The Economics of Smallholder Maize Production in Zimbabwe ...
Marketing of Aflasafe Maize by Smallholder Farmers
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Transcript of Marketing of Aflasafe Maize by Smallholder Farmers
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www.iita.org A member of CGIAR consortium
Marketing of Aflasafe Maize by
Smallholder Farmers
Debo Akande,IITA
And the Aflasafe Team
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www.iita.org A member of CGIAR consortium
What is marketing
The management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P’s of marketing:
(1) identification, selection and development of a product,
(2) determination of its price,
(3) selection of a distribution channel to reach the customer’s place, and
(4) development and implementation of a promotional strategy
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www.iita.org A member of CGIAR consortium
Process in marketing Market Analysis: - the size of the market for the product,
barriers to entry for farming group, and requirements for supplying product to market (i.e. quality of product, labelling, packaging, etc.)
Product : How much is going to be produced? What standard of quality? Consumer knowledge, Value addition
Operations: the production of the crop, the processing facility (including labour requirements), storage and transport. What are the risks, plans to mitigate the risk.
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www.iita.org A member of CGIAR consortium
Process in marketing cntd
Organisation management and ownership: Who will manage the organization? What will the structure look like? How can members hold managers/leaders accountable?
Funds: What will they be used for? Where will they come from? How will they be repaid?
Financial plan: What are the net income projections ? How does this projection change when certain prices change? What is the break-even point for farmers producing the crop?
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www.iita.org A member of CGIAR consortium
Market strategy Which way to go?
•Aggregation?
•Direct Sales? Open market
•Contract Farming ? what would a contract conceivably look like - quantity, quality, duration?
•Agro Processing? Cooperation among smallholder farmers to turn primary agricultural products into other commodities for market .
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www.iita.org A member of CGIAR consortium
Markets for Aflasafe
DOREO PARTNERS
Poultry industry
Export-oriented aggregators
Food processors
Large commercial farmers
Smallholder farmers
Market based
• Poultry feed
• Premium food market
AgResults (Incentive-cum-market based)
mar
ket
de
man
d f
or
Afl
asaf
e • 60% maize consumed by farmers • 40% sold in the market
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Maize & Poultry Growth
• Nigerian maize production has grown from 4 million metric tons in 2000 to a 7.3 million metric tons in 2010
• Nigerian poultry production has grown from 113 Million birds in 2000 to 192 million birds in 2010
• Each sector has grown on average 5% per year.
• Poultry feed is approximately 60% maize.
• Annual demand for maize: 1 million tons
Nigerian Govt Bans Poultry Imports
Index of growth in production for maize and poultry relative to Nigeria’s production in 1961* Measure: Relative growth in production
Poultry Industry… Key Driver of Domestic Maize Production
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Aflatoxin and Broilers
AF-free
diet
500 ppb AF diet
Aflatoxin impacts • Significant increased mortality
• Reduced immunity
• Reduced vaccine efficiency
• Dramatic reduction in live weight / Feed
efficiency
• Drop in egg production rate
Aflatoxin levels in feeds in Nigeria
Aflatoxin level (ppb) Samples (%)
<20 (safe) 38
>20 to 100 (up to 5x) 14
>100 to 500 (up to 25x) 41
>500 to 1,000 (up to 100x) 7
Poultry industry’s current cost (per ton feed*) for toxin binders:
Tier 1: $3 Tier 2: $6
Tier 3: $13 * 600 kg maize per ton feed
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Poultry Feeding Study
$3,200 net
profit from
10,000 birds
in 8 weeks
www.iita.org Mycored Europe, 28 May, 2013 DOREO PARTNERS A member of CGIAR consortium
Aflasafe maize feed Toxic maize feed
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Innovation Platform
• Platform meeting with leadership and members of Poultry Association of Nigeria, feed manufacturers, maize aggregators, aflasafe farmers, vet professionals and regulators
• Results of poultry feeding study presented
• Poultry farmers to buy all aflasafe maize at a premium
www.iita.org A member of CGIAR consortium
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www.iita.org A member of CGIAR consortium
Key Economic Drivers
• Ex-factory price: $12.2 including 28% EBITDA
• Farm Gate price: $15.6
• Maize yield required for farmers to recover aflasafe cost + 33% profit: 3.5 t/ha
• Yield enhancement to go hand in with aflasafe use
DOREO PARTNERS
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Actions to Create Demand
• Develop manufacturing capacity
• Create awareness about aflatoxin
• Engage stakeholders frequently
• Demonstrate efficacy of Aflasafe
• Train farmers in aflatoxin management
• Enable aflatoxin testing of products
• Incentivize use of Aflasafe by the poor
• Link Aflasafe users to food and feed market
• Being piloted by Doreo Partners
www.iita.org DOREO PARTNERS A member of CGIAR consortium
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Babban Gona Pilot
www.iita.org DOREO PARTNERS A member of CGIAR consortium
• Farmers’ cooperative with professional management
• Credit, inputs and technical services
• Yield enhancing practices
• Aflasafe use
• Aflatoxin testing – 100% met standard
• Incentive for meeting aflatoxin standard
• Warehousing
• Output marketing – linking to market
• Return profit after sale ($140/ha)
• Farmers keep part of the harvest for family use
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www.iita.org A member of CGIAR consortium
Thank You
Thank u