Preliminary Value Chain Analysis, Nigeria YIIFSWA, Planning Workshop, IITA, Ibadan 29 March 3 April, 2012
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1 Preliminary Value Chain Analysis, Nigeria YIIFSWA, Planning Workshop, IITA, Ibadan 29 March 3 April, 2012
2 Introduction Yam sub-sectors offer potential for income generation for farmers Require greater integration into & management of supply chains Vision to view farmers as value chain participants Initial value chain scoping study to: Determine location of ware and seed yam farmers Characteristics of different supply chains Identification of production areas, markets, production systems Collaboration with IITA, UNAAB, NRCRI, DDS
3 Areas Visited March 2012 Mixture of production, trade, and consumption areas agreed with all parties Production areas Market & Consumption areas
4 Yam Demand / Consumption Most yam consumed domestically, esp. via large urban markets Most consumers demand / prefer fresh ware yam Some increase in markets for processed yam in recent years If yam prices are high some consumers switch to gari or cereals consumption depending on their income Consumption of yam in the off-season (Apr to Aug) increasing Regional and export sales appear to be relatively low (both for fresh and processed yam products)
5 Yam Production (2008) Total approx. 35,000,000T 67% global production Niger largest producer state Yam produced in all central and southern states Source: Fu et al (2011)
6 Ware Yam Farmers Production On average 70% ware yam is produced for sale, 30% for household consumption / seed yam provision Crop production ranked by quality and value of returns (Oyo North) 1. Yams (N100, ,000 per 2T pick-up) 2. Maize 3. Cassava (N9,000 per 2T pick-up) 4. Other crops e.g. vegetables, sorghum, peanuts, rice Varieties: mostly white yam (Rotundata), some water yam (Alata) Peak season: October+ ; scarcity April/May Milking of yam July for early (lucrative) sales & seed yam
7 Traditional Ware Yam Production Cycle (eg N. Oyo) Different yam matures at different times; traditional cycle: Month Activity Cost per stand (N) Actor Nov Land clearing 3 Men Nov/Dec Tilling, heaping 4 Men Jan-March Staking (bamboo) 1 Men Nov-March Planting 2 Men Nov-Dec Mulching 1 Men Apr-Aug Weeding 1 Women Aug-Dec Harvest 5 Men Various Transport farm to market TOTAL 21 4 Men
8 N. Oyo Seed Yam, and Marketing of Ware Yam
9 Ware Yam Farmer Gross Margin (e.g. N.Oyo) From anecdotal data, example of a farmer s gross margin: From 4000 heaps, farmer loses 10% from lack of rain / disease For an average tuber a farmer receives N80, out of that: N20-25 for labour, inputs and local transport (previous slide) N30-35 for seed yam (or opportunity cost of self supplying seed yam) On average farmers keep 1/3 of the price they receive per tuber as profit Farmer on average incurs post-harvest losses of 10-20% (insects, rotting)
10 Ware Yam Trading Normally farmers take their yam to district level assembly market Larger urban market wholesalers purchase from district markets Negotiation is facilitated by a buying agent Yam is bought / sold on cash & carry basis No formal grading system exists for ware yam Retailers purchase from larger urban market (e.g. Lagos, Ibadan)
11 Ware Yam Supply Routes (e.g. Ibadan) Niger State Abuja Nassarawa Suleja Ado (Ekiti) Igboho(N.Oyo) Ilorin Akure (Ondo) Owo (Ondo) IBADAN Abeokuta ShaSha Eruwa Ijebu Supply into Ibadan Supply from Ibadan
12 Ware Yam Logistics (into Ibadan and Lagos) Many traders spoke of the following sourcing strategy: 1. Ekiti / Ondo states June/July+ 2. Oyo North August+ 3. Abuja (Niger) October+ Ibadan (Bodija Mkt) approx. 3500T fresh yam/week arrives Lagos (Kosofe Mkt) approx. 7200T fresh yam/week arrives Average trader may sell approx tubers/week Selling yams harvested approx. 2 months before sale Various size transport: 10T, 15T, 30T trailers
13 Traditional Dried Yam Products (e.g. Kosofe Mkt) Gbodo (65% of total, mostly from N Oyo, Kwara) Pasa-pasa (25% of total, mostly from Benue, Taraba) Keso (10% of total, mostly from Kwara; made from water yam) Main buyers: food vendors Apparently consumption is declining due to poor economy (but price is also going up). Key constraints: high transport costs, and lack of credit / finance
14 Ware Yam Trade Analysis Approximate figures based on initial data collection Wholesaler Buys at N/Tuber Wholesaler Sells at N/Tuber % difference (on-cost) Tuber Size Season Small/Medium Off/Peak Medium/Large Off/Peak Large Off Sale prices higher in off-season (March to August) Anecdotally 60-70% of on-cost from (highest cost first): Transport of yam from source to urban market National and local government taxes Loading / off-loading labour costs Therefore wholesaler gross margin approx. 1/3 of sale price
15 Ware Yam Production in Edo and Kogi States
16 Seed Yam Supply Routes (e.g. Edo/Kogi) Illushi (Loading) Ujeh (Loading) Via Benin city & Ore Onitsha (via river) LAGOS (Kosoje market)
17 Seed Yam Production and Markets (e.g. Illushi) Seed yam easier to produce vs. ware yam but less lucrative Seed yam sold based on grading system 4 grades Best grade 1 price = N35,000 / 400 = N75 per seed Seed yam sold from November to March/April (planting season) Many buyers within and outside Kogi / Edo states Witnessed various storage conditions, potentially stored 2 months
18 Seed Yam Market in Illushi
19 Institutions in Value Chain Trader associations (e.g. Ibadan and SW Nigeria); important for streamlining value chain; (e.g. dispute resolution over transport) Agricultural Development Programmes (ADPs); little evidence that farmers have benefited from them for yam production Diocesian Development Services (DDS); very committed, but only work with a small number of farmers Food Crops Production and Technology Station, Ubiacha, Edo State, belongs to Federal Dept. of Agriculture and Rural Development Research institutes (e.g. IITA, NRCRI, NRI)
20 Key Constraints Raised by Respondents Value Chain Actor Constraint Producers Lack of finance to expand production & purchase inputs Lack of infrastructure and inadequate storage facilities Limited / zero extension support Pests, diseases, natural disasters Traders High transport costs fuel, theft, break-downs Poor road network in some areas Lack of finance and insurance cover Breach of agreements by suppliers and customers Multiple taxes / levies on goods in transit Processors High costs of transport Multiple taxation from different levels of government Financial constraints, incl. giving credit to suppliers / buyers
21 Suggested Production Areas & Markets for VCA Mixture of production, trade, and consumption areas agreed with all parties Production areas Market & Consumption areas
22 Summary Points and Recommended Steps Reclassify states based on production of ware & seed yam Organise stakeholder forums with banks on credit access Transfer of technology to farmers through partners Strengthen / establish farmer and trader groups and associations, esp. target record keeping, group dynamics, market linkages Review / establish links between institutions that represent different value chain participants Enquire into current and potential export markets
23 Thank you
24
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