Market constraints and opportunities for cassava in Tamil ... · Two primary products are produced...
1
Cassava (Manihot esculenta Crantz), renowned as a highly productive tropical tuber crop, known to support rural communities for its tolerant production capacity, high caloric value and vast industrial application uses, supports over 10,000 smallholder farmers in the South Indian State of Tamil Nadu. To support objectives for improving food security and rural development, this research has been conducted to assess the value chains associated with Tamil Nadu cassava production. The analysis has been used to better understand the relationship between the value chain actors and market system. The goal of the project was to determine the opportunities and constraints for the Tamil Nadu cassava market, centering around the Salem production hub, including the Districts of Erode, Dharmapuri, Namakkal, Viluppuram, and Salem. Investigating the function of the cassava market system serves to better understand the relationship between the market and farm level production. This information aims to provide leverage points to determine where intervention may have the greatest impact to support market growth and community livelihood lying at the base of the value chain. Introduction • Two field surveys in Tamil Nadu utilizing purposive sampling to conduct interviews and group discussions. • Quantitative and qualitative data were collected from actors and key informants along the industrial cassava value chain. • Key informants included: farmers, industrial producers, producer associations, brokers, traders, cooperative organizations, extension service providers, and government agency representatives. Methods Market constraints and opportunities for cassava in Tamil Nadu, India Riley Linder 1 , Alessandra Giuliani 1 , and KR Ashok 2 Bern University of Applied Sciences, School of Agricultural, Forest, and Food Sciences 1 Tamil Nadu Agricultural University 2 Contact: [email protected] Acknowledgements • Cassava production contributing to industrial markets supports an extensive portion of the rural community. • Well developed production practices and tolerance of cassava serve to overcome water and soil constraints. • Cassava as a base ingredient has the opportunity to support a vast array of markets with continual growth. • Abundant opportunities exist for new product and marketing method innovations. Opportunities Potential markets for industrial cassava products and byproducts are extensive Innovation of production methods, products, and marketing methods Extensive community livelihood support Well established logistics and production network Cassava productivity world record level Innovation of market mechanics and regulation • Continual industry transition is occurring amidst pressure in an unregulated and highly fluctuating marketplace. • Price fluctuation results from supply/demand behavior, lack of regulation, and governance structures. • Price instabilities have been detrimental to starch demand; reducing growth, causing a producer shift towards sago. • This production shift has increased competition, reduced small-scale production units, and provoked adverse production strategies, including potentially irresponsible modernization and product adulteration. Constraints Production modification including chemical adulteration Reduced consumer demand, increased supply Drastic price fluctuations Reduced product demand Market structure shifts, increased competition Decreased farm level production Unregulated marketplace Gratitude is kindly extended to those at the Bern University of Applied Sciences, Tamil Nadu Agricultural University, Swiss Agency for Development and Cooperation, Agrinatura, Tropentag, and the people of Tamil Nadu who have generously supported this work and presentation. Quality Regulatory Environment Sago produced with chemicals (left) vs organically produced sago (right) Some industrial producers seek to increase profits through the use of chemicals during cassava processing. Practices include: • Chemical whitening of starch and sago, aiming to improve product yield and increase whiteness parameter directly connected to market value. • Chemical use to remove impurities such as sand and enzymes serving to increase starch recovery during processing. Although the Food Safety Board prohibits these practices, producers have a clear divide on the use of chemicals. This divide inhibits collaboration along the value chain. The Hindu 2012 The results of this research illustrate a market characterized by significant constraints, which must be addressed prior to addressing supply side, production innovations when considering how to develop livelihood opportunities for the rural communities producing cassava. Market function and demand for cassava based products must be developed and structured in a way that farmers have a considerable desire to function in this marketplace. Conclusion and Recommendations Socioeconomic market knowledge is crucial to create a platform for further innovation such as the development of improved or CMD resistant varieties. Key recommendations resulting from this research include; establishing industrial production standards, further development of industrial quality and safety standards, and the introduction of improved marketing methods. Systems to reduce price fluctuations must be introduced, with further exploration of government market regulatory action. Essential to these recommendations is a collaborative effort towards innovation along the value chain, as growth needs to be pursued collectively to ensure inclusive sustainable market function. These solutions serve to benefit the continual production of an essential crop supporting the smallholder community of Tamil Nadu. Small-Scale Farmer Farm Level Broker Small-Medium Scale Producer SagoServe Primary Wholesaler Secondary Wholesaler Retail Market Industry Level Broker Trader/ Merchant Wholesaler Large-Scale Producer Extension Services KVK TNAU CTCRI Industry Business Services Storage Market Transactions SagoServe Rules and Regulations Tamil Nadu Gov. & Regulatory Agencies Food Safety Board Environmental Safety Board Electrical Board Support Activities Enabling Environment Research (National and International) TNAU CTCRI ISBC Member Cooperatives Merchant Associations Producers Associations (Local and SagoServe) Two primary products are produced on an industrial scale; starch and sago. Product value chains are not individually distinguished as actors in each value chain function in parallel, resulting from the unique trait that most processors have the capacity to produce both products; sago being a secondary product from the initial production of starch. The Industrial Cassava Value Chain Annual cassava yield and production area 1996-2013 (Erode, Dharmapuri, Namakkal, Viluppuram, and Salem Districts) 20 30 40 50 60 70 80 90 100 110 120 1000 1500 2000 2500 3000 3500 4000 4500 5000 1996 1998 2000 2002 2004 2006 2008 2010 2012 Production Area (Ha x 1000) Production Yield (Tonnes x 1000) Production Yield Production Area Data source: SagoServe 2016 and Sivakumar 2016 Cassava tuber price and annual cassava production area 1996–2013 (Erode, Dharmapuri, Namakkal, Viluppuram, and Salem Districts) 0 200 400 600 800 1000 1200 40 50 60 70 80 90 100 110 120 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Cassava Tuber Price (INR/quintal) Cassava Production Area (ha x 1000) Production Area Cassava Tuber Price Data source: TNAU Season and Crop Report 2016 Virtually every actor interviewed affiliated with the industrial cassava value chain stated that the primary constraint for them asan actor and for the industrial cassava market as a whole are dramatic price fluctuations. Both farmers and industrial producers state that the extent of volatility creates a speculative market. Cassava Production and Price 0 100 200 300 400 500 600 700 800 900 1000 1982 1995 2006 2016 2020 (Projected) Number of Industrial Cassava Producers Number of industrial cassava producers in the Salem production hub . Data source: SagoServe 2016 and Sivakumar 2016 • Growth has occurred in a select portion of the industry. • Starch demand has been significantly reduced due to substitution. • Few industries have emerged as large-scale starch producers, capitalizing on economies of scale. • Sago presents an opportunity to achieve greater value addition than starch, making it a more attractive for smaller processing units. • Demand dynamics and industrial upscaling have clear impact on the number of processing units. Market Composure Shift Year Number Industrial Producers 1982 168 1995 1000 2006 800 2016 308 2020 200
Transcript of Market constraints and opportunities for cassava in Tamil ... · Two primary products are produced...
Cassava (Manihot esculenta Crantz), renowned as a highly productive tropical tuber crop, known to support ruralcommunities for its tolerant production capacity, high caloric value and vast industrial application uses, supports over10,000 smallholder farmers in the South Indian State of Tamil Nadu.
To support objectives for improving food security and rural development, this research has been conducted to assessthe value chains associated with Tamil Nadu cassava production. The analysis has been used to better understand therelationship between the value chain actors and market system. The goal of the project was to determine theopportunities and constraints for the Tamil Nadu cassava market, centering around the Salem production hub,including the Districts of Erode, Dharmapuri, Namakkal, Viluppuram, and Salem.
Investigating the function of the cassava market system serves to better understand the relationship between themarket and farm level production. This information aims to provide leverage points to determine where interventionmay have the greatest impact to support market growth and community livelihood lying at the base of the valuechain.
Introduction
• Two field surveys in Tamil Nadu utilizing purposivesampling to conduct interviews and group discussions.
• Quantitative and qualitative data were collected fromactors and key informants along the industrial cassavavalue chain.
• Key informants included: farmers, industrial producers,producer associations, brokers, traders, cooperativeorganizations, extension service providers, andgovernment agency representatives.
Methods
Market constraints and opportunities for cassava in Tamil Nadu, IndiaRiley Linder1, Alessandra Giuliani1, and KR Ashok2
Bern University of Applied Sciences, School of Agricultural, Forest, and Food Sciences1
Tamil Nadu Agricultural University2
Contact: [email protected]
Acknowledgements
• Cassava production contributing to industrial markets supports an extensive portion of the rural community.
• Well developed production practices and tolerance of cassava serve to overcome water and soil constraints.
• Cassava as a base ingredient has the opportunity to support a vast array of markets with continual growth.
• Abundant opportunities exist for new product and marketing method innovations.
Opportunities
Potential markets for industrial cassava products and byproducts are extensive
Innovation of production methods, products, and marketing methods
Extensive community livelihood support
Well established logistics and production network
Cassava productivity world record level
Innovation of market mechanics and regulation
• Continual industry transition is occurring amidst pressure in an unregulated and highly fluctuating marketplace.
• Price fluctuation results from supply/demand behavior, lack of regulation, and governance structures.
• Price instabilities have been detrimental to starch demand; reducing growth, causing a producer shift towards sago.
• This production shift has increased competition, reduced small-scale production units, and provoked adverseproduction strategies, including potentially irresponsible modernization and product adulteration.
Constraints
Production modification including chemical adulteration
Reduced consumer demand, increased supply
Drastic price fluctuations
Reduced product demand
Market structure shifts, increased competition
Decreased farm level production
Unregulated marketplace
Gratitude is kindly extended to those at the Bern University of Applied Sciences, Tamil Nadu Agricultural University, Swiss Agency for Development and Cooperation, Agrinatura, Tropentag, and the people of Tamil Nadu who have generously supported this work and presentation.
Quality Regulatory Environment
Sago produced with chemicals (left) vs organically produced sago (right)
Some industrial producers seek to increase profits through the use ofchemicals during cassava processing. Practices include:
• Chemical whitening of starch and sago, aiming to improve product yieldand increase whiteness parameter directly connected to market value.
• Chemical use to remove impurities such as sand and enzymes serving toincrease starch recovery during processing.
Although the Food Safety Board prohibits these practices, producers have aclear divide on the use of chemicals. This divide inhibits collaboration alongthe value chain.
The Hindu 2012
The results of this research illustrate a market characterized by significant constraints, which must be addressed priorto addressing supply side, production innovations when considering how to develop livelihood opportunities for therural communities producing cassava. Market function and demand for cassava based products must be developedand structured in a way that farmers have a considerable desire to function in this marketplace.
Conclusion and Recommendations
Socioeconomic market knowledge is crucial to create a platform for further innovationsuch as the development of improved or CMD resistant varieties. Key recommendationsresulting from this research include; establishing industrial production standards,further development of industrial quality and safety standards, and the introduction ofimproved marketing methods. Systems to reduce price fluctuations must be introduced,with further exploration of government market regulatory action. Essential to theserecommendations is a collaborative effort towards innovation along the value chain, asgrowth needs to be pursued collectively to ensure inclusive sustainable marketfunction. These solutions serve to benefit the continual production of an essential cropsupporting the smallholder community of Tamil Nadu.
Small-Scale Farmer
Farm Level Broker
Small-Medium Scale Producer
SagoServePrimary
WholesalerSecondary Wholesaler
Retail Market
Industry Level Broker
Trader/Merchant
WholesalerLarge-Scale Producer
Extension ServicesKVK
TNAUCTCRI
Industry
Business ServicesStorage
Market TransactionsSagoServe
Rules and RegulationsTamil Nadu Gov. & Regulatory Agencies
Food Safety Board Environmental Safety Board
Electrical Board
Support Activities
Enabling Environment
Research (National and International)TNAUCTCRIISBC
Member CooperativesMerchant AssociationsProducers Associations(Local and SagoServe)
Two primary products are produced on an industrial scale; starch and sago. Product value chains are not individuallydistinguished as actors in each value chain function in parallel, resulting from the unique trait that most processorshave the capacity to produce both products; sago being a secondary product from the initial production of starch.
The Industrial Cassava Value ChainAnnual cassava yield and production area 1996-2013
(Erode, Dharmapuri, Namakkal, Viluppuram, and Salem Districts)
20
30
40
50
60
70
80
90
100
110
120
1000
1500
2000
2500
3000
3500
4000
4500
5000
1996 1998 2000 2002 2004 2006 2008 2010 2012
Pro
du
ctio
n A
rea
(Ha
x 1
00
0)
Pro
du
ctio
n Y
ield
(To
nn
es x
10
00
)
Production Yield Production Area
Data source: SagoServe 2016 and Sivakumar 2016
Cassava tuber price and annual cassava production area 1996–2013 (Erode, Dharmapuri, Namakkal, Viluppuram, and Salem Districts)
0
200
400
600
800
1000
1200
40
50
60
70
80
90
100
110
120
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Cas
sava
Tu
ber
Pri
ce (
INR
/qu
inta
l)
Cas
sava
Pro
du
ctio
n A
rea
(ha
x 1
00
0)
Production Area Cassava Tuber Price
Data source: TNAU Season and Crop Report 2016
Virtually every actor interviewed affiliated with the industrial cassava value chain stated that the primary constraintfor them as an actor and for the industrial cassava market as a whole are dramatic price fluctuations. Both farmersand industrial producers state that the extent of volatility creates a speculative market.
Cassava Production and Price
0
100
200
300
400
500
600
700
800
900
1000
1982 1995 2006 2016 2020(Projected)
Nu
mb
er o
f In
du
stri
al C
assa
va P
rod
uce
rs
Number of industrial cassava producers in the Salem production hub.
Data source: SagoServe 2016 and Sivakumar 2016
• Growth has occurred in a selectportion of the industry.
• Starch demand has been significantlyreduced due to substitution.
• Few industries have emerged aslarge-scale starch producers,capitalizing on economies of scale.
• Sago presents an opportunity toachieve greater value addition thanstarch, making it a more attractive forsmaller processing units.
• Demand dynamics and industrialupscaling have clear impact on thenumber of processing units.
Market Composure Shift
Year
Number
Industrial
Producers
1982 168
1995 1000
2006 800
2016 308
2020 200
