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BMGF Sub-Saharan Africa Vegetable Market Opportunity
Macro Opportunity Assessment
12 January 20096 of 80 Slides
Certain vegetable commodities are prominent across Africa – in particular tomatoes and onions constitute ~20-35% of vegetable consumption in SSA
2
Other Vegetables
Onions
Tomatoes15%
66%
12.2
West Africa
9%
12%
72%
4.8
East Africa
6%
22%
79%
2.3
0%
100%
14%
Central Africa
20%10%
20%
30%
40%
50%
9%
70%
80%
90%
76%
2.1
South Africa
60%
2003 Consumption of vegetables in SSA(in M’s of tonnes)
Main vegetable commodities in both West and East Africa
Exotic:•Primary
• Tomatoes• Onions
•Secondary• Peppers• Cabbage
Indigenous:•Primary
• Amaranth• African eggplant• Okra
•Secondary 1
• Spider plant• Night shade
As incomes rise people tend to shift from consumption of indigenous to exotic vegetablesGrowing demand for exotic vegetables in urban areas particularly tomatoes and onions
1) Demand varies by country and regionally within a country
Note: Consumption includes both fresh and processed vegetables, including watermelons and other melonsSource: FAO; expert interviews
Tomatoes and onions are the two most consumed vegetables in SSA constituting between ~20-35% of vegetable consumption within each region
Tomatoes have relatively high nutrition balance scores and are the most locally produced vegetable in SSA
3
50
55
60
65
70
75
80
85
90
95
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Okra
Onions, dry
Peas, green
Pumpkins, squash and gourds
Spinach
Tomatoes
Eggplants (aubergines)
Cabbages and other brassicas
Cucumbers and gherkins
Carrots and turnips
Asparagus
Artichokes
Lettuce and chicory
Garlic
2007 Sub-Saharan Africa Vegetable production (in Ks of tonnes)2
Vegetable nutrition balance score (NBS)1
1Source: www.nutritiondata.com2Source: FAO Production statistics
2007 SSA vegetable nutrition and availability analysis
3Note: Used “lettuce, green leaf” balance score for ‘lettuce and chicory” balance score; used “carrots” balance score for “carrots and turnips balance score, used “cucumbers” balance score for “cucumbers and gherkins” balance score; used “cabbages” balance score for “cabbages and other brassicas” balance score
Production statistics on African indigenous vegetables are not widely reported, but nutrition balance scores for certain indigenous vegetables are: reported.
NBS:Amaranth: 79Kale: 85
Many indigenous vegetables have high nutritional content, they are relatively very high in calcium, vitamin C and iron as compared to onions and tomatoes
4Source: "Advancing urban agriculture through use of indigenous vegetables: African experiences; Chapter 3”, by Ray-Yu Yang and Gudrun B. Keding
194
186
44
135
157
9
270
23
9
75
113
37
120
157
10
42
7
30
3
2.2
0.9
1.7
1.3
1
3
0.2
0.6
4.4
4.4
1.8
3.3
3.2
1.1
3.5
1.1
0.9
5.8
2.7
0.4
4.6
0.9
0.5
1.7
0
0.2
Ind
ige
no
us
Ve
ge
tab
les
Note: assume headed cabbage is exotic; need
to confirm if leaf cabbage is considered indigenous
or exotic
Challenges Why?
Market Access / Retail
Logistics
Retail / Trade
Wholesale / Processing
Production
Inputs
Finance
PRELIMINARY
Across all vegetable commodities significant challenges exist along the value chain for vegetable production by smallholder farmers
• Input scarcity (i.e. water, quality seed)• Inability to afford quality inputs• Cost/ availability of irrigation
• Low productivity – low yield• High waste• Quality levels not met• No planning, plant what neighbor plants
• Difficult for smallholders to access market directly
• Farmers receive low price for produce
• Lack of cold-storage capacity – many vegetables are highly perishable
• High transport cost
• Difficult to access financing across value chain (farmers, processors, etc.)
• Poor post-harvest infrastructure/cold-chain• Poor/undeveloped roads, ports, transport links
• Lack of available affordable financing• Farmers cannot afford to finance inputs
• Fragmented retail market for fresh vegetables – primarily sold in wet markets and kiosks (though “super-marketization” underway)
• Poor wet market infrastructure (crowded, unsanitary, poor storage facilities, etc.
• Many steps in distribution channel – value captured across chain• Farmers are widely disbursed and have low production volumes• Poor post-harvest infrastructure, cold-chain• Poor quality
• Farmer is a price taker due to limited market access and product perishability
• Consolidation of produce• Poor quality and inconsistent supply• Limited local processing to meet demand
• Poor farming techniques – limited training available• Limited use of pest/ disease management, and poor storage
facilities• Limited market information – limited commercial mindset
• High cost/ limited access and/or information of highquality inputs• Little-to-no use of irrigation• Cannot afford to finance inputs upfront
5Source: Dalberg analysis; expert interviews
6
Executive Summary
• With regard to vegetable markets in Sub-Saharan Africa, West Africa is the largest and most attractive region for investment to increase smallholder farmer income
– West Africa consumes two and a half times more vegetables than East Africa, and comprises 60% of the total vegetable consumption in Sub-Saharan Africa (SSA)
– Even on a per capita basis, West Africa consumes over twice the amount of kg per year (48kg) than any other region in SSA, although none come close to the WHO recommended minimum (73 kg/year)
– Nigeria alone makes up 35% of total vegetable consumption in SSA, and 62% of the consumption in West Africa– While most of the vegetables consumed are produced locally, West Africa imports at least 4% of their consumption from
outside of the region, most of which is from Europe, indicating they cannot meet demand locally
• Three opportunities stand out to increase smallholder farmers income in the vegetable value chain– Tomato Paste: Many West Africa countries are importing tomato paste from Europe and Asia. In 2003, Nigeria and Ghana
imported 46K tonnes ($51M) and 31K tonnes ($30M) of tomato paste, respectively. Though the local processing sector requires further development, there is an opportunity to source fresh tomatoes locally or regionally , reaching 32-94K smallholder farmers, increasing their revenue by up to 700% if the necessary interventions occur (irrigation, training , etc. )
– Onions: There is also a large market for onions in West Africa; in 2005 187K tonnes ($26M+) were imported a year from Europe into four countries (Senegal 95K, Cote d’Ivoire 44K, Guinea 24K and Mauritania 24K). There is an opportunity to either source this locally or through regional trade, reaching 12-37K smallholder famers and increasing their revenue by up to 300%
– Processed vegetables: There is a large and growing global market for processed vegetables. There are opportunities to link smallholder farmers to vegetable processors focused on out-of-region export. Frigoken in Kenya works with up to 65,000 smallholder farmers increasing their income by up to 400% ; this model could be expanded and/or replicated
• To capture these three opportunities, interventions with different partners are required– Though the challenges and risks vary across the three opportunities, there are some common themes:
– Support smallholder farmers through enhanced production and post-harvest handling techniques, including improved seed; irrigation; etc.
– Organize farmers for ease of implementation– Link farmers to a guaranteed, transparent market that they can rely on to sell their goods– Support local processors, where relevant, through soft-financing, managerial training and business model advice