell Kg/ha shelled
Central, 19,687
Copperbelt, 9466
Eastern, 49,854 (30%)
Luapula, 13,775
Lusaka, 1719
Northern, 34,859 (21%)
Northwestern, 5229
Southern, 23,024
Western, 6120
Figure 5. Metric Tons of groundnuts produced per Province 2009/10
Source: CSO (CFS 2009/10) Source: Sitko et al, FSRP 2011
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2.4. Eastern Province
The Eastern Province is dominated by small to medium scale farmers, with 22.56% of all farms being less
than 1 ha in size and only 68 farms considered large scale (>20 ha)(Sitko et al, FSRP 2011). In 2010, in the
Province's eight districts, 193,474 households produced 49,854 MT of groundnuts on 89,037 hectares,
with an average unshelled yield of 560 kg/ha (364 kg/ha shelled)(Fig. 6), an average groundnut plot size
per household of 0.46 ha and an average groundnut production of 258 kg (168 kg shelled) per household
(Table 2).
Figure 6. Comparison of Eastern Province groundnut statistics by District: number of households growing groundnuts, hectares planted, and production (2009/10 and 2010/11 seasons)
Note: Today the Eastern Province comprises nine districts, although this is a recent change and all statistics available are presented for the historical eight districts.
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0
5000
10000
15000
20000
25000
30000
Chadiza Chama Chipata Katete Lundazi Mambwe Nyimba Petauke
MT
No
. of
he
ctar
es
Hectares planted 2009/10 Hectares planted 2010/11
Production 2009/10 (MT) Production 2010/11 (MT)
Table 1. Percentage of small and medium scale farmers growing groundnuts by Province
Source: Sitko et al, FSRP, 2011
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Farmers in Chipata have planted the greatest area to groundnuts (>19,000 ha) in the past two seasons
and produced the greatest quantity of nuts, although the District is closely followed by Lundazi and
Petauke (Fig. 6). Between them Chipata, Lundazi and Petauke account for 74 - 76% of the area planted
and of the groundnut production in the Eastern Province, with Katete, Chadiza, Nyimba, Chama, and
Mambwe accounting for the remaining 24 - 26%.
This can largely be explained by the bigger population sizes in Chipata, Lundazi and Petauke (Table 2), but
not entirely, as greater proportions of households in these Districts plant groundnuts and in Lundazi those
households planting groundnuts plant 1.5 times the Eastern Province average in area. The latter two
observations can most likely be explained by a combination of strong CFU extension messages promoting
the plantation of legumes as part of conservation agriculture crop rotations and proximity to vibrant
markets.
Table 2. Comparison of District groundnut production parameters
2009/2010 season
District Estimated total no. of households
20091
Number of groundnut growing households
% of households growing groundnuts
Number of hectares planted
Average no. of hectares per groundnut growing household
Expected production (MT)
Yield/ hectare (kg)
Chadiza 19,764 9,520 48 4,007 0.43 2,413 592
Chama 19,139 9,035 47 1,622 0.18 1,584 977
Chipata 88,941 54,033 61 24,419 0.45 12,585 515
Katete 47,009 22,597 48 9,094 0.40 4,813 529
Lundazi 61,458 37,260 61 23,763 0.64 12,859 541
Mambwe 14,044 4,919 35 1,334 0.27 1,016 762
Nyimba 16,390 12,475 76 4,824 0.39 2,084 432
Petauke 65,562 43,635 67 19,904 0.46 12,500 628
Overall 332,307 193,474 58 89,037 0.46 49,854 560
Source: CSO
1. Estimated from 2010 Census of Population and Housing data on household number and population growth rates for each District.
3. Groundnut cultivation
3.1. Why, when and how do farmers plant groundnuts?
Why
When asked why they plant groundnuts all respondents cited cash and food, with 67% citing cash as the
primary reason. Two of the CFU groups of farmers also cited nitrogen fixation, illustrating an
understanding of the importance of crop rotation, and one respondent grew groundnuts to produce oil. It
was in Chanjowe in Chadiza and Kankhomba in Katete, the two locations furthest from buying centres
that farmers cited food as the primary reason for growing groundnuts.
When
The farmers interviewed clearly understood that groundnuts need to be planted at the first rains in
November or early December and most respondents indicated that this is when they plant. However, CFU
agents and the Head of Legumes Research in Zambia, at Zambia Agricultural Research Institute, Msekera,
14
Kennedy Kanenga, indicated that one of the main reasons for low yields is late planting. ICRISAT trials in
Malawi confirm that late planting results in low yields due to disease attack and poor pod filling (Minde et
al, 2008).
How
The way in which groundnuts are planted varies enormously. Traditionally they are planted on ridges at
variable spacing and seed densities or simply broadcast in a ploughed or dug-over field. In its
Recommendations for Improved Groundnut Production in Zambia (Siamasonta et al, 2000), the Ministry
of Agriculture presents recommended seed rates and spacings which vary depending on the variety
planted and are based on conventional as opposed to conservation farming methods (Table 3).
Table 3. Recommended groundnut seed rates and spacing in Zambia
Variety Recommended seed rate (kh/ha)
Recommended spacing (cm)
Plant population per ha
Chalimbana Makulu Red MGS-2 MGV-4 Champion Chipego Luena Natal Common Comet
80 70 80 80 80 60 60 60 60
75 x 15 75 x 10 75 x 15 75 x 10 75 x 10 60 x 10 60 x 10 60 x 10 60 x 10
89,000 133,000 89,000
133,000 133,000 167,000 167,000 167,000 167,000
As part of its promotion of conservation farming methods, CFU recommends planting either in basins (8-
10 seeds per basin) or rip lines with seeding densities of 111,111 seeds/ha.
Farmer responses indicated seeding rates varying from 74,000 to 667,000 per hectare and plant station
densities ranging from 37,000 to 667,000 per hectare. Kennedy Kanenga of Msekera cites sub-optimal
plant population densities as one of the top three reasons for low productivity per hectare.
Groundnuts are sometimes grown intercropped with Maize but more often as a monocrop as shading
impacts negatively on yield.
Following planting the key crop maintenance task is weeding. This presents a serious challenge in terms
of labour requirements. Whereas early weeding can be done with the aid of a hoe, later weed removal
needs to be done by hand in order to avoid disturbance of the developing pods.
In April harvest commences. It involves uprooting of the groundnut plants, stacking of the plants in the
field for 2 - 4 weeks to allow drying and finally, stripping of the nuts from the plants. The precise method
of harvest employed depends on the type of groundnut grown. In bunch types pod development is
restricted to the base of the plant and the pegs carrying the pods into the soil are thick and strong, with
the result that almost all of the pods are recovered with the plants when they are pulled by hand from
the soil. Uprooting of runner-type varieties such as Chalimbana, however, requires extensive digging and
is extremely labour intensive as pod formation takes place all along the creeping branches of the plant
and the pegs are thinner and weaker which means that pods often become separated from the plant at
15
harvest. For all varieties stripping of the nuts requires enormous labour and together with shelling is
estimated to be responsible for about 40% of the production cost (Ngulube et al, 2001).
3.2. Use of inputs
The farmers interviewed did not use any fertiliser, manure, pesticides or herbicides on their groundnuts,
largely as other crops, such as maize and cotton, with more stable markets take priority, but also as they
don't know enough about what groundnuts require, the causes and means of control of rosette virus etc.
3.3. Seed
Generally farmers source their planting seed from the previous season's harvest, recycling it long term in
spite of loss of vitality, aflatoxin infection etc (Fig. 7). If at planting time they do not have enough seed for
the area they want to plant they will purchase whatever seed is available either from fellow farmers or
local trading stores. This "seed" is most often simply commercial nuts which have been cleaned and
packed in sealed plastic bags. The majority of farmers do not recognise the importance of planting fresh
certified seed every five years. In CFU areas, however, farmers do understand the need to purchase fresh
seed, having been sensitised by CFU and three years ago supplied MGV-4 by them.
Figure 7. A variety referred to as Malawi Chalimbana and planted by farmers in Zuwalinyenga Village, Nyimba for decades
Very little certified seed is available on the market. In 2011 EPFC and Msekera produced 200 and 3 MT
respectively of which 180 MT were exported to Malawi, 20 MT were sold as commercial groundnuts and
3 MT were sold as seed locally. Zamseed produced an estimated 20 MT for sale in Zambia. ZARI, Msekera
estimates Zambia's annual seed demand today to be in the order of 300 MT. If one considers the
groundnut hectarage in 2011 (448,243 ha) and one assumes purchase of fresh certified seed every five
years, then the annual groundnut seed requirement in Zambia should exceed 7000MT, 2000 MT of this in
the Eastern Province.
Commercial seed companies produce little if any certified groundnut seed as its production is not as
profitable as many other crops because the multiplication factor is low, groundnut seed can be recycled
for up to five years, it loses viability very quickly, it shatters easily, the industry and the demand for seed
are unstable and due to the lack of awareness re the need for certified seed, there is little demand from
farmers.
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3.4. Groundnut varieties
In 2000 the Ministry of Agriculture recommended nine groundnut varieties adapted to different agro-
ecological conditions and with varying characteristics and since then a further three varieties have been
added to the list: Chishango, Katete and most recently, MGV5 in 2008 (Table 4). No new varieties have
been released since although the breeding work continues and a new release is envisaged in 2012.
In the Eastern Province The Zambia Agricultural Research Institute (ZARI) at Msekera is responsible for
groundnut breeding and breeder seed multiplication, although budgetary and man-power constraints
limit their capacity in this regard.
Table 4. Groundnut varieties recommended by the Ministry of Agriculture
Variety name Year released
Potential yield (MT/ha)
Variety type and kernel description
Other characteristics (Altitude, duration, oil content, Oleic/Linoleic (O/L) ratio, recommended uses)
Chalimbana 1950 0.8 - 1.5 Virginia runner type Large, tan kernels
800-1200 m 140-160 days 45 - 48% oil O/L ratio 1.6 Confectionery
MGS-2 (M-13) 1988 1.5 - 2.5 Virginia runner type Large, uniform, tan kernels
800 - 1200 m 140 - 150 days 45 - 48% oil Confectionery
MGV-4
1992 2.0 - 3.0 Virginia bunch type Medium, uniform, red kernels
Agro-ecological regions I, II and III 120 - 140 days 48 - 50% oil O/L ratio 2.1 Confectionery, oil
MGV-5
Approx. 2008
2.0 Virginia bunch type Large, tan kernels
120 days 48% oil O/L ratio 1.5 Confectionery
Chishango
Approx. 2005
2.0 Virginia bunch type Medium, uniform, tan-pink
120 days 47% oil O/L ratio 1.5 Confectionery
Makulu Red 1964 2.0 - 2.5 Virginia bunch type Small, red kernels
800 - 1200 m 130 - 145 days 48 - 50% oil O/L ratio < 1.0 Oil
17
Variety name Year released
Potential yield (MT/ha)
Variety type and kernel description
Other characteristics (Altitude, duration, oil content, Oleic/Linoleic (O/L) ratio, recommended uses)
Champion (8/8/19) 1998 2.5 - 3.0 Virginia bunch type Large, uniform, pink kernels
800 - 1200 m 150 - 160 days 48 - 50% oil Confectionery, oil
Chipego (ICGMS 5) 1995 1.0 - 1.5 Spanish bunch type Small, tan-pink kernels
400 - 1000 m 110 - 120 days No seed dormancy 48% oil Confectionery
Natal Common 1976 0.5 - 1.5 Spanish bunch type Small, tan kernels
400 - 1000 m 90 - 100 days No seed dormancy 45 - 48% oil
Comet 0.5 - 1.5 Spanish bunch type Small, tan kernels
400 - 1000 m 90 - 100 days No seed dormancy 45 - 48% oil
Luena (JL 24) 1998 1.0 - 2.0 Spanish bunch type Small, tan-pink kernels
400 - 1000 m 90 - 100 days No seed dormancy 48% oil O/L ratio 1.1 Confectionery
A total of 11 groundnut varieties were named by respondents (Table 5), with Chalimbana the only variety
known in all districts and MGV4 known in 5 out of 6 districts. There was often confusion around the
identity of varieties with, for example, MGV4 being called Makulu Red in Lundazi, with a large, old,
distinctly different groundnut originating from Malawi, being called Chalimbana in Nyimba, and with
farmers in Katete and Petauke talking of "Clusa", a groundnut distributed by the Clusa project. Some of
the different names featured in Table 4 may therefore refer to one rather than several varieties.
Table 5. Groundnut varieties grown by respondents in each District
District No. of varieties cited
Ch
alim
ban
a
MG
V4
Ch
ish
ango
Kyo
ba
Mak
ulu
Red
Kas
eli
MG
V5
Clu
sa
Sero
nto
n
Kad
on
on
ga
Mal
awi
chal
imb
ana
Chadiza 4 X X X X
Chipata 3 X X X
Lundazi 3 X X X
Katete 4 X X X X
Petauke 8 x X X X X X X X
Nyimba 5 X X X X X
18
As demand currently exceeds supply it appears that the market will buy groundnuts of any variety as long
as the nuts are clean and dry. Other than to EPFC and Comaco farmers who are supplied seed, there do
not seem to be clear market preferences being communicated to farmers prior to planting and even if
there were these would be hard to meet without seed being made available.
Farmers grow Chalimbana as it is a traditional variety which has been grown by them for a long time,
'seed' is readily available, and it is good to eat and not too oily so doesn't turn rancid when cooked with
vegetable relish. On the negative side, due to its Virginia runner type, farmers report that harvesting
requires labour intensive digging and Chalimbana doesn't do well under dry conditions and in the face of
disease attack. MGV4 is grown as it is high yielding, with heavy nuts, shorter duration than Chalimbana,
resistant to drought and disease, easy to harvest and good to eat. On the negative side MGV4's high oil
content means it turns rancid quickly once prepared with vegetable relish and makes it less suitable for
peanut butter manufacture.
MGV5 is perceived as a higher yielding, Rosette-resistant version of Chalimbana but is known by few
farmers. Msekera reports that the popularity of Chishango is on the rise due to its resistance to the
Rosette virus and short time to maturity. It is also reported to be good for making peanut butter.
In their evaluation of the effect of crop variety improvement on productivity, Evenson and Gollin (2003)
observe that the level of adoption of improved groundnut varieties in Zambia is low at 20%, as opposed
to 50, 70 and 75% in Zimbabwe, Botswana and South Africa, Mozambique and Swaziland respectively.
Countries such as Swaziland, with high levels of adoption of improved varieties have experienced high
annual yield growth (7.3%) whereas countries such as Zambia where farmers cultivate groundnuts under
subsistence farming systems, and generally grow low yielding, late maturing varieties on marginal, rainfed
land have experienced negative yield growth.
Evenson and Gollin further conclude that "there is a notable absence of organised private sector effort in
developing and marketing groundnut seed", one of the key factors influencing adoption being "the
availability of seed with high yield potential, more oil content, high shelling ratios and resistance to
insects and pests".
3.5. Constraints to production
When asked what they considered the main constraints to groundnut production, 67% of farmers cited
weed control, 47% disease (Rosette virus) during dry periods, 26% the fact that harvesting is labour
intensive and that long dry periods lead to low yields and 21%, the lack of market (Fig. 8). The importance
and challenge presented by weeding and the Rosette virus is confirmed by Msekera, by CFU agents and in
the literature (Minde et al, 2008; Siamasonta et al, 2000).
Other constraints named included the fact that shelling is labour intensive, continuous rainfall causes nuts
to germinate underground, late rains mean late planting and poor yields, POP's (shells containing no
kernels), lack of pesticides, insect pests, lack of seed, lack of knowledge and foraging pigs.
19
Figure 8. Production constraints cited by groundnut farmers
3.6. Plot sizes and yields
Although respondents were asked about their field sizes as part of this study, this information is not
presented here as field sizes are difficult to estimate, and tended to be inaccurate. National statistics
indicate that the average plot size planted with groundnuts is 0.46 ha per Eastern Province household
(0.37 ha countrywide), with an average production per household of 258 kg of unshelled nuts (CSO). The
respondents sampled during this study, however, produced on average 20.7 bags of unshelled nuts per
household, which is equivalent to approximately 372 kg of shelled nuts. Eastern Province farmers obtain
average groundnut yields of 560 kg unshelled nuts per hectare as compared to the national average of
612 kg/ha.
Potential yields vary from 0.8 - 1.5 MT/ha for Chalimbana to 2 - 3 MT/ha for newer varieties such as
MGV4. A CFU farmer growing MGV4 in Nyampande, Petauke obtained a yield of 136 kg of shelled nuts on
her 600m2 plot, equivalent to 2.3 MT/ha. Therefore the potential to achieve substantially higher yields
per hectare exists.
3.7. Area planted to groundnuts
In order to gain an understanding of the factors determining the area that a farmer plants with
groundnuts each season, respondents were asked whether the area planted to groundnuts in 2011 was
greater than, equal to, or less than the area planted in 2010 and why.
49% of respondents planted a larger area of groundnuts in 2011 than in 2010, 31% planted the same size
area and 20% planted less groundnuts in 2011 than in 2010. Those planting more, largely did so as prices
are high and the crop has become more profitable, but also in order to spread their risk as they feel
uncertain of the future maize marketing situation. Those farmers reducing the area planted with
0 10 20 30 40 50 60 70 80
Lack of knowledge
Lack of seed
Weeding - very labour intensive
Disease during periods of low rainfall (Rosette virus)
Insect pests
Lack of pesticides
POP's
Pigs
Late rains = late planting = poor yields
Long dry periods = poor yields
Continuous rainfall - nuts germinate underground
Harvesting - labour intensive
Shelling - labour intensive
Lack of market
% respondents citing a constraint (n = 19)
Groundnuts under severe weed pressure, Chipata
Clean weeded groundnuts planted according to CF
practices by one of CFU's farmers in Lundazi
20
groundnuts did so due to poor market access; because they planted larger areas to other crops and were
thus limited by land and/or labour availability; and due to lack of seed.
As yields per hectare are currently extremely low due to a variety of constraints, it would be wise to
tackle these constraints, enabling farmers to produce more from the area of land cultivated before
encouraging the plantation of larger groundnut plots.
4. Groundnut retention versus sales
4.1. Volumes of groundnuts retained and sold in Zambia
On average in Zambia 34% of groundnuts are sold and 66% retained by growers (CSO)(Fig. 9).
Figure 9. Volumes of groundnuts retained and sold by Zambian growers between 2000 and 2011
Although the Eastern Province is the largest groundnut producer in Zambia (49,854 MT, 2010), the
Northern Province sells a larger percentage of its groundnuts and a larger quantity of groundnuts (46%
and 15,972 MT respectively as opposed to 28% and 13,764 MT for the Eastern Province)(Fig. 10). Central
Province follows Eastern Province, selling 9354 MT (48% of its crop) in 2010, with Southern Province in
fourth position, selling 6265 MT (27% of its crop). Between them, the four provinces account for 78% of
the groundnuts sold in the country.
Figure 10. Comparison between the volumes of groundnuts retained and sold by growers in the 9 Provinces of Zambia in the 2009/10 and 2010/11 seasons
79% 49% 84% 61%64% 52%
73%54%
72%
0
10000
20000
30000
40000
50000
60000
MT
Groundnuts sold
Groundnuts retained
2009/10 season
21
Looking in more detail at the Eastern Province (Table 6), we note that Chipata, Lundazi and Petauke
Districts sell the largest quantities of groundnuts in the Province, an estimated 3875, 3781 and 3375 kg
respectively in 2010, corresponding to 31, 29 and 27% respectively of their groundnut crops. Chama and
Mambwe farmers, on the other hand, retain the largest proportion of their crop (93 and 87%
respectively) and Nyimba farmers sell the largest proportion (35%).
Table 6. Volumes of groundnuts retained and sold in the Eastern Province by District
2009/10 season
MT produced
MT retained
MT sold % of crop retained
Chadiza 2413 1685 728 70% Chama 1584 1467 117 93% Chipata 12,585 8710 3875 69% Katete 4813 3789 1024 79% Lundazi 12,859 9078 3781 71% Mambwe 1016 888 128 87% Nyimba 2084 1348 736 65% Petauke 12,500 9125 3375 73% Overall 49,854 36,090 13,764 72%
4.2. Factors driving retention and sale of groundnuts
In order to gain further understanding of the factors driving retention and sale of a family's groundnuts
57 interviewees were asked how many bags of nuts they produced in the last growing season (2010/11)
and of these what proportion were retained and what proportion sold. Farmers were further asked how
they used the nuts they retained and how they decided what volume to retain and to what uses to
allocate the retained nuts.
On average respondents produced 21 bags (588 kg) of unshelled nuts in 2011, with farmers in Chadiza
producing the least at 12 bags and in Nyimba the most at 33 bags (Fig. 11).
On average overall the respondent sample sold 59% of their crop and retained 41% (Fig. 11). Farmers in
Lundazi sold the greatest proportion of their crop (85%) followed by those in Nyimba (65%) and Chipata
(64%). Farmers in Chadiza sold only 35% of their crop and in Katete, although the overall figure was 52%,
farmers in one of the two villages interviewed sold none of their crop.
Groundnuts are retained by the household for use as seed, food, payment for labour and gifts to urban
relatives (Fig. 11). After harvest, farmers put aside enough groundnuts firstly to satisfy their seed needs,
secondly for home consumption and thirdly, particularly in Nyimba, but also to a lesser degree in Chadiza
and Katete, to pay labour. In Petauke and Katete small quantities are given to visiting urban relatives as
gifts.
22
Figure 11. No. of bags of groundnuts retained for different uses and sold by farmers in each District
Groundnuts are an important food source, containing approximately 25% protein, 50% edible oil and
diverse vitamins (Minde et al, 2008). Information supplied by respondents indicated that on average 8.2
kg of shelled groundnuts are consumed per person in a farming family per year, with a low of 2.3 kg and a
high of 21.3 kg. Farmers indicated that they most commonly consume nuts pounded and mixed into their
maize porridge or vegetable relish. They also eat them as raw, boiled or fried nuts, or as peanut butter.
5. Groundnut shelling
5.1. Sales of shelled versus unshelled groundnuts
Respondents sold 52% of their groundnut crop unshelled in 2011 and 48% shelled. Whether a farmer
shells his/her groundnuts prior to selling them or not depends on what the buyer requires, whether the
farmer is selling early or late in the season, whether s/he has enough time/labour to shell the crop before
s/he requires cash, and whether s/he considers his/her groundnuts primarily a cash crop or primarily a
food crop with some excess being sold for urgent cash needs. Due to time constraints it appears that
more of the crop which is sold early in the season is sold unshelled, and more of that sold later in the
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
No
. of
bag
s o
f u
nsh
elle
d n
uts
pro
du
ced
No. of retained bags used for GIFTS
No. of retained bags used for LABOUR
No. of retained bags used for FOOD
No. of retained bags used for SEED
No. of bags sold
23
season is sold shelled. Farmers growing the crop primarily for cash will more often shell the crop prior to
selling it.
5.2. Groundnut shelling
Groundnut shelling is labour intensive (Ngulube et al.). It is a task often undertaken by the family bit by
bit in between field-based tasks so estimation of the time taken is not easy. However, five of the more
accurate estimations indicated that typically it takes one person 6 - 10 hours to shell 1 bag (30 kg) of
groundnuts (i.e. 3 - 5 kg/hr) and The Full Belly Project, which promotes appropriate technology
interventions, cites a shelling rate of 1 kg per person hour (Fully Belly Project).
In order to make the shelling process easier water is usually sprinkled onto the nuts prior to removing the
shells. The shells of MGV4 are softer than those of other varieties and thus the use of water is not so
important for this variety. Only one farmer interviewed understood that this has quality implications and
commented that he does not use water when the nuts are to be used as seed. Farmers are unaware of
the health implications of aflatoxins.
Farmers were asked if they had ever seen or used a groundnut sheller. Only four individuals had seen one
and no-body had used one. With shelling being one of the most labour intensive tasks and a technically
straightforward means of adding value to the crop, one of the most common questions during interviews
was how could respondents access shellers.
Two kinds of shellers were seen in the Eastern Province (Fig 12): the Zimbabwean Mealiebrand sheller
(distributed by Saro Agro Industrial Ltd (SARO) in Zambia), and a locally made copy distributed by Jungle
Beat to their groundnut buying network in the Lundazi and Chama Districts. Jungle Beat distributed
approximately 180 of their shellers thoughout Zambia in 2011 and SARO reports that it sold only 35
Mealiebrand shellers in the whole country in 2011. 24 of these were purchased and distributed by
Eastern Province Farmers Co-operatives Ltd (EPFC) and World Vision, 1 by Rent to Buy, a company
supplying agricultural equipment on a hire purchase system, and the remaining 10 were sold to individual
buyers. Very few groundnut shellers are therefore in use. Only two were seen in the Eastern Province:
one Mealiebrand in Mtenguleni, Chipata District being used by the owner to add value to nuts purchased
unshelled and sold on in shelled form, and one Jungle Beat sheller in Steven Village, Chipata.
The Mealiebrand and Jungle Beat shellers comprise a steel casing with holes in the semi-circular base. A
series of teeth are fitted to a handle that is moved backwards and forwards in a pendulum action within
the metal casing and over the semi-circular punctured base. The friction between the teeth and the base
breaks the shells and the nuts fall through the holes to the ground below. The Mealiebrand sheller has
legs which lift it off the ground, whereas the Jungle Beat sheller needs to be propped up on two supports
so that it sits off the ground.
The Mealiebrand sheller is advertised to process 50 - 75 kg of nuts per hour and has the capacity to be
fitted with different size screens. No throughput data was available for the Jungle Beat sheller.
24
Figure 12. Groundnut shellers currently being used in the Eastern Province
Mealiebrand Sheller:
Locally made Jungle Beat sheller:
In Mali an alternative type of sheller called the Universal Nut Sheller (UNS) has been developed (Fig. 13)
and is currently marketed by the Full Belly Project (FBP), a non-profit international development
organization promoting the sheller and other appropriate technology inventions.
25
Figure 13. The Universal Nut Sheller
Source: http://en.wikipedia.org/wiki/Universal_Nut_Sheller; http://www.thefullbellyproject.org/Products/UniversalNutSheller.aspx
The UNS is a simple hand or pedal-operated machine comprising a concrete cone with a crank-powered
rotor inside. It is capable of shelling 50kg of nuts per hour, serving the needs of a village of 2000 people
and can handle a variety of nut types including groundnuts, pecans, Jatropha and Shea. A breakage rate
of 3 - 6% is reported (Full Belly Project).
Nuts are loaded through a space at the top of the sheller and the user turns the handle, which rotates an
internal rotor, creating a centrifugal force which pushes the nuts outwards towards a tapering gap
between the exterior and interior walls. The gap narrows towards the bottom and the shells of the
different nut sizes and types are broken at the point where the gap is sufficiently narrow and the rotor
motion causes enough friction to crack open the shell. The kernels and shell fragments fall into a basket
and are either separated by hand winnowing or, in the pedal-powered version, by a fan.
The unit can easily be replicated locally using sand, cement, metal bars and other common metal parts.
The concrete cone is cast in a fibreglass mould produced by the FBP. The plans, moulds and metal parts
required to make several UNS's can be purchased from the FBP for 700 USD and the unit replicated locally
thereafter. A unit costs less than $50 in materials to make (Wikipedia; Instructables; Full Belly Project).
With its though-put capacity of 50 - 75 kg/ of unshelled nuts per hour, the Mealiebrand sheller shows a
10 to 75-fold improvement on hand shelling at 1 - 5 kg/hour and with its 50 kg/ hour capacity, the UNS
shows a 10 to 50-fold improvement on hand shelling.
It must be stressed that the above sheller details are extracted from the literature and the ease of use of
the various models, the shelling and breakage rates, and potential for, and costs of, local fabrication need
to be fully evaluated.
26
5.3. Groundnut shells
Groundnut shells are most often thrown away and are sometimes used to make compost. In Petauke and
Nyimba particularly the shells are at times spread on the road in the belief that when people step on
them this will reduce the number of pops.
6. Groundnut marketing
6.1. Marketing channels and buyer characteristics
General
Groundnuts are produced almost entirely by small-holder farmers who keep a portion of their crop for
seed, food and to pay labour, and sell the balance to buyers (Fig. 14). Several different types of buyers
may be differentiated:
Small-scale traders who purchase the crop in one or more villages within a radius of several
kilometres. These traders are independent, operating with their own funds and supplying to a
market of their choice. Such traders generally handle tens of tonnes of groundnuts.
Large-scale traders who have sufficient funds to purchase hundreds or thousands of MT of
groundnuts, who are based in the main district centres and who may be linked to local or export
markets. This group employs a variety of buying techniques encompassing shopfront buying,
funding of buying agents in the field, pre-purchase of farmers' crops whilst still in the field,
buying through in-house agricultural extension agents and signature of purchase agreements.
These traders are able to clean and repackage nuts.
Processors producing peanut butter and purchasing groundnuts through large-scale traders,
small-scale traders, buying agents or directly from contracted farmers through in-house extension
agents.
Buyers purchase either shelled or unshelled nuts and may sell them as is or process them to some degree
before trading them. The end market products are boiled or raw unshelled nuts, dry or roasted shelled
nuts, processed shelled nuts with flavourings, pounded groundnuts, peanut butter, and animal feed (Fig.
14). Groundnut oil production has become unprofitable with the increase in price of the raw product.
27
Figure 14. Groundnut value chain and marketing channels
Small-scale
producers
Food (in porridge,
relish, as dry or roasted nuts,
peanut butter)
Sales of shelled or unshelled groundnuts
Dir
ect
con
sum
pti
on
Small-scale Traders Large-scale Traders
Market Retailers
Shelled
Groundnuts
Groundnuts in
shell
Roasted Raw
Peanut
butter
Spread
on bread
Peanuts Cooking –
protein
source
Use in
cooking
Seed
To pay labour
Gifts to urban family
Processors
Boiled
Shelled
Groundnuts
Shelled
Groundnuts
Confectionery
nuts
LOCAL MARKET LOCAL OR EXPORT MARKETS
ETC EPFC ALIBOO SHIFA LINK COMMODITIES KESON'S (CONGOLESE) ("SWAHILIS") FRESHPIKT
COMACO
Confectionery
nuts Animal
feed
28
6.2. Key buyers in the Eastern Province
Processors
Comaco
Community Markets for Conservation (COMACO) is a limited-by-guarantee, non-profit company
registered about ten years ago, stewarded by the Wildlife Conservation Society (WCS) and attracting
considerable funding and support from diverse donors and partners. As a result the organisation
appears driven by more of an NGO culture than a business culture at present.
Comaco produces "Its Wild" peanut butter, rice and honey from products purchased from farmers
adopting farming in place of poaching, the aim being to pay a premium to farmers desisting from
poaching and thus supporting conservation.
The organisation has a head office in Lusaka and regional branches in Nyimba, Lundazi and Chipata in
the Eastern Province. On the ground an extension system comprising Extension Managers with
motorcycles and Lead Farmers with bicycles assures the contact with and buying from farmer
members. Ten to 15 farmers are grouped into a group, 5 groups (50 - 75 farmers) being managed by
each Lead Farmer and 20 - 25 Lead Farmers being supervised by an Extension Manager.
It appears that product buying and administration of the conservation scheme absorb much of the
extension network's resources as farmers and other stakeholders feel that Comaco could add further
value by placing more emphasis on the delivery of agronomy advice.
In 2011 Comaco purchased 800 MT of groundnuts and in 2012 their objective is to purchase and
process 2000 MT. In 2012 they also plan to move their peanut butter production plant from Lundazi
and their packing plant from Nyimba to their processing site in Chipata, a key development given
that raw nuts are currently transported from as far away as Nyimba to Lundazi for processing and
then the bulk peanut butter back to Nyimba for packing.
Freshpikt/Jungle Beat
Freshpikt has been canning, bottling and marketing Zambian produce for the past six years. The
company’s peanut butter, now on the Zambian market since 2009 is one of its best sellers, with
current annual sales volumes of 1000 MT annually. In 2008 Freshpikt began supplying export
markets in addition to local markets.
All of the groundnuts required for Freshpikt's peanut butter production are sourced from small-
holder producers either through Jungle Beat, an affiliated buying company, or from other traders.
Supply is erratic as the company's presence on the ground is not sufficiently widespread or
consistent. In order to ensure security of supply to their factory, meeting of their production targets
and consistent supply to their customers, Freshpikt would like to link in to an extension system
delivering agronomy advice, boosting yields, improving quality, and facilitating its access to the
necessary volumes of quality groundnuts. As a first step to the latter, in 2011 throughout Zambia
Jungle Beat distributed approximately 180 locally made groundnut shellers modelled on the
Zimbabwean Mealiebrand sheller. The shellers were placed at the disposal of women who earned an
income shelling groundnuts on behalf of Jungle Beat/Freshpikt.
29
In 2011, Freshpikt and Jungle Beat purchased approximately 900 MT of groundnuts between them in
the Eastern Province, 450 MT of this originating from Zambia and 450 MT from Malawi. Freshpikt
aim to procure 4000 MT of groundnuts in Zambia as a whole in 2012 and to increase this to 10,000
MT by 2016.
Large-scale traders
Eastern Province Farmers Co-operative
The Eastern Province Farmers Cooperative (EPFC) is a community business created in 2007 with the
aim of giving small-holder farmers in the Eastern Province an opportunity to develop successful seed
multiplication businesses. They deal primarily with groundnuts. Through their links with ZARI,
Msekera and their Field Co-ordinators on the ground, EPFC aim to improve agricultural productivity
and add value to farmers crops by linking them to valuable seed markets through short value chains.
EPFC are now buying groundnuts destined for the commercial market as well as groundnuts for seed
and would like to export confectionery nuts to Europe and produce peanut butter locally. They are
seeking funds to enable them to establish an aflatoxin measuring facility.
The organisation is based at an office/warehouse site in Chipata, comprises a team of ten, and is
currently working directly with more than 1,500 farmers in Chipata and Katete districts and indirectly
with many more. EPFC farmers are organised into 22 groups of 20 to 70 farmers, with
communication between EPFC and farmers taking place via 22 Lead Farmers each assisted by several
Community Development Facilitators and the whole being managed by one EPFC Field co-ordinator
and two EPFC Field Facilitators. EPFC signs contracts describing its responsibility to supply seed,
training and a market.
In 2011 EPFC aimed to purchase 900 MT of groundnuts destined for seed and achieved 200 MT. An
interrupted cash-flow combined with extremely high commercial groundnut prices meant that much
of the company's seed was side-sold into the commercial market. Of the 200 MT of groundnut seed
procured, 180 MT were exported for seed to Malawi where seed prices were higher, and
approximately 20 MT sold into the commercial market in Zambia. In 2012 EPFC aims to purchase
2000 MT of groundnuts, 350 MT of these destined for the seed market and 1650 MT for the
commercial market.
Export Trading Group
For 20 years the Export Trading Group (ETG) has focussed on business in the agricultural sector in
commercial farming, procurement, trading and processing of cereals, pulses and oilseeds. The group
has 7000 employees and operations in 24 countries in Africa, Europe, the Americas and Asia,
although it has been longest in Africa where it has gained the majority of its experience.
As procurement and trading experts, the ETG establishes buying networks in rural and commercial
agricultural areas and buys produce directly from farmers. They clean, aggregate, process and trade
the commodity into local, regional and international markets. Annually the ETG procures 1.2 million
MT of commodity of which 10% is processed into a supermarket-ready product prior to being traded.
30
In the Eastern Province the ETG has procurement depots in Petauke and Katete where in 2011 they
purchased 1600 MT and 98 MT of groundnuts respectively. In 2012 they plan to establish an
extension network to boost production of groundnuts and introduce other crops such as pigeonpea,
cowpeas and green gram to Zambian farmers.
Localised trading stores and seasonal buying camps
Four localised trading stores were identified and visited:
Aliboo, Lundazi
Shifa, Chipata
Link Commodities, Chipata
Keson's Enterprises, Katete
All are local traders buying through their shops in Lundazi, Chipata and Katete and to some degree
through buying agents in the field. These buyers are reported to pre-purchase much of the crop by
loaning groundnut farmers money in the cash-poor months on the understanding that loans will be
reimbursed at harvest/sale. They are able to clean and repack produce prior to onward trading and
they also make up small packs of groundnut "seed" from the commercial nuts purchased.
Congolese and Tanzanian or "Swahili" buyers come and set up buying camps in the groundnut
marketing season, the former mostly at major junctions along the Great East Road in Nyimba and
Petauke, and the latter in Lundazi and Chama. These buyers export everything they buy to their
respective countries.
It is extremely difficult to gain information regarding volumes traded by the trading stores or buying
camps. Aliboo suggests that 1000 MT of groundnuts may have been traded through Lundazi in 2011,
500 MT purchased by himself and 500 MT by other buyers. Information gleaned through
transporters and parties connected to the buyers in Chipata but not buying themselves, suggest that
in the order of 1200 - 1500 MT may have been informally traded in and out of Chipata in 2011. This
would include groundnuts originating in Malawi. Destinations include Lusaka, DRC, Angola, Burundi,
South Africa and Zimbabwe.
6.3. The groundnut marketing season
Groundnut buyers start to prepare their marketing season in April, recruiting agents at this time, and the
first early season buying commences in May.
Although none of the respondents talked of pre-selling their groundnuts, one of the large traders
suggests that up to 60% of the crop in the Lundazi area is sold prior to harvest through informal loans
tying farmers into traders. This can be a valuable source of credit to farmers in the cash-poor months of
January to March although there is a danger that prices set at this time are exploitatively low as per some
reports.
As the groundnut marketing season is a long one spanning more than six months, the crop is sold as and
when a family requires cash. As the prices per kg more than double from the beginning to the end of the
season, households will keep their unshelled nuts for as long as possible before selling. The fact that nuts
sold early in the season contain more moisture slightly compensates for the low per kg prices at this time,
31
however. Storage for long periods also comes with a risk of produce degeneration and loss due to pest
attack or theft.
Responses gathered from those who could remember in which months they sold their crop, suggest that
marketing commences in April/May, peaks in August and is largely finished by the end of October (Fig.
15). With the exception of extremely robust households, most often households will sell a few bags early
in the season to generate urgent cash in May/June and then store what they can until prices increase and
a further cash requirement induces them to sell.
Figure 15. Timing of farmers' groundnut sales
6.4. How farmers decide to whom to sell their groundnuts
Farmers can either transport their groundnuts to the nearest town for sale, which means finding
transport and incurring transport costs for themselves and their produce, but ensures them a higher per
kg price and usually the choice of several buyers, or they can sell locally to stationary or roving traders.
Farmers whose nearest buying centre is Chipata find themselves subject to additional stress by aggressive
"bag handlers" who force them to use their services for a substantial fee. Before making the decision to
transport their produce to town, farmers need access to information on prices being paid, something
they don't always seem to know how to access.
Those selling their produce in their villages do so either to small-scale traders or agents buying from a
fixed point or to roving traders using bicycles and motorcycles. Those for whom travelling to town is not
an option due to lack of transport or capacity, for example, are subject to none of the costs and
challenges of travelling to town, however, they are in a very weak bargaining position when it comes to
agreeing prices. Women often fall into this group, finding a marketing trip to town too daunting.
The decision re where to sell the crop is also often driven by how urgently a family needs cash. If there is
a buyer close by but payment will be delayed as he doesn't have cash in hand, then even though a family
may prefer to sell locally they will often make an alternative plan to ease their cash flow.
0
2
4
6
8
10
12
14
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
No
. of
resp
on
den
ts s
ellin
g n
uts
32
Given the above it is therefore not surprising that most of the respondents indicated that they would
prefer to sell their groundnuts to a known and trusted buyer offering cash on delivery and a fair price in
their village.
6.5. Pricing
Farm gate prices in 2010 and 2011 in the Eastern Province show similar trends (Fig. 16). In January prices
are relatively high as supply is limited but as the first groundnuts start to be harvested, prices drop,
reaching a minimum in May, when the new season's marketing begins. From May, through to year-end
prices rise steadily.
In 2011 prices started at 3200 ZK/kg and reached 5500 ZK/kg in August, whereas in 2010 prices started at
1700 ZK/kg and reached a high of 4000 ZK/kg in December. There is therefore extreme variation in prices
through the season, with those at the end of the season being double or close to double those early in
the season. Farmers are therefore rewarded for being able to store their groundnuts rather than for
selling superior quality nuts soon after harvest.
High increases in prices from one year to the next have also been seen in the last three years. In 2009
prices did not rise above 2500 ZK/kg, whereas in 2010 they reached 4000 ZK/kg, and in 2011, 5500 ZK/kg.
Therefore, in spite of the massive production increases over the same period, demand still exceeds
supply.
Figure 16. Groundnut farm-gate price trends Eastern Province 2009 - 2011
The price differential between town and village varies according to distance from the nearest District
centre. Indications are that those living within about 30 kms of town can expect prices of 500 - 1000 ZK
less per kg if selling in the village as opposed to the town. As long as growers are able to reach the
nearest market centre they are in a relatively strong negotiating position, but the more isolated producer
communities are subject to the whims of the roving vendors.
33
6.6. Payment methods
The groundnut market is currently cash driven as there is considerable competition amongst buyers and
farmers perceive the crop as a source of quick cash. However, when asked whether they would consider
other payment conditions, the majority of respondents indicated that they would accept a one to two
week delay in payment if the buyer was an organisation with whom they had a long and trusting
relationship. How likely this is to work in reality will doubtless depend on the degree of competition from
other buyers and the degree of urgency re cash needs.
6.7. Marketing constraints faced by farmers
The constraints faced by farmers when marketing their groundnuts were cited to be low prices, distance
to market, transport to market and lack of an organised and consistent market.
7. Supply versus demand
Statistics indicate that 61,082 MT of shelled groundnuts were traded in Zambia as a whole in 2011 and
37,688 MT in 2010 (CSO). Of this 10,740 MT and 8947 MT respectively were traded in the Eastern
Province alone.
Indications obtained from large scale traders and processors during this study suggest that in the order of
5500 - 6000 MT were traded formally in the Eastern Province in 2011. As the Zambia-Malawi border is
very porous, allowing farmers from both countries to sell their produce in whichever country offers the
best price at the time of sale, this figure is believed to have included some groundnuts originating in
Malawi.
The gap between the statistical records and quantities formally traded suggests a massive informal trade,
perhaps handling close to 50% of the groundnut sales. If true, this could be attributed to, for example, the
Congolese traders, opportunistic Zambian traders, sales direct from farmers to market retailers, and
informal movement across the Malawi border, all of which are exceedingly difficult to quantify.
The demand for groundnuts by the confectionery and peanut butter industries, both locally and on the
export market is enormous. Locally, Freshpikt will require 10,000 MT of nuts per annum in the future,
Comaco and EPFC require 2000 MT each today, the Export Trading Group aims to purchase considerable
quantities and this excludes other buyers such as CHC and Rab Processors from whom no information
was obtained. With regard to the export markets, South Africa alone is said to require in excess of 20,000
MT/ annum and one trader speaks of a 30,000 MT annual confectionery market in the UK.
The meeting of even part of this market demand presents a massive opportunity for Zambia's small-scale
producers and could have a substantial impact on the economy of the Eastern and Northern Provinces,
the key producer areas.
The major constraint to accessing export markets is the control of aflatoxin levels which are not reliably
measurable in Zambia and often said to be too high to meet European and South African standards.
These can be brought down by improving harvesting and shelling systems, by introducing improved
storage methods and materials, and investing in testing equipment.
34
8. Conclusions and Recommendations
8.1. Groundnut technologies
Agronomy
It was clear from this study that farmers' groundnut agronomy practices vary greatly, with many citing
weeding as a challenge, with data on planting densities often indicating sub-optimal plant populations
and with the Msekera researchers indicating that late planting is often a reality. All of these plus the low
adoption of improved varieties explain the low yields per hectare (Minde et al, 2008; Evenson and Gollin,
2003) and highlight the need for more intensive technology transfer coupled with a strong and consistent
market pull.
Inputs
Given that weed control is critical throughout and extremely labour intensive in the later stages of the
crop, it may be worthwhile investigating appropriate herbicides for recommendation. Furthermore,
pesticides don't appear to be used at all on groundnuts and a recommendation for aphid control should
be investigated and communicated to farmers.
Planting seed
The survey indicated that the importance of planting improved seed and of purchasing new, certified
seed every few years is not understood by the majority of farmers. Furthermore the availability of
improved, certified seed is extremely limited. The commercial seed companies produce a limited quantity
of groundnut seed as it has a low multiplication factor, short lifespan, the sector is inconsistent, farmers
are uneducated re the need for certified seed, and the quantities required on an annual basis are
therefore unpredictable. As the groundnut industry becomes more established and consistent,
commercial seed companies are likely to react positively. In the interim an organisation such as the CFU
or SAJARO could play an active role in supplying certified seed to its growers through an off-take
agreement with a seed company. In this way the seed company is assured a market for its groundnut
seed and farmers are assured quality planting seed.
Groundnut breeding
It appears that there is a need to better understand farmer and market preferences and to ensure that
the groundnut breeding programme develops and delivers suitable varieties and sufficient quantities of
breeder seed to satisfy these preferences. Traders and processors need to work closely with the breeders
such as ZARI, Msekera and ICRISAT, Malawi to communicate market requirements, and breeders need the
funding to maintain a long term, sustainable breeding programme with the help of policy makers and
donor organisations.
Quality
Determination of aflatoxin levels was beyond the scope of this study. However, the study did establish
that the majority of farmers dampen their groundnuts with water to make them easier to shell and also
confirmed that farmers regularly see aflatoxin in their nuts. On the other hand, two of the processors
mentioned that levels in Zambia are low. As export markets generally have low aflatoxin tolerance levels
this is obviously something that needs to be measured and if necessary addressed through improved
35
knowledge transfer. By providing technical support to groundnut farmers in Malawi, coupled with the
installation of a lab measuring aflatoxin levels in produce, the ICRISAT-NASFAM partnership has
succeeded in facilitating the production of a groundnut crop of which 86% meets export standards
(Minde et al, 2008). Private sector requirements for quality nuts should be the driving force behind the
establishment of aflatoxin measuring facilities by existing accredited standards bureaux such as SGS.
Processing technologies
One way of reducing aflatoxin levels and at the same time decreasing labour requirements is to introduce
groundnut shellers as is currently being done on a small scale by Jungle Beat and EPFC. We would
propose that the Mealiebrand type shellers currently being used and the Universal Nut shellers imported
from Malawi as part of this study are compared in terms of their efficiency and ease of manufacture and
evaluated for their economical viability.
Given that one of the most labour intensive aspects of groundnut production is the stripping of the pods
from the plants we would recommend further investigating the potential for introducing pod strippers to
farmers.
ICRISAT Malawi has introduced both shellers and pod strippers to groundnut farmers and may be able to
share valuable experience with Zambia.
8.2. Options for the establishment of a commercially operated marketing agency
The groundnut sector has developed in a very ad-hoc fashion over the last ten years due to inconsistent
and unstable markets and little or no continuity of stakeholder relationships. Demand is now growing,
prices are rising and consequently groundnut hectarages and production are growing. There is an urgent
need for improved productivity and profitability at the small-holder producer level and for the
introduction of a marketing system enabling cost-effective assembly of the small-holder commodity. The
time is therefore now ripe for organisation and development of the sector.
We believe this needs to be driven by the development of dynamic, organised marketing systems by
private sector buyers linked in to an extension system which will bring about the increased production
and profitability of the crop through the agronomical and technical improvements discussed above i.e. a
pull from the markets and push from extension.
Here we propose an option for the establishment of a commercially operated marketing agency linking
the extension and marketing expertise of the SAJARO (ex D1) network with the vast extension expertise
and coverage of the CFU.
CFU and SAJARO extension structures
Conservation Farming Unit
The CFU is affiliated to the Zambia National Farmers Union and has been supported by the Norwegian
Government since its creation in 1996. With its mandate being the promotion of conservation agriculture
and the transfer of technology associated with this mission, the CFU has invested massive agronomic
expertise in its areas of operation in the Eastern, Western, Southern and Central Provinces since its
inception (Fig. 17).
36
As a result of the CFU's long term, consistent efforts, an estimated 150,000 farmers had adopted
conservation farming minimum till practices by 2009 and by the end of this year adoption is expected to
have increased to 240,000. Furthermore, substantial increases in crop yields, superior performance in dry
and wet seasons, and improvement in the physical and chemical properties of soils have been confirmed,
and the promotion of conservation agriculture has been adopted as a key component of National policy.
Each of the CFU's operational Provinces is serviced by a substantial and highly professional extension
system comprising a Regional Manager, Field Supervisors, Field Officers and Farmer Co-ordinators. In the
Eastern Province the CFU operates in Petauke, Katete, Chipata and Lundazi Districts, and comprises a
Regional Manager, four Field Supervisors (one per District), 18 Field Officers, and 540 Farmer Co-
ordinators responsible for mobilising 48,600 farmers annually. This team co-ordinates four training
periods in the year, during each of which the 48,600 farmers are trained on techniques relevant to the
time of the year.
SAJARO
SAJARO comprises a team and farmer network developed over six years in the Eastern Province by D1 Oils
(an AIM listed biofuels business) to prove the Jatropha out-grower concept, to produce Jatropha primarily
for use as a biofuel, but also for its value-add organic fertiliser and biomass. In October 2011, D1,
suffering from severe financial constraints, made the decision to withdraw funding from its Zambian
subsidiary with immediate effect, leaving their small farmer base and their team without off-take or
support.
SAJARO's network covers 5 of the Eastern Province Districts (Nyimba, Petauke, Katete, Chadiza and
Chipata), each of which is managed by an extension agent overseeing 20 Lead Farmers, seven to 19
buyers, a training farm, several nursery sites, multiple storage depots and demonstration farms. Between
them, the team boasts over 100 years of experience in the small-holder agricultural sector in southern
Africa. They have succeeded in converting Jatropha from a poorly understood, non-performing "miracle"
CA farmer
Figure 17. CFU operational areas
37
tree into a much better understood crop delivering its first yield in year 1. Through the team's marketing
structures and value-add oil production, farmers in the Eastern Province have started to make money
from their Jatropha.
Whilst looking for the best way to valorise the farmer and extension networks and knowledge base
developed, the SAJARO team identified the groundnut value chain as one in which the introduction of an
organised marketing and extension system would boost the quantity and quality of groundnuts produced,
ensuring consistent supply to processors and improving the income of farmers through improved yields
and linkage to a secure market paying fair prices.
Proposition for the establishment of a commercially operated marketing agency
We summarise the strengths and ambitions of the CFU, SAJARO, groundnut farmers and buyers involved
in the Eastern Province groundnut industry today in Table 7 before presenting our proposal for the
establishment of a commercially operated marketing agency.
Table 7. Strengths and ambitions of stakeholders in the Eastern Province groundnut value chain
Stakeholder Strengths Ambitions
CFU - Operations in Petauke, Katete, Chipata, Lundazi
- Professional, highly trained extension team of 563
- Mobilise 48,600 farmers practicing conservation agriculture
To double the area of cropped land occupied by legumes, particularly groundnuts, in order to achieve optimal crop rotation as part of their conservation agricultural systems: - Increase profitability of groundnuts cf other
crops - Facilitate access to value-add technology - Link their farmers to reliable markets
SAJARO - Operations in Nyimba, Petauke, Katete, Chipata, Chadiza
- Buying network with capacity to reach an estimated 60,000 households
- Lead farmer network poised to
To maintain its existing extension and marketing service to Jatropha growers and expand this to encompass groundnuts and other cash crops grown in EP farming systems and lacking organised markets To become a commercial small-holder
38
Stakeholder Strengths Ambitions
mobilise 800 Jatropha growers marketing agency providing small-holder farmers with a reliable, fair and transparent market for their produce, and the markets with substantial quantities of quality products.
Farmers 314,128 farming households in the 8 Eastern Province Districts (2010) 218,005 groundnut-growing households in the EP Average yields of 364 kg shelled nuts/ha
Better returns on their land and labour investment: - Improved seed - Higher yields per ha - Value addition to end products - Access to reliable markets
Buyers Processors - local Export markets (nuts destined for confectionery, peanut butter)
Consistent supply of quality groundnuts: - 6000+ MT of groundnuts for processing into
peanut butter in 2012 - 50,000+ MT requirement
We propose to develop SAJARO into a commercially operated marketing agency which:
- Through strong links with CFU's extension network, and strengthening of its own extension
network, particularly in Districts not covered by the CFU, will ensure delivery of the necessary
agronomical and technical knowledge required to boost both the quality and quantity of
groundnut production.
- By building on its existing buying network and linking it to the CFU Farmer Co-ordinator network,
will provide both CFU farmers and the broader farmer population with a reliable, fair and
transparent market for their produce, thus providing the impetus for farmers to invest more in
their groundnut crop and plant greater areas to groundnuts within their crop rotations.
- By developing strong, long-lasting win-win relationships with the producer base and boosting
groundnut yields through delivery of improved seed and agronomy knowledge, will be able to
satisfy the processors needs for consistent product quantities and quality.
Essentially we propose that CFU provides the necessary extension input through their existing network,
complemented by extension input from SAJARO agents, particularly in Districts where CFU is not present.
SAJARO will provide the marketing input and manage the marketing operation which will link in to
selected CFU Farmer Coordinators. The latter will thus become not only providers of technical support
and inputs to their farmers as at present, but will also act as a link to market for their farmers. They will
be remunerated through volume and quality-linked commissions.
SAJARO will sign off-take agreements with the processors and traders to whom they are affiliated and
with farmers, through these securing finance to commence the buying. The marketing agency will be
financed by the establishment of agreed margins at the beginning of the season.
We summarise the way in which we see the specific roles of the CFU-SAJARO collaboration evolving in
Table 8.
39
Table 8. Development of a commercially operated marketing agency: proposed roles and expected outputs
Roles Expected output
Extension network: CFU + SAJARO Marketing network: SAJARO
Communication of market opportunities prior to the planting season so enabling farmers to make an informed decision re how much of each crop to plant
Elaboration and signature of purchase agreements.
Market confidence established early
Training of farmers in good agricultural and conservation farming practices including aspects specific to groundnuts
Improved production per hectare
Liaison with groundnut breeders to encourage development of varieties that meet market and farmer requirements.
Increased uptake of improved market-adapted groundnut varieties through:
- Liaison with seed companies to boost the volumes of seed available
- Facilitation of seed distribution to the farmer base
- Demonstration of the advantages of growing improved varieties and fresh seed
Installation of training/demo farms illustrating the yield impacts of good versus bad practices and comparing improved versus local varieties
Development of extension materials addressing the factors critical to improved groundnut production
Introduction of improved shelling and pod stripping technologies
- Sourcing, evaluation and distribution of technologies
Reduction of production costs, improved quality, and greater value-add
Creation of awareness around the health and quality implications of aflatoxins and introduction of improved post-harvest management techniques to combat the problem.
Management of aflatoxin levels, improved health for local consumers and access to export markets secured
Establishment of transparent, fair weighing and pricing systems
Attractive trading conditions through establishment of a reliable market
Maintenance of a sound, reliable buying system throughout the groundnut marketing season
Assurance of a guaranteed market
Bulking of the groundnut crop at marketing centres managed by selected CFU Farmer Co-ordinators:
- weighing, quality control, storage, issue of receipt vouchers
- communication with marketing agency re volumes bulked
- co-ordination of payment days where applicable
Bulking of the groundnut crop at marketing centres managed by SAJARO buying agents:
- weighing, quality control, storage, issue of receipt vouchers
- communication with marketing agency re volumes bulked
- co-ordination of payment days where applicable
Crop bulked into minimum volumes at accessible points optimising the logistics and minimising the costs of collection
40
Roles Expected output
Extension network: CFU + SAJARO Marketing network: SAJARO
Timely disbursement of funds and payment of agent's commissions
Development of farmer and agent confidence
Supervision and measurement of quality control aspects
Quality, bulk product consistently delivered to market - increased market confidence in Zambian suppliers
Transport of product from bulking centres to District depots and from District depots to end market
Delivery of technical support; facilitation of access to inputs; honest, consistent communication; honouring of promises; year-round extension presence on the ground; long term presence; payment of fair cash prices; and consistent extension and buying presence.
Development of a strong, participatory win-win relationship between farmers and processors
With regard to the introduction of shellers and pod strippers, once the viability of this has been evaluated
from a technical stand point, the different potential ways of introducing the technologies need to be fully
evaluated. It may be appropriate to simply include these into the existing CFU input supply chain or, given
that shellers, for example, can service large numbers of households, it may be more effective to establish
shelling service providers who do toll shelling for farmers.
Payment methods require some comment as the handling and management of cash flow into widespread
areas presents particular challenges. We would propose that areas are evaluated according to their
proximity to market and buying intensity, and that different payment options are trialled according to the
area. Possibilities include:
Immediate cash payment - provides farmers with immediate cash but means that buyers have to
keep large quantities of cash on hand. Will be most necessary in areas where buying competition
is greatest.
Payment through a voucher system, where farmers are issued a voucher on delivery and
verification of their produce and, on presentation of the voucher at a recognised outlet, are given
their cash. The least risky option for the marketing agency and its employees but means that
farmers have to travel some distance to recover their monies.
Payment of cash directly to farmers by the marketing agency on certain specified days one to two
weeks following delivery of their product to the bulking centre. Requires strong trust on the part
of the farmers and a well organised timetable on the part of the agency. Most appropriate in
areas which are more logistically challenging and harder to reach.
Today we estimate that the CFU and SAJARO networks cover in the order of 50,000 (26%) groundnut
growers in the Eastern Province. With an intense extension and marketing push we aim to double this
number to reach at least 50% of groundnut growing households in four years. By increasing production
per hectare from 364 kg to at least 620 kg (the Malawian average), by reducing time spent shelling
groundnuts 50-fold, and by reducing percentage loss due to insufficient labour to complete shelling, we
estimate that in four years this intervention will increase incomes of 106,000 households by at least 165
USD/year, a 22 % increase in annual income, and a total of 17.49 million USD annually in the Eastern
Province. Year by year from 2016 the support and marketing service will expand to encompass a greater
41
and greater proportion of the 218,005 groundnut growers and to supply a wider range of buyers with a
wider range of products.
Furthermore, by bringing the market closer to farmers and removing the need for a family representative
to travel to town, SAJARO will give the women, those responsible for growing the crop, the opportunity of
selling their crop themselves at a fair price.
Conclusions
Out-growers are viewed as a challenging assemblage to take on, fraught with contractual, good
governance and logistical challenges. Farmers can be better reached, trained and managed with a group
approach and led by examples that reflect their circumstances i.e. champion farmers and demonstration
and training farms. Fair prices and guaranteed markets are the ultimate drivers of successful expansion of
the production base. Out-growers, for their part, must identify and understand the importance of
belonging to a dynamic group, of being linked to a sustainable business and of honouring their side of an
agreement. Success is driven by trust and inclusiveness and achieved by taking a realistic step by step
approach.
Sustainable improvement of productivity and product quality must be driven by an organisation with a
commercial interest in the successful outcome of such efforts, but requires the development of a
business enabling environment by policy makers and donor organisations alike. Long term sustainability is
key, requiring long term commitment and investment on the part of private sector and long term vision
on the part of government and donors.
A tremendous amount of technical know-how already exists within the groundnut sector and is available
to be drawn upon, as is the immense experience developed around successful, commercially driven out-
grower models within the cotton and tobacco sectors. The adoption of an inclusive synergistic approach is
paramount to developing a successful business model for the groundnut sector without re-inventing the
wheel, culminating in a tangible win-win hand up instead of a hand out approach for the small scale
sector.
42
Appendix A
District Organisation Name Contact
Chipata CFU Kenny Silwimba 0965 238092 Comaco Dale Lewis 0977 373747 Comaco Sunduzwayo Banda 0977 918949 Sheni Agric Harry Patel 0216 221022/
0955 886334 EPFC Rosie Hoare 0966 787572 EPFC Whiteson Sinkala Chamber of commerce Josephine Chirwa MACO - Crops Officer Mr Kahalawe 0977 306410 ZARI, Msekera Kennedy Kanenga 0977 371159 Link commodities Mahmoud Ismail Shifa Trading Saturday market Traders Liberty Transport/ Wholesale Zauddin Patel 0955 886353
Chipata CFU Abraham 0965 238107 - Chiparamba Farmer (M) Isaac Sakala Farmer (F) Margaret Phiri Farmer (M) John Ngoma Farmer, CFU Lead Farmer, buying agent (F) Lilian Banda
Chipata Group of 8 farmers (8 F) Eunice and Annie Banda + 6 - Sangalala CFU Lead Farmer (M) Duncan Moyo 0964 415570
Chipata Farmer (M) Solomon Ngoma - Steven Village Headman/Farmer (M) John Zulu Farmers (1 M, 1 F) Fackson and Annie Peace Corps volunteer Tom Long 0973 320951
Chipata D1 Oils Extension Agent Martin Chipoya 0978 344623 - Mtenguleni Farmers (1 M, 1 F) Mr and Mrs Lungu Farmers (1 M, 1 F) Mr and Mrs Tembo Group of 4 farmers (2 M, 2 F) Mr & Mrs Shawa, Ziyelesa
shawa, Christine Banda
Chadiza D1 Oils Extension Agent Silvester Mbewe Groundnut buying agent, Sheni (M) Kelias Phiri
Chadiza Farmer (F) Mrs Mwansa - Chanjowe Farmer (M) Nefati Banda Farmer (F) Alina Banda Farmer (F) Elizabeth Mpasha
Lundazi CFU - Regional Manager, Lundazi Clement Mwankontami 0965 238140 CFU Field Supervisor Tiza Phiri 0977 430852 Group of 16 groundnut farmers (11 M, 5 F) Aliboo Trading company Aliboo 0977 221925
Katete CFU Field Supervisor Obby Hlema 0965 238096 CFU Field Supervisor Robert Nyambe MACO Crops Officer Holmes Lubanzi 0977 703984 D1 Oils Extension Agent Grace Banda 0977 473515 Keson's Enterprises ? 0977 967053 Export Trading Company Kesias Mwansa
Katete - Kankohomba Village
Group of 4 farmers (1 M, 3 F) Sese Mwale + 3
Katete - Kasongo Village
Group of 40 farmers (10 M, 30 F)
43
District Organisation Name Contact
Petauke CFU Field Supervisor Fraser Tembo 0965 238094 MACO - DACO Mr Sikombe MACO - Senior Agricultural Officer 0976 846270 Export Trading Company Zaks Sakala, Kelvin 0977 872731
Petauke Group of 14 CFU farmers (3 M, 11 F)
Petauke - Nyampande
Group of 11 farmers (1 M, 10 F) Gertrude Lungowe
Nyimba MACO - DACO Christopher Mpolomoka 0977 576500/ 0966 576500
Comaco Handsen Mseteka 0977 707297 Comaco Mathias Lungu
Nyimba - Makeni Village
Farmer & Camp Chairperson (F) Lucia Chewe
Nyimba - Wakeni Village
Seed producers (1 M, 1 F) Bernard Daka, Mrs Banda
Nyimba - Zuwalinyenga Village
Group of 3 farmers (3 M) Samson Tembo, Jackson Zulu and son
Lusaka Zamseed Enoch Mbewe 0211 243 762 Zamseed - Marketing Manager Zack Musonda SARO Richard 0211 241477 Freshpikt - MD Midge Drakes 0974 777552 Freshpikt/ Jungle Beat - groundnut buyer Pieter Nieuwoudt 0978 537322 Musika Rob Munro 0977 475906 MRI Jerry Greave
44
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