Why isn´t Colombia the LAC version of Thailand for the cassava crop?

Global Futures and Strategic Foresight Project Policy, Institutions and Markets CRP

Cassava Value Chains WorkshopCIAT, Cali, ColombiaAugust 24-26, 2016

BERNARDO OSPINA PATIÑOExecutive Director - CLAYUCA Corporation

b.ospina@clayuca.org

WHY ISN´T COLOMBIA THE LAC VERSION OF THAILAND FOR THE CASSAVA CROP?

THAILAND – A CASSAVA KINGDOM

Source: Klanarong Sriroth, (SCST). Kasetsart University & BIOTEC. 2013,

CASSAVA – A CASH CROP FOR THAILAND FARMERS

Source: Klanarong Sriroth, Outlook of Thai Tapioca Industry, World Tapioca Conference, 2013,

CASSAVA – AN INDUSTRIAL CROP

Source: Klanarong Sriroth, Outlook of Thai Tapioca Industry, World Tapioca Conference, 2013,

Source: Thai Tapioca Starch Association, TTSA (2010)

CASSAVA IN THAILAND: CONSOLIDATED MARKET STRUCTURE

Thailand: World N. 1 Cassava ExporterCassava Exports

Source: Klanarong Sriroth, Outlook of Thai Tapioca Industry, World Tapioca Conference, 2013,

Thailand Cassava Sector

Source: Klanarong Sriroth, Outlook of Thai Tapioca Industry, World Tapioca Conference, 2013,

Cassava in Latin America and the Caribbean:

Maize and cassava plants

Mochica culture – Peru

Museum Amano, Lima, Perú

1300 AC

An ancient culture

Cassava Innovation in Colombia:

1980´s

First public sector-initiated effort topromote cassava agroindustrial development

with small-scale farmers

The North Coast of Colombia, 1980´S

• Population poor by national standards

76% vs. 64% with unsatisfied basic needs

55% vs. 36% in misery

• Semi-arid region with few crop alternatives:

cassava : one of the most popular crops

• Important for food security and cash income

40% of small farmers income

• Employment generator:

7.3 million wage-days per year

Colombian Political, Economic and Social Environment in 1980s

• Import-substitution policy to protect nationalproduction

• Integrated Rural Development (IRD) approach: (subsidized credit, land reform, research, technicalassistance )

• External donor support: CIDA, WFP

• Organizational processes in place as a result of social struggles to secure access to land

Agricultural Development Model

The Challenge• High cassava production as a result of

land reform and DRI-program credit

• Stagnant demand for fresh cassava: depressed prices

• Massive credit default

• Failure of initial DRI-program basicpremise

• CIAT help requested to find a solution

CIAT in the 1980s

Commodity-based Program with multi-disciplinaryresearch

Lack of adoption of cassava technologies in LatinAmerica created doubts about the impact of cassavaresearch

Demand studies identified new market opportunities for

cassava (animal feed)

Internal planning exercises led to a change in strategy:

research only to R&D

primary production to agri-food chain

ICRDP Methodology

Planning at the macro level

Commercial expansion

Planning at the micro level

Pilot project

INTEGRATEDCASSAVA

RESEARCH &DEVELOPMENT

PROJECTS(ICRDPs)

Best-bet Solution

Experience on cassava dryingrelated to Asia (Thailand)

Public-sector Initiated Innovation Process

Technologicalprototype simple,

small-scale and withlow investmentrequirements

Organizationalprototype based onsmall-scale farmergroups of 25-30 farmers to manage theemerging rural agroindustries

ResearchTechnical

AssistanceMarketing Organization Credit

Strong Public Sector Involvement

Small Cassava Farmer Organizations

DRI-Program

CIDA WFP

CORFAS

ICA

Caja Agraria

INCORA

CIAT

SENA

DANCOOP

CECORA

CORFAS

Caja

Agraria

CORFAS

ICA

CIAT

CORFAS

CECORA

Private Sector participation in the Innovation Process

• Private sector role : end-user; the market

Out scaling of dry-cassava agroindustries: (1981-89)

0

1000

2000

3000

4000

5000

6000

7000

8000

1981 1982 1983 1984 1985 1986 1987 1988 1989

Pro

cessin

g C

apacit

y (M

T)

Year

Cooperatives Private Entreprenuers

Trends in cassava prices paid to producers in the North Coast of Colombia, 1975-90

0

50000

100000

150000

200000

250000

Year

Fresh Market Dry-cassava Plant

- 6.2 3.5

0.03

Start of

the ICRDP

PeriodCol $ / kg (1998)

Trends in Cassava Area and Yield in the North Coast of Colombia, 1975-93

0

2000

4000

6000

8000

10000

12000

0

20000

40000

60000

80000

100000

120000

140000

75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93

(kg

/ha)

(ha)

Year

Area Yields

-0.4

-2.1

0.6

7.0

Start of the

ICRDP

Period

“Before, we didn’t eat three meals per

day… if we had breakfast; we didn’t have

lunch. And now… I said that there was a

change. When we got this land in 1971,

we used to plant a quarter or half of an

hectare… and now we even plant 5

hectares with cassava. Therefore, things

have improved.

Don Carlos, cassava farmer and member of COINPROSAN, Segovia, Sampués, Sucre

“I was able to support my family, educate

my children… Since these programs came,

my life has changed from a poor peasant

who didn’t have anything to a peasant who

has enough to eat... I have already told you

that all my children are professionals… all of

them because of the land reform and the

DRI-program.

José Ortega, cassava farmer and member of COAPROBE, Montañita, Betulia, Sucre

Voices of Impact

The Political, Economic and Social Environment in the 1990s

• Free market policies, economy open to to external competition

• Massive imports of grains to attend the growing demand of the feed industry in Colombia (1 million TM per year)

• Donor and public sector support reduced to a minimum

• Competitiveness based on lower wages and only marginally on innovation

• Limited access to credit

The new macro-scenario, 1990s

• Public sector: reduced support to a minimum and places policies that affect the agroindustry negatively

• Donors: absent

• Local support organizations: replaced public sector and donor support

• Private sector: continued to act only as end-user

Trends in Cassava Area and Yield in the North Coast of Colombia, 1975-99

0

2000

4000

6000

8000

10000

12000

0

20000

40000

60000

80000

100000

120000

140000

(kg/h

a)

(ha)

Year

Area Yields

-0.4

-2.1 0.6

7.0

-0.2

-1.3

Start of ICRDP

0

50000

100000

150000

200000

250000

(19

98

$C

ol/

Kg

)

Year

Fresh Market Dry-cassava Plant

- 6.2 3.5 - 5.0

11.2

0.03- 4.4 0.01

Start of the

ICRDP Period

Start of

CLAYUCA Period

Trends in cassava prices paid to producers in the North Coast of

Colombia, 1975-99

Trends in cassava prices and dry cassava production in the North Coast of

Colombia (1981-2001)

0

10000

20000

30000

40000

50000

60000

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

Pro

ducti

on (M

T)

Pri

ces

(19

98

$C

ol/

Kg

)

Year

Dry-cassava prices Cassava roots prices Dry-cassava production

-0.02-5.5

62.4 -11.3

Start of the

CLAYUCA Period

74.8

1.6

Small-scale

Mostly land rentersfew landowners

No inputs

Organized intoassociations

Yield = 10-12 MT / ha

0.5-1.0 ha

SMALL-SCALE CASSAVA FARMERS –COLOMBIA NOTH COAST, TODAY

CASSAVA VALUE CHAIN DYNAMICS(SMALL-SCALE, LANDLESS FARMERS); 12 MT / ha

Dry cassava chips offers negative returnto farmers and processors

11.3

9.2

11.3

21.8

14.9

0

10

20

30

40

50

60

70

80

USD

/ M

T o

f ca

ssav

a ro

ots

Dry Cassava Chips Production costs(Share of production costs for dry cassava chips

Harvesting

Weeding

Land rental

Planting

Land preparation172.5

-13.1

3.4

23.7

-15

35

85

135

185

Farm gate pricecassava roots

Transport Processing cost Producer margin

USD

$ /

MT

dry

cas

sava

ch

ips

Value distribution (Relative costs of producing 1 ton of dry cassava chips from

2,6 t of fresh cassava roots)

Small- to médium-scale

Mostly land renters , fewlandowners

Use modern inputs (fertilizers, herbicides, credit, technicalassistance, administration)

Organized into primary- and secondary-degree associations

Yield= 20 MT / ha

Yield = 8 MT dry cassava chips /ha

FARMERS ASSOCIATION (Producers and Processors, dry cassava chips) chips processors)

FARMERS ASSOCIATION (Producers and Processors, dry cassava chips) chips processors)

CASSAVA VALUE CHAIN DYNAMICS(Farmers Association, Commercial Scale); 20 MT/ ha; 8 MT dry cassava chips / ha

Dry cassava chips offers a fair return to farmers and processors

Source: ANPPY, 266 hectáreas Project; 2013.

11.9

24.3

23.3

61.9

41.4

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

US$

to

n d

ry c

assa

va c

hip

s

Dry Cassava Chips Production Costs(Share of production costs)

Land preparation

Hand Labor

Inputs

Harvesting &Drying

Indirect Costs

162.7

20.3

50

70

90

110

130

150

170

190

cus

$ /

to

n o

f d

ryca

ssav

ach

ips

Value distribution(Relative costs of producing 1 ton of drycassava chips from 2,6 t of fresh cassava

roots)

Production costs Farmers marginncosts

CASSAVA VALUE CHAIN DYNAMICS(COMMERCIAL-SCALE FARMER, PROCESSOR, COMMERCIALIZER); 25 MT / ha

Commercial-scale

Mostly land renting

Use modern inputs (fertilizers, herbicides, credit, technical assistance, administration)

Yield= 25 MT / ha

CASSAVA VALUE CHAIN DYNAMICS(COMMERCIAL-SCALE FARMER, PROCESSOR, COMMERCIALIZER); 25 MT / ha

6.8

5.7

9.1

17.0

6.1

14.0

10.8

5.4

0

10

20

30

40

50

60

70

80

90

US

$ /

MT

fres

h c

assa

va r

oo

ts

Fresh cassava roots production costs(Share of production costs)

Contingencies

Land Renting

Harvest

Pest & DiseaseControl

Fertilizer & LimeApplication

Weed control

Planting &Seeds

Landpreparation

CASSAVA VALUE CHAIN DYNAMICS(COMMERCIAL-SCALE FARMER, PROCESSOR, COMMERCIALIZER); 25 MT / ha

FRESH CASSAVA MARKETS OFFERS THE HIGHEST RETURN(FRESH; FROZEN; PARAFFIN-COATED)

75

67.8

30.5

98

170

237

0

50

100

150

200

250

300

350

400

450

Production Costs Processing costs Transportation Producer marginfresh roots

Producer marginfrozen cassava

Producer marginparaffin-coatedcassava roots

US

$ /

to

n f

resh

cas

sava

ro

ots

Value distributionRelative costs of producing 1 ton of fresh cassava roots

CASSAVA VALUE CHAIN DEVELOPMENT IN COLOMBIA

PRODUCTION

PRODUCTS

PROCESSING

CASSAVA VALUE CHAIN DEVELOPMENT IN COLOMBIA

PRODUCTION

PRODUCTS

PROCESSING

POLICY

GRACIAS!

BERNARDO OSPINA PATIÑODirector Ejecutivo – Corporacion CLAYUCA

b.ospina@clayuca.org

THANK YOU!