Oluchi Chibuzor
Cassava (Manihot esculenta) is a perennial woody shrub that has an edible root that was first cultivated in South America and introduced to Nigeria in the sixteenth century. Cassava is considered a source of food for the poor and has been widely criticized for its propensity to deplete soil nutrients and opens the farmland to erosion.
Based on the aforementioned, a large proportion of cassava crops are grown on marginal lands (bad topography) that are usually not competitive (not too good for other crops) and some others are not tractor friendly.
Another complication around cassava production is that the type of land tenure system in Nigeria and other countries in sub-Saharan Africa does not allow for large farm holdings suitable for mechanisation. Most cassava farmers cultivate small farm areas, which are not conducive or economical for mechanisation.
Despite these challenges, cassava is one of the fastest expanding staple food crops in cassava-consuming countries and has continued to gain prominence among farmers while the industrial demand is also rising consistently, according to the Food and Agricultural Organisation (FAO).
Globally, cassava has experienced consistent growth of well above three per cent annually According to the FAO, as of 2018, world cassava production stood at about 278 million tonnes; Africa total production was about 170 million tonnes (about 56% of world production) (FAOSTAT, 2019).
Nigeria is the largest global producer of cassava with its production accounting for 21 per cent of global production of cassava but Nigeria, does not participate in the global processed cassava market (298.8 million tons).
Cassava production in Nigeria is principally in the hands of smallholder farmers who produce cassava primarily for the traditional food market previously and now transiting for industrial end-users.
The Nigerian Cassava Production systems are inefficient based on global standards. Majority of the cassava production systems are not oriented to the industrial market. An estimated 30 million farmers are involved in cultivation of cassava. Despite the huge population of cassava farmers, Cassava yields are still sub optimal.
Market trends also indicate unmet demands for cassava products from the food, livestock, textile, and pharmaceutical industries.
While there are many industries in Nigeria such as those involved in the production of ethanol, food noodles, drilling mud, textiles and paper mills among others, which need cassava products, very few cassava processing factories are available compared to the optimum market potential. This has been attributed to the lack of application of a value chain approach capable of delivering a range of new technology to access opportunities in an integrated manner to achieve economies of scale and scope for profitability and competitiveness.
The Nigerian cassava sector distinguishable into two categories: the traditional food-oriented component and the new emerging industrial component.
The bulk (about 90%) of the fresh cassava roots (FCR) produced annually is channelled into the traditional sector while about 10% of total FCR goes into the industrial sector. Much of the activities operate in a neat configuration of traditional institutions, synchronizing cassava production, processing, and marketing.
Exports of cassava products, new convenient products from cassava and products made from cassava (Starch, Ethanol, HQCF, etc.) are beginning to appear in markets.
Cassava industry local and international Market intelligence is very poor or non-existent in some regions, hence Cassava value chain stakeholders run independent sector silos strategy which has made it difficult for aggregation of marketing and logistical opportunities, and benefits of economies of scale and scope, to achieve profitability and earn investor plus financial institutions confidence.
Concerted efforts are required to effectively position Nigerian cassava in regional and international markets to ensure sustainable development of the sector and ensure improvements in the production, processing, and marketing of cassava without negatively impacting on the food security of the country.
These efforts will equally lead to increasing the contribution of cassava to economic transformation through key stakeholders’ involvement and building an agribusiness economy capable of delivering sustained prosperity for food security, exports promotion and sustainable income and job growth.
This forward looking for the cassava sector can only be actualised by:
i. Identifying and developing new market opportunities for import substitution and export.
ii. Stimulating increased private sector investment in the establishment of export-oriented cassava industries.
iii. Ensuring the consistent production and supply of fresh cassava roots with high starch content to end user industries
iv. Advocating for supportive policy and institutional reforms for the development of the Nigerian cassava sector.
v. Facilitating the establishment of targeted support infrastructures that will reduce transaction cost and increase competitiveness of the entire cassava commodity chain in Nigeria.
vi. Integrating the rural poor especially women and youths into the mainstream of the National Economy.
Investment Outlook
The investment outlook gives a clear picture of the investment required to effectively drive the vision of transforming the cassava sector into a US dollar industry. This will require additional investment in the establishment of processing facilities to produce food grade starch, ethanol, high quality cassava flour, and glucose syrup.
This will also open export market for these products in the West Africa Sub-Region. The establishment of additional plants will also lead to cultivation of additional hectares of land for cassava. The bulk of the investment is in the traditional food chain of gari, fufu, lafun etc. and the increasing trend of production of packaged foods for both local and international markets. The ethanol production facility will also have a huge investment for both set up cost and the fresh cassava root requirement.
Currently, a sorbitol plant is at the stage of commissioning, and it is the first of its kind in the country and it will be using cassava as raw material. There is still an untapped opportunity in modified starches that can be produced in-country and exported to earn more foreign exchange for the country. Other investors are installing HQCF, ethanol and starch processing facility.
Cassava processing equipment fabrication is also another area of investment in the country with some Nigeria fabricated equipment being supplied to other African countries. The equipment that has left the shores of the country include the flash dryers, automatic garri roaster, hydraulic presser, stainless steel roasting pans, graters, wet and dry hammer mills.
Socio-economic Benefits of Industrial Cassava Sector
The economic and market potential of a realistic demand for industrialisation and commercialisation of cassava is enormous. Several US dollar million worth of cassava is bought annually for industrial processing from smallholder farmers scattered in 26 States of the federation and they are economically empowered leading into improved livelihood as new investors are coming into the sector.
Additional cassava processing factories are needed to position Nigeria in the right pedestal for cassava industrialisation. Also, the country requires two more cassava based large ethanol factory that will produce at least 500,000 litres per day to complement the four functional ones; the country requires 8 more High Quality Cassava Flour factory to add on to the existing one. Moreover, 2 more additional glucose syrup factories are needed. In creating the multi-billion cassava industries, the aforementioned must be pursued and achieved in the next five years.
Twenty-six out of the 36 states in Nigeria cultivate cassava in large volume; this makes cassava a national food crop and a new face for industrialising the agricultural sector in Nigeria. Only cassava farming provides a source of livelihood for about 300 million people in Sub Saharan Africa and about 40 million people in Nigeria. Cassava is grown in two planting seasons in Nigeria, March – April (North)/ March – May (south) and November – December (North)/ November – January (south) depending on the rainfall pattern.
Harvesting of cassava starts from nine (9) months till twelve months after planting for the best starch content yield. Capitalising on the crop’s industrial potential will generate additional income for farmers and drive domestic industrial growth that creates jobs and reduces reliance on imported commodities like wheat, starch, and ethanol.
It should be stated that it takes a total of about 150 man-days to cultivate, manage and harvest one hectares of cassava farmland considering that most smallholder farmers do not have access to the use of tractors.
The cultivation of the FCR required for the production of the various cassava-based products in-country still needs to be improved upon as most of the cassava processing factories are operating below installed capacity due mainly to the inadequate supply of FCR with high starch content, dry matter and at the right price.
With the advent of the COVID – 19 pandemics with the public advocacy campaign for the use of hand sanitiser, the demand for ethanol increased drastically as this is a major ingredient to produce hand-sanitiser and cleaning agents for surfaces. The quantity of hand sanitiser and cleaning agents produced in-country is yet to be determined and the volume of ethanol required cannot be less than tens of million additional litres annually.
The land size required to cultivate the quantity of fresh cassava roots required to produce ethanol demanded in-country is 61,538.5 hectares, which is almost the total land mass of the country. This is just one of the cassava derivative and so alternative raw materials must be considered for ethanol production that will meet up with the quantity demanded. The table above also states the land mass required for the FCR quantity needed for other cassava-based products.
Abass et al. (2014) have argued that without mechanisation, using improved inputs alone will not sufficiently boost cassava production in Nigeria.
Regulatory Framework
In Nigeria, staple foods, including cassava and cassava products have not been within the government regulatory framework. Despite the clear dominance of extra-governmental regulators in the Nigerian cassava sector, recent developments culminating in the emergence of a growing cassava industrial sector and the Presidential Initiative on Cassava are directing the attention of government regulators in standards, food and drugs administration, weights and measures, phytosanitary inspection, and consumer protection to the cassava sector. The Standards Organisation of Nigeria (SON) was established to investigate the quality of facilities, materials, and products in Nigeria, and establish a quality assurance system, including certification of factories, products and laboratories.
The SON standards for cassava products in Nigeria have just been produced as a direct outcome of the current emphasis on developing the emerging cassava industrial sector. The standards cover quality expectations of processes and outputs of cassava enterprises, packaging and labelling, specifications for local and export markets, and requirements to qualify from various categories of standard labels.
The emergence of clear standards from SON for various cassava products portends a good omen for NAFDAC’s ability to determine adulteration of cassava products, identify appropriate labels and packages and prescribing standard compositions of cassava products.
In the marketing of cassava roots and cassava products, volume measures are still the norm. The vast volume of cassava and cassava products passing though informal channels into and out of Nigeria have not been assessed by this agency.
Enabling Policies Required
Policies provide guidance, consistency, accountability, efficiency, and clarity on how an initiative, programme or project operates. This provides the implementation framework in terms of guidelines and principles for the organisation or teams to follow. There are policies that should be implemented and promoted to achieve the multi-billion US$ cassava industry
Agricultural Policy
• Support Publicity on HQCF inclusion policy as Private Public Partnership
The Federal Government of Nigeria (FGN) planned to reduce wheat importation by implementing 10 per cent high quality cassava flour (HQCF) inclusion in bread policy. The benefits of the policy include increased gross domestic products (GDP), increased agricultural productivity, food security, foreign exchange savings, employment generation, and wealth creation. Efforts should be made to enforce this paper policy as this will bring about additional investments in the establishment of large scale HQCF factories in the country.
• Promotion of local content in Cassava industrialization
The Presidential Initiative on Cassava has created a lot of opportunities for the industrialisation of the crop to acquire a core position in the economy. One of the main objectives of this approach is to promote the adoption of improved and profitable post-harvest and processing technologies as well as new product(s) development. The local content in cassava industrialization initiative will draw the required attention to the potentials of cassava as an industrial raw material for the production of starch, ethanol, glucose syrup, etc in Nigeria.
• Promotion of crop cultivation insurance contracts policy excluding exogenous default risks
Conventional Insurance companies should have insurance policies for farmers and farming operations as this will give some level of indemnity and will bring more players into agricultural insurance sector and boost productivity. Also, just as the commercial banks have agriculture departments so also, insurance companies should be made to have agriculture departments with agriculture insurance policies for the various agricultural production units
Trade Policy
• Import restriction on cassava-based products and close substitutes
Nigeria introduced bans on the import of various products in 2002, which have been repeatedly modified since. The list of import bans has been reduced in the last years but did not disappear. Under the “Tariff Book 2008-2012” import bans have continued for 26 product groups including: poultry, pork, beef, eggs, vegetable oil, noodles, waters, beer, bagged cement, some medicaments, soaps and detergents, corrugated paper and paper boards, some textiles, industrial gloves, footwear, bags, furniture etc.
In January 2011, a limited number of items were delisted (toothpicks, cassava, ready-made garments, certain types of furniture). Import restriction on cassava-based products and close substitutes is key to the industrialisation of the sub sector and should be enforced by government. There are packaged garri coming into the country in recent times.
• No Import Duties on Agricultural machineries and agro processing equipment
Government should encourage investors in cassava industries by giving low or no import duties on Agricultural processing equipment and farming equipment that are not produced locally. This will bring down the cost of investment and boost industrialisation of cassava business.
• Single digit credit facilities for cassava value chain actors on clear financial products
Loans and other credit facilities for food and agro-allied players especially cassava processors, farmers and some other stakeholders should enjoy single digit credit facilities from the lending institutions. This will help the investors and show the commitment of government to the sector.
• Tax holiday for new investors in the commodity value chain sector
Pioneer status should be given to new investors in the food and agro-allied sector in Nigeria, which will give each new entrant a tax holiday of about five years that will allow the business to stabilise before paying tax to the government. During this period, no corporate income tax is payable and any dividend distributed from the pioneer profit will be exempted from withholding tax. Players in the cassava industries should enjoy similar consideration to assist the industry to grow and flourish.
Road Map to achieving a multi-billion US$ Cassava Industry in Nigeria
For the transformation and realisation of the multi-billion US$ cassava industry the road map will involve:
• Ensure the consistent supply of fresh cassava roots to end user industries by targeting Increased Productivity per unit area and ensuring that farmers are clustered around processing factories. This should involve the commercial production of fresh cassava roots with high starch and dry matter content that will be affordable to the industrial end-users
• Stimulate increased private sector investment in the establishment of export-oriented cassava industries – products, equipment, etc.
• Facilitate the establishment of targeted support infrastructures
• Promote result-based funding of extension services
• Collaboration among Cassava Based Projects on the Cassava Industry Development Goal.
Recommendations to Drive Cassava Commercialisation
To achieve the multi-billion US$ cassava industry that will spur rural industrial development, generate millions of new jobs, create wealth for over 45 million people, as well as assure food security, the following recommendations are proposed.
Governments
• Provide incentives (tax holiday, zero import duties on processing equipment, single digit interest rate, etc.) for new investors
• Promote local content policies across industries to create strong incentives for end users to adopt products and create guaranteed markets for processors
• Invest in infrastructure that reduces the challenges and costs of sourcing cassava
• Fund continued research and development to develop better varieties with high starch content for processing
• Support companies in accessing export markets by hosting or attending trade shows and conferences
• Establish land clearing Agency that will be responsible for clearing land for agricultural purposes. This is key as smallholder farmers cannot bear the cost of land clearing thereby limiting expansion of farmland holdings.
• Provide adequate funding for the extension service providers for better reach/coverage
Donors and Non-Profit Organisations
• Funding advocacy to encourage implementation of policies that incentivize use of cassava products
• Fund research efforts and pilot projects to demonstrate feasibility of substitution to end users across industries
• Support processors in improving linkages with smallholders to reduce upfront investment required by companies
• Collaborate so as to avoid duplication of efforts within the sector during implementation of cassava-based projects
Processors/End Users/Investors
• Explore opportunities for backward integration into local processing (end users)
• Invest in commercial farming operations to secure part of supply necessary, lower input costs, and provide a model/training farm for out-growers (processors)
• Invest in developing out-growers/contract farming programs to build strong relationship with suppliers and ensure reliable supply of raw materials
Capacity Development for Cassava in Nigeria
Capacity needs of the farmers, processors and other key stakeholders that must be overcome to develop the various cassava value chains are listed below:
• Farmer Business School Trainings (Learning more about Good Agronomic Practices, Stem Multiplication Trainings, Record keeping, Farmer Group Dynamics Development Trainings and Sustainable Agriculture Code); Mechanisation training (Proper land preparation using tractors).
• Quality Management Trainings: learning more on Standard Operating Procedures, Production Management Trainings (Good Manufacturing Practices), Health, Safety and Environment Training and Equipment Maintenance and Repairs Trainings
• Market and Financial intelligence to facilitate access to value chain finance, e.g. agro-based financial institutions and market penetrations.
