Cassava Master Plan

NIGERIA

Cassava Master Plan

A STRATEGIIC ACTION PLAN S TEG ACT O PLAN FOR THE DEVELOPMENT OF F O TH EVE PM T F THE NIGERIIAN CASSAVA ENG R N S AVA INDUSTRY ND T
PREPARED WITHIN THE FRAMEWORK OF THE NIGERIA COUNTRY SERVICE FRAMEWORK AND IN COOPERATION WITH THE PRESIDENTIAL INITIATIVE ON CASSAVA March, 2006

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

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CONTENTS PAGE Glossary and Acronyms
1. 2. 3. 4.
Executive summary The World Cassava Outlook The Nigerian Cassava Production System A SWOT Analysis of the Nigerian Cassava Industry
8 12 30
55
5. 6.
Benchmarking of the Nigerian Cassava System 64 Course of Action Developing The Nigerian Cassava Industry 73 Roadmap Boxes Bibliography 79 85 92 95
7. 8. 9.
10. Annex

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Executive Summary Outline of the Master Plan Chapter 1: The World Cassava Outlook
1.1. The Value Chain Approach 1.2. Dynamic Changes in the Global Cassava Value Chain 1.3. Outlook of Cassava Products in the Global Market
1.3.1 Global Production and Trade
1.3.1.1. Global Production 1.3.1.2. Global Trade in Cassava 1.3.1.3. International Prices for Cassava Products
10
12 12 15 18
18
18 19 21
1.4. The Global Market Trend

1.4.1 1.4.2. Predictions and Demands in the Present Decade for the Cassava Sector Cassava Imports
21
22 25
1.5. Processing Technologies
26
Chapter 2: The Nigerian Cassava Production System

2.1. The Nigerian Cassava Belt-Potential 2.2. The Concept of a System Approach 2.3. Vision - Strategies
2.3.1 2.3.2. 2.3.3. 2.4.1. 2.4.2. 2.4.3. 2.4.4. Policies Inputs Institutional Infrastructure Primary Products from Cassava Secondary Products from Cassava Cassava By-Products The Cassava Flour Industry
2.3.2.1. Inputs and Resources
29 30 31 33
33 35
35
38
2.4. The Nigerian Cassava Industry
42
43 43 44 45
45 46 46 47 49
2.4.4.1. High Quality Cassava Flour (HQCF) 2.4.4.2. The Ethanol Industry 2.4.4.3. Starch 2.4.4.4. Animal Feed/Chips/Pellets 2.4.4.5. Staple Foods (Gari, etc)
2.5. The Nigerian Cassava Industry in the World Context

2.5.1. 2.5.2. World Market Regional Market
50
50 53
2.6. Economic Outputs
54
Chapter 3: A SWOT Analysis of the Nigerian Cassava Industry

3.1. Analyzing the Cassava Industry as a Problem Tree 3.2. The SWOT Analysis (Within the Value Chain)
3.2.1. Strengths
56 56 58
58

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3.2.2. 3.2.3. 3.2.4. 3.3.1. 3.3.2. 3.3.3. 3.3.4. 3.3.5.
Weaknesses Opportunities Threats A A A A A SWOT SWOT SWOT SWOT SWOT Analysis Analysis Analysis Analysis Analysis of of of of of High Quality Cassava Flour Cassava Starch Ethanol Cassava Food Products Cassava Based Animal Feeds
58 59 60
3.3. SWOT Analysis for the Production of Specific Cassava Products
62
62 62 63 64 64
Chapter 4: Benchmarking the Nigeria Cassava

4.1. What is Benchmarking
System
66 66
4.2. Benchmarking of the Nigerian Cassava Chain Against Competing Countries 66

4.2.1. 4.2.2 4.2.3. Brazil Thailand Lessons Learned from Benchmarking Exercise 67 70 72
Chapter 5: Course of Action - Developing the Nigerian Cassava Industry

75 5.1. Actions
5.1.1 5.1.2. 5.1.3. 5.1.4. 5.1.5. 5.16. Policies Infrastructure Promote Vertical Integration and Cluster Development Investment Promotion Promotion of Research Market Development
77
77 77 77
80
5.1.3.1. Clusters Disputes Settlement Business Associations
80 80 80
Chapter 6: ROAD MAP

6.1. Proposed industrial development by Region
81 89
6.2. The Strategic Development of each Cassava Sub Sector in the Short, Middle and Long Terms 90
6.2.1. 6.2.2. 6.2.3. 6.2.4. Ethanol Starch Traditional Food and HQCF Pellets/Chips 90 91 91 92
6.3. Mechanisms for Coordination and Implementation 6.4. The Way Forward BIBLIOGRAPHY
92 93 94
ANNEX:
Indicative Investment Budgets for Cassava Processing Plants

98

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Graphical Representations
Tables
1.1 1.2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 3.1 3.2 3.3 3.4 3.5 4.2 6.1 6.2 Global Trends along the Cassava Value Chain World Cassava Trade up to 2004 Cassava Production Area and Yield by States in Nigeria Main Actors along the Nigerian Cassava Value Chain Summary of Status and Costs Research Institutes and Universities Finance Institutions International Organisations Private Association Ministry of Agriculture and Universities Regulatory Agencies Nigerian Cassava Food Products Potential Market for Cassava-derived Products in Nigeria Expected Fresh Roots demands and Processing plants to be Established High Quality Cassava Flour SWOT Analysis Cassava Starch SWOT Analysis Ethanol SWOT Analysis Cassava Food Products SWOT Analysis Animal Feed SWOT Analysis Comparison of Parameters used for Benchmarking Exercise Foreseen Responsibilities of the Various Stakeholders in the Implementation of the Cassava Sector Intervention Regional Sub-sector Cassava Development
Figures
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Regional Consumption of Cassava 1961 and 1995 (Tonnes) : FAO Percentage Cassava Utilization in Africa, Asia, Latin America Global Cassava Production Export Price Trends for Hard Cassava Pellets (Bangkok) Relationship between Corn Prices and Starch Imports Percentage Global Ethanol Utilized as Fuel Percentage Ethanol Utilized for Fuel by Region Trends in Global Cassava Imports Relative Production of Cassava per region (in percentages of total production Production Scenarios for Cassava to 2020 Cassava Area 1980 to Targeted 2007 Cassava yield 1980 to Targeted 2007 Comparison with International Yields Relative Production of Cassava Nigeria Cassava Growing Belt Comparison of Domestic and World Market Prices for Cassava Chips, Cassava Starch and Maize
16.

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Diagrams
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Simplified Example of Cassava Value Chain Flow Chart - High Quality Cassava Flour Flow Chart Ethanol Flow Chart Process for Cassava Starch Production Flow Chart High Quality Cassava Chips Flow Chart Gari from Cassava Problem Tree Organisation of Thailands Cassava Sector Interdependence between Actors in the Development of the Cassava Sector Improving the Productivity and Competitiveness of the Nigerian Cassava Value Chain

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Glossary and Acronyms

EU FAO FGN HA HQCF IITA M&E MT N R&D SMEs SMEIs T T/Ha UNIDO US$ European Union Food and Agriculture Organization of the United Nations Federal Government of Nigeria Hectares High Quality Cassava Flour International Institute of Tropical Agriculture Machinery and Equipment Metric Tonnes Naira Research and Development Small and Medium Enterprises Small and Medium Scale Enterprises Investment Scheme Tonnes Tonnes per Hectare United Nations Industrial Development Organization US Dollar

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Executive Summary
Nigeria is the highest cassava producer in the world, producing a third more than Brazil and almost double the production capacity of Thailand and Indonesia. She currently produces about 38 million metric tones (MT) per annum; a figure expected to double by 2020. Although the world leader in cassava production, Nigeria is not an active participant in cassava trade in the international markets because most of her cassava is targeted at the domestic food market. Her production methods are primarily subsistence in nature and therefore unable to support industrial level demands. The Presidential Initiative on Cassava, which was launched in 2003 brought cassava and its potentials to the national limelight. The Initiative has as goal, the promotion of cassava as a viable foreign exchange earner for Nigeria, and also development of the cassava production system in order to sustain the national demand. The challenge however, is how Nigeria can earn US$5 billion from value added cassava exports by the year 2007. The vision for cassava is that it will spur rural industrial development, helping raise incomes for producers, processors and traders while contributing to the food security status of its producers and consumers, by a shift from cassava as principally a sustenance food to an industrial crop used in the processing of ethanol, starch, pellets, and high quality cassava flour for the export trade. To achieve this goal, Nigeria must adopt a demand-driven approach in promoting, developing and diversifying its cassavabased industries. To aid its achieving the set goals, the Ministry of Industry with the framework of the CSF in cooperation with the Ministry of Trade and Commerce commissioned UNIDO to assist in the development of a Cassava Blue Print. In developing the Master Plan, the opportunities and constraints cassava may face at each stage of the commodity development cycle (Value Chain Analysis) have been systemically identified and analyzed and important tools such as Business Development and Management, International Economic Cooperation and Scientific Support have been proposed. Furthermore, benchmarking the Nigerian cassava sector against competing cassava nations; Thailand and Brazil has provided an insight of outstanding practices adopted by these nations that Nigeria could adopt and adapt. In addition, SWOT Analysis has identified the internal and external factors that affect the cassava sector and these have been used in developing the strategies proposed for the short, medium and long terms. Following primary and secondary data, interviews, visits, brainstorming and interactive sessions used in the development of this document, an analysis of all available data shows that the primary challenge the cassava sector faces is low productivity due to Nigerias subsistence cassava farming culture. A rudimentary industry although large, it is underdeveloped, inefficient and uncompetitive in the global arena, a consequence of high ex-factory prices. Nonetheless, a critical analysis of the data supports the view that Nigeria has the potential to achieve its US$5 billion earnings target from cassava products, once it addresses the current major bottlenecks along the Value Chain. Her high cassava production levels mean that the implementation of equitable governmental policies, such as import substitution, 10% mandatory use of Ethanol as fuel, and 10% cassava flour substitution in bakery and confectionery, could see her earnings from reduced imports and industry savings surpass the projected government target.

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This Master Plan envisages a dual phased, market led and private sector driven developmental approach. In the First Phase is the development of a vibrant cassava industry, aimed at the domestic market and geared towards import substitution. Once a healthy local cassava industry has been established, in the Second Phase, Regional and Global export opportunities can then be aggressively pursued. A vibrant market will create the demand for raw material (cassava), spurring increased and improved production of tubers at the farm level. Ethanol, flour and pellets are identified as potential earners in the domestic market, while starch will be developed primarily for the export market. Encouraging joint venture partnerships in the cassava starch industry in order to facilitate international market access may fast track Nigeria into the global context for competition in the commodity. This Master Plan proposes the necessary government policies like interventions to improve productivity and competitiveness at the farm and processing levels, effective marketing in the domestic, regional and international arenas, financial investments, institutional support, sector wide linkages, and capacity building. It additionally provides the framework for the implementation of the Cassava Sector Development Action Plan in the immediate, medium (2-5 years) and long term (5-10 years). In the short term, investments will be needed in at least 100 small to medium scale plants while the long term domestic demand will require further private sector investments in nearly 500 plants, with associated investment costs estimated at over N10 billion. Finally, the Annex Section shows indicative Enterprise Analysis for investment in the processing of each cassava - based product in Nigeria.

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Outline of the Master Plan

This document consists of 5 parts and 6 chapters.
Part one
Chapter 1.
Cassava The World Context

This provides and examines the global trends in the global cassava sector.
Part two
Chapter 2.
The Present Situation of the Nigerian Cassava Sector

Examines the current status of the Nigerian cassava sector from Farm to Market. Examines the internal and external strengths, weaknesses, opportunities and threats of the cassava production system in Nigeria (SWOT Analysis).
Chapter 3.
Part Three
Chapter 4.
Cassava Industry- Brazil, Colombia and Thailand: a Comparative Study

Positions Nigerian Industry in the global market: Benchmarks the cassava industry against its main competitors, Thailand and Brazil.
Part Four
Chapter 5.
Action Plan for the Development of the Cassava Industry in Nigeria

Outlines the actions necessary to achieve the goal of developing the industrial potential of cassava in Nigeria. The Road Map provides in summary, the desired output, course of action, responsible party and timeframe for the successful development. Way forward-implementing the Road Map. Contain Indicative Business Plans for the industrial level production of various cassava products.
Chapter 6. Annexes.

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PART ONE: INTRODUCTORY SECTION
Cassava The World Context

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Chapter 1: The World Cassava Outlook

Cassava has been cultivated for centuries in the Americas, initially for human consumption and more recently cultivated for the production of dry chips (used as animal feed), ethanol and starch. With cassava viewed as a food security crop and therefore poorly commerci alized, the changes along the Cassava Value Chain have been minimal. However, since Thailand commercialized cassava production and processing of animal feed, Asia and Latin America h ave witnessed rapid changes in the value chain system. Other contributing factors include new government poli cies promoting the use of cassava based products, improvements in cassava processing technologies resulting in greater outputs and th e emergi ng importance of cassava as an effective industrial raw materi al for the starch, animal feed and ethanol industries.
1.1. The Value Chain Approach

This Master Plan has been developed using the Value Chain Approach, which can be defined as an organized system of exchange from production to consumption, aimed at increasing value and competitiveness. It is also an alliance of enterprises, working vertically to achieve greater market access. As firms the cassava industry must compete even in local markets with firms and industries across the globe, this document analyses the constraints and opportunities faced by the Nigerian Cassava Value Chain at each stage from the farm to the markets. Subsequently, specific inputs, policies and support systems critical to proper functioning at each stage, and essential for the development of a competitive cassava value chain in Nigeria, have been determined. Inputs include the raw materials, technologies, fi nancing, i nstitutional support and techni cal and administrative human resource. Policies include stage specific and overall governmental efforts in creating an enabl ing environment essenti al to proper functioning and success of the entire chain. Support systems i mprove and/or monitor quality and enable th e delivery of timely services. Some examples are agencies that conduct research, provide product certifi cati on and/or promote, generate and disseminate informati on. These institutions significantly contribute to th e overall performance of the target industry. Value Chains encompass the full range of activities and services required to bring a product and/or service from it s production/conception to its end use. These include the final markets into which a product or service is sold; local, national, regional or global. Actors in the value chain are driven by incentives namely, profit, prices, commissions or

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some other extrinsic factor. It is the incentive in the value chain that encourages private sector investments and oils the wheel of progress for any industry. For the success in global markets, Value Chains must move a product from production to the consumer more efficiently, with better quality and/or in a unique variation different to Value Chains in competing countries. The competitiveness of the Nigerian cassava industry therefore depends on its ability to develop, and to maintain an edge over market rivals. The Cassava V alue Chain, presented in Diagram 1 begins with the production of the cassava, the primary raw material. The processi ng component comprises various processi ng firms who develop a variety of industrial raw materi al products from the cassava. The market component i s either an end u ser of a fini shed product, or another processing firm, using the product as industrial raw material.
Niigeriian Ca ssava Master Pllan Nige rian Ca ssava Mas ter P a n N r n a s v s rP n

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Diagram 1:
A Simplified Example of the Casssava Value Chain

PROCESSING
SECONDARY PROCESSING MARKET Gari, Lafun, fufu
RAW MATERIAL
PRIMARY PROCESSING
Traditional African Food Processing

(Grating, Pressing, Sieving, Cooking)
Cassava Fresh roots
Flour Production (Chipping, Drying, Milling)
Bakery and confectionary baking
Bread, candies, cakes, ice cream
Chips production (Chipping, Drying) Crude Ethanol Production (Liquifaction, Saccharification, Fermentation, Distillation) Native Starch production (Filtering, Settling, Starch Washing, Drying, Milling)
Pellets Extrusion
Animal feed
Distilleries Final Distillation
Fuel ethanol other industry, Beverages, pharm industry
Processed Foods Bullions Textile industry Pharmaceuticals
Soups, sauces, sausages
Garment Pills, capsules and syrups Paper & wood Furniture
* All processes above include peeling and washing *Transport, handling, packaging,
quality, storage quality
Dextrin
Logistics transportation
Other modified Starches
**
Other industries

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1.2. Dynamic Changes in the Global Cassava Value Chain Global Trends in the Cassava Value Chain
Raw Material Production
Production Systems -Shift to commercial production of raw cassava tubers.
Processing
Technologies -Shift from traditional to industrial type processing.
Market
Diversified Consumer Demands -Emerging huge global market demand for diversified cassava based products e.g. ethanol, starch, flour (HQCF) and pellets. Market Development -Governmental policies on import substitution and the increased use of cassava based products in developing countries increasing domestic demand. -The Far East, especially China is emerging as a major world market for starch and pellets.
Productivity -Higher yields level.
at
farm
-Improved raw material quality. -Ex-farm competitiveness improving. -Increased use of inputs. Increased Mechanization.
Competitiveness -Processing enterprises becoming competitive through efficient production. -Large-scale state of the art technologies used especially in starch and ethanol production. -Emerging Subcontract production. -Small and Medium scale food and animal feed industry processors using more efficient technologies. Supply Capacity and Quality Specifications -Clusters of small-scale processors working to meet market demand volumes. - HACCP/GMP/ISO 22000 implementation at plant level.
Supply Volumes -Improved capacity to supply the high volumes required by industry. -Subcontract/cluster farmer production increase. on
Product Quality Specifications and Product Quantities Demanded -Consumer demand for high product standard. -Consumer demand for Quality and Safety Certification. -Products demanded in large volumes. Market Access -Cassava Products competing against other products (maize and sugarcane). So Cassava based products and ex-factory prices must be competitive.
-Plantation production on increase.
Table 1.1: Global trends along the Cassava Value Chain
Production The African cassava production is subsistence in nature - focused on producing enough to feed the family. It is labour intensive, using very little fertilizer or pesticide inputs. However, since the 1990s in Latin America there have been significant shifts toward input-sensitive and large-scale production in regions like Brazil. The Asian production that

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targets the animal feed and starch industries are also more commercial and characterized by large plantations, high levels of mechani zati on, and the use of inputs and irrigation. Private sector-led subcontract cassava production has al so evolved as processing industries strive to mai ntain sustainable continuous supply of raw material. This has further fueled cassava production and processing and the development of hi gh yielding disease resistant cassava varieti es, creating improved productivity and competiti veness at the farm level. For example, in 1999, to regain momentum in cassava research and development, cassava-producing countries in Latin America formed a consortium called CLAYUCA (Spanish acronym). The cassava value chain has also experienced a surge in Latin America and Asia, thanks to strong participati on and leadership by the private sector. Processing In spite of its economic weakness, Sub-Saharan Africa is now developing small-scal e, low cost cassava processing technologies that enable farmers produce high quality cassava-based staple foods. These technologies allow farmers add value to a perceived fami ne reserve crop by producing a higher quality product, allowing them expand sal es in their existing markets and the creation of new market opportunities. Conversely, in Asia and Latin America, the industry employ state of the art processing technologies for their industri al production of starch, ethanol, cassava flour and animal feed (cassava pell ets). These regions have also developed a viable subcontract processing market where large farms employ smaller firms normally at the farm gate level, to provide them with intermediary products like cassava chips. Utilization (Markets) Global consumption of cassava has changed since 1961. Its use as food is its dominant market in Afri ca and Asi a where its consumption has doubled and increased by 70% in these countries respectively. In Latin America where consumption is its second most i mportant market, the consumption rate has i ncreased by 50%.

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Figure 1. Regional consumption of Cassava 1961 and 1995( tonnes)-FAO, 1999.
More recently, the traditional use of cassava is changing from primarily human consumption to processing industriali zed products. In Asia, cassava is a diversifi ed fully commerci al crop. Here, its roots are converted into an array of products - human food from the roots, and starch, flour, ethanol and ani mal feed for industry. In Latin America and the Caribbean, traditional processing and markets have now been dominated by industri al processi ng. In Brazil for example, starch and ethanol production from cassava is on the increase. Europe, Latin America and Asia have seen the most cassava consumption increase using animal feed for their industries. Africa however continues to lag behind with 90% of its cassava still being consumed as human food.
Asia 1 2 3 4
Africa 1 2 1% 0% 3 4
10%
8%
32% 8%
50%
91%
Latin Am erica 1 2 3 4
Feed
1% 5% 43%
Export Other Food
51%
Figure 2. Percentage of Cassava Utilization in Africa, Asia and Latin America Domestic, regional an global industrial cassava trade is divided into 4 main sub sectors Ethanol, Starch, Flour and Chips/Pellets. The use of cassava as a raw material for Ethanol production, a more environmentally friendl y fuel, is expected to rise with the growing concerns on the future of fossil fuel s and their ensui ng environmental effects as stated in the 2000 Kyoto Agreement. Therefore member countries to the Kyoto agreement are either producing or using more ethanol or are providing incenti ves to their industrial ethanol production for its use as fuel.

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The world trade in pellets has long been dominated by Thailand, beginning around 1967, a few years after the start of its cassava exports to th e European Union (EU). Although Thailand lost her privil eged entry to the EU in the 90s, it still exports cassava chips and pell ets to other Asian countries, especially China, where pellets are used both for animal feed and for the producti on of ethanol. The production and trade in cassava starch has significantly increased in recent years. Cassava starch has product characteristics that are technically superior to those of corn (maize) starch and this sub-sector promises to be a viable new market segment for industrial cassava. Already, in order to meet the global starch demand, large companies speci alizing in the production of starch and modi fied starch have invested hugely in Thail and, Brazil and Indonesia. Cassava flour is widel y consumed in Brazil and in most of Latin America as farinha, wi th various levels of sophistication in its processing - from primitive famil y to large mechanized methods in factories. A potentiall y more dynamic market for cassava flour however is in its use as High Quality Cassava Flour (HQCF), a partial (10%) substitution for wheat in bakery products.
1.3. Outlook of Cassava Products in the Global Market

1.3.1 Global Production and Trade
1.3.1.1. Global Production Prospects for world cassava production are favourabl e and likely to remain around the 2003 record of 192 million tonnes (FAO, 2004). Preliminary crop estimates from some of the larger producing countries in Africa, the major producing region, point to satisfactory production l evels close to the 2003 level of 103 million tonnes. In Angola, the 2004 cassava output is forecast to rise 16% from last year followi ng good weather and increased farming land in the growing season. In the western parts of Zambia, flooding probl ems may have hindered cassava cultivation but overall production prospects remain satisfactory. The outlook is also generall y favourable in Tanzania where the Government announced plans to increase i ts cassava cultivation i n order to export more starch and flour. Ongoing Food and Agriculture Organisation (FAO) initiatives to distribute fast-growing and disease-resistant cuttings in Rwanda and in the Central African Republic are likely to soon result in increase in output. In Nigeria, a consortium of international agencies supports her commercial cassava programme to the tune of US$11 million. Si milarly, production in Ghana and Uganda is expected to rise, following large-scale investment in cassava infrastructure, parti cul arly at the processing level. This combination of governmental promotion of cassava cultivation and the

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backing of the internati onal organizations is spurring the expansi on of the cassava industry in Africa. In Asia especially Thailand and Indonesia, which last year accounted for much of the increase in global cassava output, production is expected to rise further largely due to hi gh domestic and export prices. The production outlook for Latin America and the Caribbean is also favourable thanks to good prospects in Brazil. Following a 50% increase in the cassava support pri ce, Brazils output was forecasted to increase 8% to 23.9 million tonnes in 2005.
U NID O
U NIT ED NA T IO N S IND U S T R IA L D E VE L O PM E N T O R G A N IZ AT IO N
U NID O
UN ITED N A TIO NS IND U S T R IA L D E VEL O PM E N T O R G A N IZ AT IO N
U NID O
P ro je c tio ns for C a s sa va P ro duc tio n in the Y e a r 2 0 2 0 sa tion Ye

1993 P ro d u c tio n 0 0 0 ,0 0 0 t P ro je c te d o u tp u t in 2 0 2 0 B a s e lin e 0 0 0 ,0 0 0 t Hig h g ro w th 0 0 0 ,0 0 0 t
SSA S E A s ia LA C To ta l
P ort H arc ou rt, 23-25 Ju n e 2003
8 8 .0 6 4 2 .3 5 3 0 .5 1 1 6 0 .9 2
1 6 8 .5 4 4 7 .9 5 4 2 .9 3 2 5 9 .4 2
1 8 4 .0 4 4 8 .3 0 5 0 .4 9 2 8 2 .8 3
4
S o u rc e : S c o tt,G .J . ,M.W . R o s e g ra n t, a n d C . R in g le r. R o o ts a n d tu b e rs fo r th e 2 1 s t C e n tu ry: T re n d s ,P ro je c tio n s , a n d p o lic y fo r D e ve lo p in g C o u n trie s . IF P R I F o o d , Ag ric u ltu re a n d th e E n viro m e n t D is c u s s io n P a p e r. A c o -p u b lic a tio n o f In te rn a tio n a l F o o d R e s e a rc h In s titu te (IF P R I) a n d C IP . W a s h in g to n , D .C . In p re s s . M pok o Bo ka n ga
Figure 3: Global Cassava Production.
1.3.1.2. Global Trade in Cassava Intern ational trade in aggregate dry cassava products (also called tapioca) is currently esti mated at 8.4 million metric tonnes (MT), with Thailand and Indonesia as the major cassava exporters, exporting mai nly cassava chips, cassava pellets, cassava starch, and flour. The amount of cassava products exported from Africa is negligible despite Nigeria being the largest cassava producer. Afri ca and Latin America export only on average 400,000T, with Nigeria hardly featuri ng in this global trade and its fi rst batch of cassava chips exported to China in 2005 was at a loss. Although Thailand is the worlds largest exporter of tapioca with 80% of the total world exports, it is only the third largest tapioca producer behind Nigeria and Brazil. It i s noteworthy that Thailands production has fallen slightly as many farmers switched to other kinds of crops. Cassava production on the other hand, has been increasing in the past 5 years.

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2001
2002
2003
(Million Tonnes)
World Exports Thailand Indonesia Others World Imports EU (15) China Indonesia Japan Korea. Rep. of Malaysia United States Others
6.1 5.8 0.1 0.2 6.1 2.6 2.6 0.1 0.4 0.2 0.1 0.1 0.4
4.7 4.4 0.1 0.2 4.7 1.5 2.1 0.1 0.3 0.1 0.1 0.1 0.4
5.9 5.6 0.1 0.2 5.9 2.0 2.5 0.3 0.3 0.1 0.1 0.0 0.5
Table 1.2: World Cassava Trade up to 2004

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1.3.1.3. International Prices for Cassava Products

food outlook
According to the graph above, prices for pellets exported to the EU in 2004 were 36% higher than in 2003, while chips to the Far East were 5% up. Prices of fl our and starch, al though down from the corresponding period last year, have risen by 10% in the past 6 months. Wi th an anti cipated slowdown in EU imports, the outlook for cassava prices in the remainder of the year, will largely hinge on the Far East, particularly China, maintaining large international purchases. The current forecast is that Chinas domestic grain store will decline; creating its increased imports of non-grain feed su ch as cassava.
1.4. The Global Market Trend

The international market for cassava products began to develop in the 1950s, with the export of by-products from the cassava flour milling industry by Thail and to the European Community (EC) market. Half a century later, EU was still the main destination, and Thail and the main distributor. In recent times however, new cassava market opportunities have developed, especially in Asia, with cassava products used as functional intermediate products, especially cassava starch. However, Thailand continues to be the principal cassava supplier, with over 80% market share. International trade in cassava is a rapidly growing industry. Trade volumes between 1995 and 2005 have increased by about 36%. A conservative projection of the cassava trade for the year 2015 at a 40% growth rate is 11.76 million MT.

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1.4.1
Predictions and Demands in the Present Decade for the Cassava Sector
Predictions on the global demand for cassava based products in the next decade are based on three key factors: 1) that cassava remains competitive with corn in Asia and Brazil as a source of raw material for processed products especially starch; 2) the possibility of policy developments in the EU opening up wider European markets for cassava based derivatives which will kick start production in Africa and 3) that cassava root yields grow at a rate that at least compensates for increases in real agricultural wages in producing countries, as well as any increases in the profitability of alternative crops. These issues are discussed below 1. Cost Competitiveness with Corn in Asia and Future Growth: The main East Asian consuming countries (Japan, Taiwan, South Korea and China) import corn from the world market for their domestic starch industries. China, which is one of the worlds leading producers of corn is expected to become a net importer of corn in the near future. Secondly, the Asian region lacks plentiful supply of carbohydrate raw materials and it is the only region to have a very well established supply of cassava dedicated mainly to industrial processing, supplied largely from South East Asia. While the special properties of cassava starch are recognized in demand countries of Asia, cassava starch is imported as a bulk commodity in competition with corn for starch processing. The future of cassava starch in Asia therefore depends critically on its ability to remain competitive with corn as a source of starch. This in turn, depends on the level of profitability of the crops that compete with cassava in the main cassava producing regions in Asia. Rubber in particular seems to pose a major threat to cassava area especially in Thailand. 2. The Role of Policy in creating Growth in the West: In the EU and the US, and to a lesser extent Brazil, it is the functional advantages of tuber starches that have given cassava and potato starches an elevated position in the modified starch market. However, the widespread availability of very cheap corn in the US makes it hard to imagine tuber starches ever securing more than a small but profitable niche. In Brazil, cassava starch has gained ground when root prices are low, but has lost market share when root prices are high. In the EU, potato starch has benefited from considerable institutional support. As a result, it has gained a loyal customer base among paper and food producers. However, the future of the EU potato starch regime hangs in the balance, because the EU is currently undertaking a wide-ranging reform of its agricultural policies. This could result in a significant decline in potato starch production and could open up the EU to greater imports of cassava starch. Finally, the EU has recently established the Everything But Arms (EBA) trade initiative that allows for duty free imports from 50 of the worlds poorest countries. It is In the process of negotiating a series of Economic Partnership Agreements (EPA) with former African, Caribbean and Pacific (ACP) countries. Important East and West African producers of cassava such as Ghana, Mozambique, Nigeria, Tanzania and Uganda as well as Asian countries like Cambodia are the beneficiaries of these new trade preferences. This raises the possibility that Nigeria could emerge as an important supplier of cassava starch to the EU. 3. Export Oriented Growth Potential For Cassava in Africa: Africa is the worlds leading producer of cassava roots. It is also the region that undertakes the least processing of cassava roots into starch. In Africa, cassava is an important food security crop for millions of people. However, cassava yields vary greatly between and within countries but are generally low and yields have remained stagnant over several years. Despite this careful analysis reveals that there are interesting opportunities for producing

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cassava starch in particular within Africa. However, because domestic markets for starch is small, it is likely that the main impetus to the growth of cassava starch production in Africa will be policy reform in the EU. However, for African cassava producing countries to stay in competition in the global market it must reduce its cassava production cost significantly to below the international benchmark cost of $35 per ton of output using a combination of mechanization, use of improved high yield varieties in commercial farms and low farm labor costs. This is the single most important challenge for cassava development in Africa and Nigeria in particular. Market and Product Demand: Three basic cassava based products are traded internationall y. These are cassava chips/pellets, starch, and ethanol. The world market and product demand are discussed below for each commodity. Pellets: Figure 4 below shows the devel opment of hard cassava pellet export price based on data from Bangkok. The price of cassava pellet fell by about 49% between 1990 and 1999 from US$141 to US$72 per MT. This price slump has been dramati c in the last decade. In 2000, cassava pellet prices fell as l ow as US$52 and rose slightly to US$62 in 2003. The 1990 to 2003 pri ces have fallen from a high of US$141 to US$62 per MT. China in the last year, due to its high demand, replaced the EU as the most important consumer of internationally traded cassava pellets. Presently, the use of cassava as animal feed - in the form of dried chi ps and pellets - is concentrated in Latin America, the Cari bbean, China and the EU. However, Chinas domestic grain decline could further stimulate the growth of non-grain feed imports such as cassava. The 2003 figures of 54.5 million tonnes usage were 4% higher than the previous year. This increase reflected developments in the EU, in China and other Asian countries, notabl y Viet Nam and Malaysia, where dwindling livestock feed grain supplies and the consequent price hike, fostered a substitute trade in cassava. In 2003, EU imports increased by 32% to around 2 million tonnes, reflecting the increased competitiveness of cassava feed products compared to domestically produced grai ns.
160 140 120 100 80 60 40 20 0

19 90 19 92 19 94 19 96 19 98 20 00 20 02
US$/M.T.

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Figure 4. Export Price Trends for Hard Cassava Pellets (Bangkok).
Starch: The world starch production is about 60 million tonnes and its consumption trend i s expected to be 70 million tonnes by 2007 (Vilpoux, 2005). The largest producer is United States with 25.2 million tonnes, the Asian countries at 19.8 million tonnes, Europe with 12.2 million tonnes, Latin America with 1.8 million and Brazil with 1.0 million tonnes respectively. The major raw materi als used in starch production are corn, 75%, sweet potato, 13% and lastly, cassava at 12%.
Figure 5- Relationship between Corn Prices and Starch Imports
The current statistics show that maize is still supplying as much as 75% of the global starch market, with cassava starch contributing about 12%. On the international market, cassava starch is able to compete against corn, wheat and potatoes starches. Cassava starch i s especially competitive outside the two main markets, US and EU (i.e. in South East Asia). The overall world demand for all starch products grows at an annual rate of 4%. It i s expected th at this significant growth in demand will continue in the next decade. A high level of protection characterizes the starch market, as many users protect their local starch industries. Tariffs on cassava starch in the main importer countries range from 0% in Canada, Malaysia, Indonesia and the United States to 480% in the Republic of Korea. In the mai n markets, starch is imported under preferential access conditions. Japan for instance, has established an overall 200,000 tonnes tariff quota on native starch from maize, potato and cassava, beginning with a 25% duty and reducing i t to 15% in 2000. Ethanol: World ethanol
1% 1 2% 1
14%
production
used
primarily
for
2%
beverage,
18%
6% 8
66%
F e In u l B v ra e u l d stria e e g
A ericas E m urope A sia O thers

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industrial and fuel, reached an estimated 32-35 billion liters in 2000.

Fig 6: % Global Ethanol utilized as Fuel Fig 7: % Ethanol utilized for fuel by Region
Ethanol as a clean fuel has been recognized for decades and has clear environmental benefits when blended with gasoline, but was rel egated to 2nd positi on behi nd the petroleum-based competition. The new product, E10, a blend of 10% ethanol and 90% gasoline, dilutes highly toxic compounds in gasoline, such as ben zene and toluene. A life-cycle analysis conducted in 1999 by the Argonne National Laboratory esti mated that each gallon of 10% ethanol blended wi th gasoline cuts greenhouse gas emissions by up to 19 percent%, wi th higher bl ends yielding greater benefits. To date, one of the most impressive renewable energy initiatives undertaken anywhere in the world is Brazil's ethanol programme. The country is the largest ethanol producer in the world, with a figure of 11.9 billion liters in 2001. (The US is second, producing an estimated 2.7 billion gallons in 2003, up 21% from the previous year usi ng mostly cornstarch (http://www.eesi.org/)). Small quantities of blended ethanol are currently used in other developing countries like South Africa, Ethiopia and Malawi. With the growing market for al cohol in Australia, Japan, China, India and other countries, and the recent volatility in the oil market, Brazilian alcohol production is li kely to be boosted in the immediacy. China has initiated a corn-to-ethanol project, with the intention of introducing ethanol-gasoline fuel bl ends. Current production in the province of Jilin alone is about 0.4 billion litres, and total production throughout China may reach 1.2 billion liters in 2005. The Government of Thailand has meanwhile introduced ethanol production based on cassava and cane mol asses, which it will also use for ethanol-gasoline blends. In Indi a, the Government is setting up pilot projects to study the use of such blends as transport fuel, wi th initial trial of a blend made using 5% ethanol, deri ved from sugar cane molasses. Demand for ethanol is growing. Nigeria, Ghana and Cote DIvoire respectivel y import more than 80, 8 and 8 Million liters per annum. The Nigerian Government is poised to start the implementati on of the E10 policy on ethanol in 2007, developing the ethanol production from cassava and sugar cane. Food: Global cassava production as food was estimated at 103 million tonnes in 2003, approximately 2 million tonnes more than in 2002. Increase in the population in Africa and Latin America, alongside improved processing, quality, packaging and food safety practices i s expected to spur increase in the demand for cassava as a food source.
1.4.2.
Cassava Imports
Global imports of cassava is dominated by Europe, China and South Korea accounting for more than 90% of total trade in dried cassava and China and Japan import two thirds of the globally traded cassava starch. In recent years, China has become the single most important market for cassava derivative imports in the world. Asia is indi sputabl y the world leader in cassava derivatives trade. In fact with respect to dried cassava, Asian regional flows make the most of global exchanges wi th the exception of Europe (which however i s

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getting small er). Competing openly for these import markets with giants like Thailand or emerging Vietnem seems very daring but feasible for Nigeria. Figure 12 indicates the trends in Cassava imports between the EU and Chi na.
Figure 8: Trends in Global Cassava Imports.
1.5. Processing Technologies

Development agencies in Afri ca have generated a range of low cost, crop and cassava processing technologies to meet the needs of smallscale farmers and entrepreneurs. With the support of the International Institute of Tropical Agriculture (IITA), cassava dryi ng processing technologies that enable farmers to produce hi gh quality flours from cassava have been developed. The cassava processi ng technology (namel y the grater), which was first introduced into Nigeria, is now being actively promoted in East and Southern Africa. Increased research in cassava processi ng technologies in Latin America, Asia and Africa is expected to significantl y improve the processing technologies currently available for small- scale processes while state of the art technologies exist for l arge-scale production of starch, ethanol, flour and pellets. However, several princi ples should guide the acquisition of cassava processing equipments for SME scale processing. Apart from efficiency due consideration shoul d be given to the technical details of machinery that are imported or sourced locally for cassava agribusiness enterpri ses. Machinery shoul d be sourced from reputable organizations from within and outside Nigeria with a history, it is also necessary to consider technical details like overall yi eld, water use efficiency, power consumption, labor requirements, degree of automation, price and size of the plant. For instance any plant sourced for starch, ethanol, of flour

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should be able to yield nothing l ess than 25% starch, 30% flour and 400 liters ethanol per ton of flour. Plants with low water use effici ency are preferred because this means less effluent to manage. Preferred power consumption should be low especially in terms of electricity, diesel or gas given th e limitations from public electricity supply in Nigeria and th e rising cost of energy. The less labor required the more the degree of automation. Therefore as a matter of policy (given the bourgeoning youth population that are predominantly unemployed) equipments that can employ more personnel should be preferred to that which employs less. Low cost equipment should be sourced and many su ch types of equipment also exist in Nigeria. Finally, the scale of the processi ng plant is important. Large scale mega pl ants are not recommended Instead preferred installed capaci ty of plants for the respective products should be less than 120 tons fresh root/day for starch plants, less than 8 ton per day dry product for cassava flour and less than 10,000liters per day for ethanol. Other wise it will become difficult to meet suppl y requirements within the production context for Nigerian commercial farmers (Ezedinma 2005).

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PART TWO: CHAPTERS TWO AND THREE
The Present Situation of the Nigerian Cassava Sector

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Chapter 2: The Nigerian Cassava Production System

The Nigerian cassava system, characterized by small-scale farmers/holdings cultivating less than 2 hectares of cassava (average of 0.5 ha), is subsistent in nature, primaril y cultivated for the traditional food market, is subsistence in nature and not oriented to the industrial market. Any surplus cassava is either processed on the farm, or sold to local processors. The average production figures per hectare in Nigeria were 10.5 MT/Ha in the early 1970s, 11.5 MT/Ha in the 1980s, 10.5 MT/Ha by the end of 1980s, and 11.5 MT/Ha in the 1990s and up to 17.3 MT/Ha in Ondo in 2004 (Table 2.1).
State
Benue Kogi Enugu Imo Cross River Kaduna Rivers Ondo Ogun Oyo Osun Akwa-Ibom Delta Ekiti Anambra Edo Niger Bayelsa Ebonyi Kwara Plateau Lagos Abia Nasarawa Taraba
Annual HA planted (x1000)

1 261.1 184 186.5 156.5 177.5 206 167.5 73.2 75.7 121 66 117.8 70 41.2 53 45 73.5 30 29 30 26.9 25.1 15.7 25 12
Annual MT produced (x1000)

2 3551 2605 2085 2052 1958 1835 1735 1267 1178 1019 915 893 811 651 627 545 535 459 435 425 345 300 265 248 111
Mean yield (MT/HA)

3 13.6 14.2 11.2 13.1 11 8.9 10.4 17.3 15.6 8.4 13.9 7.6 11.6 15.8 11.8 12.1 7.3 15.3 15 14.2 12.8 12 16.9 9.9 9.3
Rank
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Table 2.1: Cassava Production Area and Yield by States in Nigeria. Source: PCU Abuja 2002; ICP-IITA Ibadan, 2004
The FGN has commissioned various opportunities for the industrial development of cassava in Nigeria. Presently, the Federal Government of Nigeria supports the devel opment of cassava varieties that are

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resistant to the vi rulent Ugandan strain that currently threatens to devastate Nigerian production. The project coordinated by the International Institute of Tropi cal Agriculture (IITA), National Root Crops Research Institute (NRCRI), Root and Tuber Expansion Program (RTEP) and other stakeholders, led to the release of five new cassava varieties in September 2005 by the National Release Committee under the Federal Ministry of Agricul ture. These released varieties - 98/0505, TME 419, 97/2205, 98/0581, 98/0510 - with quality attributes like yields greater than 25 T/HA, dry matter greater than 30% and mosaic disease resi stant can satisfy the food, industrial and li vestock demands. The United States Agency for Intern ational Development (USAID) and the Shell Petroleum Development Corporation (SPDC) also support the Presidential Initiative under a Global Development Alliance.
2.1. The Nigerian Cassava Belt-Potential

IITAs data shows that the north central zone (Benue, Nasarawa, Plateau, Niger, Kogi, Taraba, and Kwara States) produces th e largest quantity (about 29%) of cassava in Nigeria (Figure 13), thanks to their longer sunshine months and a mono-modal rainfall pattern (better th an the southern States), making the north-central zone the best area to source cassava used for li vestock feed and to locate pilot plants for cassava chips or pellets. The southern area of Kaduna State and the northern parts of Oyo, Ekiti, Ondo, Enugu, Ebonyi, Edo, and Cross Rivers States are also conducive for cassava chips production(Azogu et al, 2005).
7% 29%
20%
South-east South-south South-w est Middle belt North 24%
20%
Figure 9: Relative Production of Cassava per region (in percentages of total production) Source: IITA

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Lake Chad Sokoto Katsina Jigawa Zamfara Kebbi Kano Borno Yobe
Gombe Kaduna Niger Adamawa Plateau

Ab uj a
Bauchi
Kwara
Nassarawa Oyo Ekiti Osun Ogun Ondo

Enug u
Taraba Kogi Benue
Cassava growing regions

Marginal Major
Anambra
Eb on
yi
ss R ive r
Lagos
Edo
Moderate
Delta
Riv
Im
A b ia
Cro
a Ib
A kw
Bay
elsa
er s
Cassava Growing regions Marginal Moderate
Population (Million) 26.29 27.73 34.27
Area (Sqkm) 100, 041 54, 568 754,852
Rainfall (mm) 500 - 1000 1500 - 2800 1000 - 1500
om
300
150
300 Km
Major
Figure 14: Nigerian Cassava Growing Belt -Source: IITA
2.2. The Concept of a System Approach

The Systems Approach exami nes the internal linkages, i.e. interactions between the industrial and social economic components of the system as well as those between the system and the extern al environment. It provi des an integrated view of the behaviour of the system and is useful in the formulation of polici es. A first step in any Systems Analysis is the identi fication of the major market actors that interact with each other in commercial transactions. Another step involves the identification and anal ysis of the institutions and organizations, role players and stakeholders in the development of the Nigerian cassava sector.

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Key players
1.Consumers of products fabricated using cassava based ingredients
Function
Final market -Determine market dynamics for the final product fabricated with cassava ingredients. -Determine product standards, pricing. -Create demand.
Current status
-Demand is currently being satisfied by imports.
2.Primary consumers are mainly textiles, Pharmaceuticals, plywood, paper, glue and adhesives, bakeries, petroleum and animal feed processing industries 3. Secondary cassava processors - (Industrial medium sized and large-scale processors) - Processors of ethanol, starch and flour and pellets. 4.Primary cassava processors, producing mainly chips, but also flour, crude ethanol, and starch from cassava roots 5. Farmers -Small scale and Mechanized farmers.
Provide direct Market for cassava ingredients -Create demand for cassava based products. -Establish market Quality. -Determine pricing. Primary market for intermediate cassava products (mainly chips) -Determine, quality, pricing and volume of intermediary products. Primary market for tubers -Determine quantity of tubers that can be processed daily and the price of tubers. Supply of raw material -Determine quality and quantity of cassava supplied to the industries. -Determine farm gate pricing.
-Some Industries exists. -Demand is being met by imports. -High product quality standards. -High volumes needed. -Few uncoordinated, inefficient and uncompetitive. -High volume demand of industrial raw material. -Low ability to supply market demand. -Numerous, scattered uncompetitive and inefficient. -Low supply capacities. -Small scale, labour intensive and subsistence in nature. -High production costs. -Low supply capacities. - Limited Commercial farmers
6. Input suppliers
Supply of seeds, fertilizers and pesticides. -Determine quality and yield at farm level.
-Low supply. -High prices.
7. Equipment suppliers
Fabrication and supply of farm and processing equipment. ---Determine affordability, efficiency and durability of equipment.
-Low efficiency. -Expensive when imported. -Lack of standardization. -Repair and maintenance problematic.
8.Professional associations
Contribute to innovations in the sector. Storage and distribution of intermediate and final product of inputs equipment etc. Create an enabling business environment.
-Low research output. -Low dissemination of research outputs. -Made expensive by poor infrastructure.
9. Distributors
10. Government
-Poor Infrastructure, (road, rail, water networks). -Poor provision of utilities. -Cost of utilities high. -Existing policies that favour cassava production not effectively implemented.
11. Finance institutions
Provide investment Credit
-Credit unaffordable. -Difficult to access credit.
Table 2.2: Main Actors Along the Nigerian Cassava Value Chain

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2.3. Vision - Strategies

The Cassava Expert Group Meeting organized by The African Agricultural Technology Foundation (AATF)/IITA, Nigeria in Nov 2005, developed gui ding visions and strategies for the industrialization of cassava in Nigeria, and Afri ca in general. These include: The promotion of a multi -sectoral development plan for cassava to provide increased food security, contribute to poverty eradi cati on and economi c growth in Africa; Exploit the great potential of cassava as a raw material for the production of a range of high value food, feed and industri al products; Develop a strategic framework for mobili zing resources and formulating policies that will sustai n the drive towards the development of various industries that will use cassava as raw material and stimulate export of high quality cassava products.
In summary, the vision behind the Nigerian Cassava Action Plan consists of building an efficient and competitive domesticregional-international market for industrial cassava products. This strategy will be driven by domestic demand on a short term, regional market on a medium term and international market on the long term. This may not be the case for all cassava products as simultaneous actions may take place by cassava investors and markets across levels. For example the starch industry could focus on the export market in the short run.
2.3.1
Policies
Concerned about its singular dependence on a mono product (oil) for its foreign exchange, since her independence in 1960 the Nigeri an Government has made several forays at policies for the development of its agricultural and business sector. Various government policies on agricultural development have been developed and more recently, geared towards the cassava sub-sector, in particular, the Presi denti al Initiative on Cassava launched in July 2003. The objective of the Cassava Initi ative is the expansion of production and use of cassava to sati sfy domestic demand and also as foreign exchange through its products export. Existing and new poli cies aimed at supporti ng investment and market in the cassava industry include: Policy on national strategic food reserve. The Food Reserve policy is aimed at ensuring food security, guaranteeing food and industrial raw materials and provi ding employment opportunities for the rural labor force. Gari, the most produced and traded cassava product, has recently been added to the list of products. This should stimulate the gari production industry, creating more cassava plantation, essential for the growth of the overall cassava i ndustry. Policy on Pioneer Status Investment Incentives: Compani es can obtain Pioneer Status in several ways: if

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they produce products decl ared pioneer products under the Industrial Development (Income Tax Relief) Act No. 22 of 1971 as amended in 1998; if the NIPC has declared it a deservi ng enterprise; of if the company locates in an economically disadvantaged area. The Pioneer Statu s provi des a fi ve-year tax holiday to qualified investors, with a two-year extension for those located in economically disadvantaged areas. These areas ar e defined in the Nigerian Investment Promoti on Councils (NIPC) guide to investment incentives in Nigeria (NIPC, Investors Guide to Nigeri a 1998). However, it must be noted that pioneer status i s not automatic and must be applied for and even with a pioneer status such companies must report taxes to the Federal Inland Revenue Service (FIRS) but the tax is not taken from the company.
Policies on Export Incentives for non oil sector: These include (a) a 10% tax concessi on for 5 years for industries exporting no less than 60% of their products, (b) retention of export proceeds in foreign currency, (c) Export Development Fund (EDF), that provides financi al assistance to private sector exporting companies, (d) Export Grant Fund Scheme (EEGF): provides cash inducement for exporters that have exported a mi nimum of N50,000 worth of semi manufactured products, (e) Duty Drawback/Suspensi on and Manufacture-in-Bond Scheme, (f) Export Adjustment Fund Scheme provides supplementary export subsidy to compensate exporters for the high cost of local production arising mainl y from infrastructure deficiencies, and other negative factors beyond the control of the exporter; (g) Nigeria Export/Import (NEXIM) Bank Foreign Exchange facilities and (h) Capital Assets Depreciation Allowance which is an annual allowance of 5% on plants and machinery to manufacturing exporters who export at least 50% of their annual turnover provided that the product has at least 40% local materials content or 35% value added. All these incenti ves are al so applicable to cassava-based industries (e.g. starch or ethanol) that produce for export purposes. Policy on the provision of credit loans for agriculture producers through speci alized banks like the NACRDB. Policy on mandatory substitution of 10% wheat flour with high quality cassava flour in the baking industry. This policy will ensure increased production of cassava flour. Policy on provision of gainful employment for the countrys population. The present government of Nigeria strongly supports a growth-oriented economy with the capacity to create jobs. Policy on blending of 10% Ethanol in fuel. The Nigerian government as part of its commitment to the 2000 Kyoto Agreement has decided to implement a policy of blending fuel with 10% Ethanol. Ethanols blended

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fuels will lower the emission of carbon dioxide in the earth atmosphere. The above listed government policies, are not exhaustive. For a comprehensive assessment of the Nigerian poli cy environment for private sector investment we strongly recommend the 254 paged document titled The Nigeri a Investors Roadmap and Enabling Environment Strategy prepared for the Government of Nigeria in 2002 under USAID funding.
2.3.2.
Inputs
The Cassava Value Chain is supported by various inputs/resources. These include pl anting material, land, finance and access to information. 2.3.2.1. Inputs and Resources Raw Materials. Because of the Research and Development (R&D) work by IITA and National Root Crop Research Institute (NRCRI) sci entists, Nigeria has the advantage of improved, high-yielding disease-resistant varieties. The challenge is to multiply these varieties and to make them available to farmers who supply the cassava processors. The average starch percentage for Nigerian cassava varieties is about 20%. The IITA varieties average around 25%. However, selected farmers in Brazil have the competitive advantage of varieties wi th 30% starch. To compete effectively, Nigerian research institutions should aim to develop higher starch varieties immedi ately. Another critical input is fertilizers. With subsidized fertilizers provided through the Agricultural Development Programmes (ADPs), its availability is limited and unpredictable. Private sector agents provide additional fertili zers at free market prices, but ar e unwilling to store large amounts, which they mi ght not sell, thanks to the uncertainty about the quantity of subsidized fertili zer that may become available. Human Resource Development (HRD) Labour force and training: Even though Nigeria has more than 45 Universities and a similar number of higher educational institutions (polytechnics, colleges of agriculture and education, etc) the content and depth of training in available such institutions are not considered adequate to transform current small scale orientation in cassava farming to the large scale production systems. There is a dearth of skilled manpower in the technical and managerial aspects of large-scale farming and post harvest processing. Physical Infrastructure the local, state and federal government supplies these. Their state of disrepair contributes to high transportation costs, making the cassava products uncompetitive. Additionally, poor informati on dissemination across value/supply chain prevents decision makers direct access to market partners, support institutions, price sources and technical information. Utility costs- Electric power supply is unreli able and inconsistent. Processing industri es pay high-energy costs

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through the use of expensively run generators. Furthermore, the constant switching from public power supply to generators damages equipment and lowers productivity. Legal - Under the present Land Use Act, it is easier for foreigners to lease land than the Nigerian investor. The processing industry must ensure a constant supply of raw materials. This can be achieved if plant owners can have or lease large tracts of land over relatively long term periods (10 15 years) for their mechanized large-scale farmi ng. The challenge wi th the Land Use Act is to delineate agri cul tural land as separate from other land uses as it has been done in other countri es; and to provide such agricultural land on a tradable basis backed wi th the legal capacity to represent its value in the market wi thout necessaril y depriving the original owners of their long standing usufruct rights similar in line with the recommendations of de Soto (2000). Finance - The majority of cassava farmers and processors live i n areas that are resource-poor, highly heterogeneou s and risk prone. Consequently, conventional financi al institutions are not inclined to provide loans to these without collateral. In order to support poor smallholder farmers, in 1989 the Federal Government introduced a policy to liberalize their access to credi t. The measures included the recapitalisation and consolidation of commercial banks as a matter of policy, the establi shment of micro finance institutions and community banks, and the reforms in the National Agricultural Credit and Rural Development Bank (NACRDB), and the Bank of Industry (BOI). Several other financial incentives and initiatives are also under consideration by the Central Bank of Nigeria. Investment Climate - The investment climate i n Nigeria i s gradually improving with the advent of political dispensati on. The success stori es from the communication industry, growing stock market, and the capitali zati on of Banks by CBN are positive indicators for investment. Specifi cally, the government programs on State Economic Empowerment and Development Strategies (SEEDs) and National Economic Empowerment and Development Strategy (NEEDs), and special programmes and commitment, have helped the investment culture of the country. The Cassava i ndustry sub-sectors have been the most promoted by the Presidency, NGOs, and development Agenci es in Nigeria and in SubSaharan Africa (NEPAD). The most pursued Nigeri an Government Initiative in the cassava sub-sector are the 10% inclusion of cassava flour in composite flours and 10% eth anol in the petroleum i ndustry. These polici es are positive but their i mplementation is unpredictable. With stable policies, the Ni gerian cassava industry has a future. However, there is the need to harmonize activities of the following special programs: o Special Program on Food Security (SPFS) -- The SPFS is a deliberate policy to stimulate the growth of the food sector and thereby facilitate the elimination of poverty, hunger and the host of vicious tendencies that persist in food insecure nations. It is viewed as

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paramount for the development of the food sector and as a means to usher social and economic development in Nigeria. The wide geographical spread of SPFS projects in Nigeria makes it a viable program for the growth of the cassava sub sector.
Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) This was established by the provisions of the Small and Medium Industries Development Agency (Establishment) Act of 2003. The Act empowers SMEDAN to demand and obtain relevant informati on and data availabl e in the small and medium industries sub-sector focused on the promoting and facilitati ng of development of small and medium scale enterprises. SMEDAN i s appropriately positioned to facilitate th e sustainabl e development of the emerging industrial users of cassava in Nigeria.
Resource
Raw material
Current Status
-Low yields. -Low volumes. -Poor quality.
Costs
-High farm gate prices.
Labor -Farm level -Industry level Infrastructure Utilities Investment climate Land
-Farm level -Unskilled and unavailable as youths move to towns. -Industry level Unskilled. -Poor. -Poor unreliable supply. -Expensive. -Unconducive. -Investment costs charges too high. and
-$55 /month.
-$70/Month. -High transportation and distribution costs. --Contributes 20-25% of total processing costs. Policies enacted not effectively implemented. -Land development for commercial agriculture is too expensive -Credit costs are high.
-Land Tenure not conducive to expanding the production of cassava. -Limited access to credit and financing.
Finance
Table 2.3:Summary of the Status and Costs of Resources required in the Development of the Cassava Sector

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2.3.3.
Institutional Infrastructure
The Nigerian Support Institutions needed for the devel opment of the cassava sector incl ude: Research and Development (R&D) Institutions Finance Institutions International organizations Regulatory Institutions Private Associations and NGOs Ministries Government and Parastatals Universities and Polytechnics
The role of each Institution is described below:
NATIONAL R&D INSTITUTIONS

Production Institutions National Root Crops Research Institute (NRCRI), Umudike. I A R & T, Ibadan. Sheda Science and Technology Complex (SHESTCO), Abuja.
ROLES
R & D into the development of high yielding, pest and disease resistant/tolerant genotypes; cassava process technology for chips, pellets and poultry feeds production. R & D on sustainable agricultural production. Research into production of zero-to-low cyanide cassava; production of genetically improved cassava; production of industrial starch and starch derivatives; fructose and glucose syrup and citric acid. Research and mass production of disease-free, pest resistant and high yielding cassava plant through micro-propagation techniques.
National Center for Genetic Resources and Biotechnology (NACGRAB), Ibadan. Industrial/ Equipment Institutions Federal Institute of Industrial Research (FIIRO). National Center for Agricultural Mechanization (NCAM), Ilorin. Project Development Agency (PRODA), Enugu. African Regional Center for Engineering Design and Manufacturing (ARCEDEM), Ibadan. Nigeria Machine Tools Limited (NMT), Osogbo. Scientific Equipment Development Institute (SEDI), Enugu.
R & D on development.
industrial
products,
equipment
design
and
R & D into machinery and equipment (M&E) fabrication (e.g. cassava lifter, tuber harvester, peeling tools, root washer, root grater, screw press, sifter, gari fryer, chipper, dryer, etc). R & D and design and fabrication of some M & E. Design, fabrication and commercial production and marketing of cassava-based M & E.
Design and fabrication of machine tools and components.
R & D and production of cassava-based M & E.

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R&D INSTITUTIONS (contd)..

Packaging & Storage Institutions Nigerian Stored Products Research Institute (NSPRI), Ilorin. Livestock Research Institute National Animal Production Research Institute (NAPRI), Shika, Zaria. Veterinary Research Institute, Vom, Jos. Raw Materials Institutions Raw Materials Research and Development Council (RMRDC), Abuja. Academic Institutions Universities and Polytechnics.
ROLES
R & D facilities for storing fresh cassava roots and cassava products.
R & D of cassava-based feeds for poultry, pigs, cattle, sheep and goats. R & D on livestock health (cattle, goat & sheep).
R & D on raw materials development including cassava .
Training, Research & Extension on Cassava with model villages. Table 2.4: Research Institutes & Universities.
FINANCE INSTITUTIONS
Development finance institutions Nigerian Agricultural Credit and Rural Development Bank (NACRDB). Community Banks. Banks of Industry. Nigerian Export Import Bank (NEXIM). SMEIS. Commercial Banks Commercial Banks (Union Bank, UBA, First Bank). Insurance company
ROLES
Provides loan credit with no collateral to rural farmers.
Provides loan to rural farmers. Enhance infrastructural facilities through loans. Import & Export promotion & financial support (loan, guarantee/insurance). Loan to SME investors.
Loans and/or insurance to investors with collateral. Loan, leasing but no physical cash. Table 2.5: Finance institutions.

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INTERNATIONAL ORGANISATIONS
International Institute of Tropical Agriculture (IITA), Ibadan.
ROLES
IITA is a CGIAR Center based in Nigeria with over thirty years of experience in research and technology development. It has the Africa mandate for Cassava development including research for development, with the aim of increasing agricultural productivity, through R & D development of high yielding, pest and disease resistant/tolerant genotypes and post harvest development including better cassava process technology for chips, foods, industrial, pellets and poultry feeds, process technology, cooperation in the fabrication of cassava chips/pellet, industrial starch, cassava bread and confectioneries, ethanol production, market development. Loan repayment to Federal Government and assisting the multiplication program (Roots and Tuber Expansion Program Board) on the improved cassava varieties released by IITA and NRCRI. Focuses on developmental projects to stimulate industrial growth, job creation, gender balance, stable governance and reduce restiveness. Focuses on developmental projects on sustainable agriculture, stable governance, job creation and food security. Focuses on developmental projects to stimulate industrial growth, job creation, gender balance, stable governance and reduce restiveness. Focuses on funding with the Federal Government and extension of the works on cassava. Focuses on industrial development through policy change, sustainable production and processing centers and capacity building. Focuses on agricultural development projects & food security. It also carries out surveys on production, processing and marketing. Focuses on the promotion of health, Nutrition and gender issues. Focuses on the promotion of educational, awareness, population and advocacy on health, Nutrition and gender issues. Table 2.6: International Organizations.
International Fund for Agricultural Development (IFAD). United States Agency for International Development (USAID). Department of International Development (DFID), UK. International Development Research Council (IDRC). Bernard Van Lur Foundation (BVLF). United Nations Industrial Development Organization (UNIDO). Food and Agriculture Organization (FAO). World Health Organization (WHO). United Nations Children Education Fund (UNICEF).

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PRIVATE ASSOCIATIONS and NGOs

Cassava Growers Association of Nigeria. Cassava Exporters Association of Nigeria. Cassava Processors Association of Nigeria. Cassava Equipment Fabricators Association.
ROLES
Promoting cassava through processing and marketing.
investments
in
production,
Promoting and exporting cassava-based products. Processing and promoting cassava processing. Promoting and fabricating cassava machinery and equipment.
PRIVATE ASSOCIATIONS (contd)..

Cassava Produce Promoters & Exporters Association of Nigeria (CASPPEANS). Nigerian Association of Small and Medium Enterprises (SMEs). Nigerian Association of Small Scale Industrialists (NASSI). Chambers of Commerce, industry, mines and agriculture. Manufacturing Association of Nigeria. Winrock International. Citizen International (CI) . New Nigeria Foundation (NNF), Lagos.
ROLES
Promoting cassava export trade.
Promotion of viable environment for the growth of SMEs.
Promotion of viable environment for the growth of SMEs. Trade group. Provide the umbrella body for all manufacturing companies including cassava-manufacturing industries. Consulting units working in Nigeria on various issues including cassava. An NGO involved in extension work on cassava. An NGO involved in the Cassava competitiveness project in Akwa Ibom to promote cluster development concept. Table 2.7: Private Associations and NGOs.
MINISTRIES, GOVERNMENT PROJECTS and PARASTATALS

Ministry of Agriculture (Federal, States, ADP). Root and Tuber Expansion Program (RTEP). Projects Coordinating Unit. Ministry of Commerce Nigerian Export Promotion Council (NEPC), Abuja. Nigerian Investment Promotion Council (NIPC), Abuja.
ROLES
Promote cassava cultivation and the supply of input materials e.g. fertilizers and planting materials. Mass production and extension on cassava improved varieties. It provides project coordinating services in the agricultural sector with a view to ensuring successful implementation. Coordinates the envisaged cassava export program Facilitates and promotes export of cassava-based products. Promotes investments cassava industry. (amongst other industries) in the

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Ministry of Industry Ministry of Environment Special projects by FGN National Directorate of Employment (NDE). National Poverty Alleviation Programme (NAPEP). Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). Special Program on Food Security (SPFS).
Regulates and supports industrial development Enforces EIA and ensure that Environmental standards are met
Tackles the problem of mass unemployment in the skilled and unskilled labour force. The NDE provides an opportunity to use existing institutions to influence cassava supply and demand. Focused on job creation & poverty eradication. Also like NDE, NAPEP can be used to create net gain in the cassava industry. Promoting and facilitating the development of small and medium scale enterprises. The SPFS is a deliberate policy to stimulate the growth of the food sector as a means of alleviating poverty, hunger and other needs in food insecure nations. Table 2.8: Ministries Government Projects and Parastatals.
REGULATORY AGENCIES
Standard Organization of Nigeria (SON). National Agency for Food and Drug Administration and Control (NAFDAC), Abuja. Phytosanitary Agency (Quarantine). Consumer Protection Council.
ROLES
Determines standards for cassava and cassava products (e.g. cassava flour, cassava bread, cassava starch, etc). Enforces compliance of standards for cassava-based products.
Ensures that biological products introduced into this and other countries do not introduce diseases or parasites into the country. Provides an avenue to hear consumer complaints about products, practices or processes that may result in loss, injury or damages for the consumer or simply impinge their rights. Ensures uniformity of standards, through the provisions of regulation on units of weight and measurement, packaging etc. Enforces compliance to environmental standards and laws Table 2.9: Regulatory Agencies.
The Weights and Measures Division. Federal Environmental Protection Agency
Institutional Coordination Mechanism

Presently there does not exist a coordinating body or mech anism for the Support Institutions that are directly linked to the development of the cassava sector. Considering a cassava coordinating body will strengthen the roles of the institutions, harmonize all activities at the public level, and coordinate experiences by the private sector. The FGN should encourage the establishment of this body. Following the successful exampl es of Thailand and Brazil, this body should be private sector led and be responsi ble for providing services to its members which i nclude the provision of market and technical informati on, convening of regular meetings and seminars, organization of trade fairs, the promoti on of capacity building, and the facilitation of investment opportunities.
2.4. The Nigerian Cassava Industry

Cassava in Nigeria is currently used for two main purposes: 90% as human food and only 5-10% as secondary industrial material (used

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mostly as animal feed). About 10% of Nigerias industrial demand consists of HQCF used in biscuits and confectioneries, dextrin pregell ed starch for adhesives, starch and hydrolysates for pharmaceutical s produces and as seasonings. 70% of cassava processed as human food is gari. Other common cassava products human foods are lafun and fufu/Akpu. Processed products can be cl assified into pri mary and secondary products. The former, e.g., gari, fufu, starch, chips, pellets are primary products whi ch are obtained di rectly from raw cassava roots, while the latter are obtained from the further processing of primary products (e.g. glucose syrup, dextrin, and adhesive are obtained from starch).
Primary Products from Cassava

Four primary industri al products from cassava stand out as important for Nigeria. These are (a) cassava flour, (b) crude ethanol, (c) native starch, and (d) animal feed/cassava chips and pellets and are discussed below. These products are commonl y traded and show the highest potenti al for growth in demand, and are associated with medium and large scale processing. The Enterprise Analysis for the development of processing plants for each of these sub-sectors i s presented in Annex I. In the domestic market, industrial cassava products compete with traditional cassava products, mainly gari. Furthermore, each of the main industrial products (cassava flour, chips for animal feed, chips for food grade ethanol, and cassava starch) faces competition from (a) identical imported products, and (b) substitute products th at are either being imported or locally grown. For domestic cassava flour the main competitive product is wheat flour. For cassava chips/pellets it is feed grains. For ethanol it i s ethanol from other sources, and for starch i t is corn/maize starch. Based on the enterprise analysis, the cost of raw materials (fresh cassava) in Nigeria for the various cassava products are indicated below: Flour Starch Pell ets Ethanol : : : : 65% 63% 58% 59%
Quite clearly, significantly lowering the cost of raw materials (exfactory price) woul d greatly reduce the cost of the final product, making them more competitive. One strategy to achieve thi s is the vertical integration of commercial farms to each processing plant. Thi s strategy is discussed extensively in a l ater secti on as one of the acti on plans for the development of the cassava industry in Nigeri a.
2.4.2.
Secondary Products from Cassava

Cassava can be processed into various secondary products, including modifi ed cassava starch, glucose syrup, extr a neutral alcohol, noodle, bakery and confectionery industries, meat and textile processing. It is also industrially processed as a raw material in the coating of pharmaceutical products,

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the manufacture of glues and adhesives and oil drilling starch. (EFDI-Techno Serve, 2005). Glucose syrup is a concentrated aqu eous soluti on of glucose maltose and other nutritive sacchari nes made from edible starch. Glucose or dextrose sugar is found naturally in sweet fruits such as grapes or honey. It is l ess sweet than sucrose (cane sugar) and is used in l arge quantities in fruits, liquors, crystallized fruits, bakery products, pharmaceuticals, and breweries. Noodles are a long thin extruded food product made from a mixture of flour, water, and eggs usually cooked in soup or boiling water (Sanni et al, 2004). At 12.5%, cassava starch/flour forms an integral part of the final product. Cassava based adhesives, like th e cereal starch adhesives, are of three main types: Liquid starch adhesives are supplied by the adhesives manufacturer in liquid form usuall y in plastic or lined metal drums, jerricans and bottles. Pre-gel starch adhesives are produced in dry fl akes and milled to specific particles sizes. They are packed in waterproof lined multi-wall paper bags/sacks and are very sui table for export. Dextrin based adhesives are delivered to consumers in liquid and dry forms depending on specification and requirement. The liquid dextrin adhesi ves are packed as the liquid starch adhesives, while the dry dextrin adhesives are packed as the milled pre-gel adhesives. Dry dextrin adhesives are very suitabl e for export as intermediate raw materi als used especially in Europe and America by the food and industrial companies.
(Insert Diagrams on the industrial uses of cassava starch and derivatives as sent by email) 2.4.3. Cassava By-Products
Cassava by-products are wi dely used in most tropical areas for feeding pigs, cattle, sh eep and poultry. Dried peel of cassava roots are fed to sheep and goats. Raw or boiled roots are mash ed with protein concentrates su ch as maize, sorghum, groundnut, oil palm kernel meal and mineral salts and used for livestock feedi ng. Cassava leaves and stems of the cassava pl ant are considered a waste product. However, analytical tests have shown that cassava leaves have a protein content equivalent to that of alfalfa (17-20%) [Azogu et al (2004); Tewe (2004)] and can be used at 100 percent substitution to replace al fa al fa as a protein rich source for animal feed.

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Cassava meal i s the powdered residue of the chips and roots after processing is done to extract edible starch. It is generally inferior i n quality to chips, pellets, and broken roots, has lower starch content and usuall y contains more sand. Its demand by the European Economic Community (EEC) has declined following a shift to the other cassava products. However, small-scale farmers who produce their own feedstuffs en sure its continued use by blending it with other ingredients. The above li st of cassava products i ndicates the large variety of intermediate and end products within the cassava industry.
2.4.4.
The Cassava Flour Industry

2.4.4.1. High Quality Cassava Flour (HQCF) Nigeria imports over one million tonnes of wheat annually. At 10% substitution of cassava flour in wheat flour and with the current national demand, 300,120,000 metric tonnes of HQCF (assuming the national demand for wheat flour i s 1.2 million tonnes), is requi red. IITA has confirmed that 30% of the total wheat can be replaced by cassava flour in bread making, and 100% cassava flour is currently bei ng used in pastries and confectioneries (Onabolu et al ). However, with poor regulation and standardization, some bakeries have complained about problems, including: Presence of impurities such as sand; Odour; Shorter product shelf life (e.g. biscuits); Brittl eness; Gradual change of colour (biscuits turning pale); Unreliable supply; Poor final product quality i n cases where the cassava flour had partially fermented.
The process of flour production is descri bed bel ow. Freshly Harvested Cassava Roots
Peeling Washing Grating Pressing (< 50 %( Moisture) Sieving Drying (35 65oC; 10-12% M.C)
Milling Sieving (Optional) Packaging

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Diagram 2: Process Flow Chart for High Quality Cassava Flour
Wi th other domestic uses for cassava flour in snacks, a more realisti c estimate for the annual demand of cassava flour i s therefore 250,000 300,000 MT, a figure impossible for small hol ders to supply.
2.4.4.2.
The Ethanol Industry
Most of the ethanol consumed in Nigeria is imported. Her current annual demand for the industrial, pharmaceutical and beverage i ndustries is estimated at 160 million liters, a figure however expected to rise exponentially to 900 million liters once the E10 policy on ethanol in fuel is fully implemented. Ethanol is produced by the fermentation of sugar related materials such as molasses and sugar juice, or starchy materials. Cassava stands as one of the richest fermentable substances for the production of crude alcohol/ethanol, with dry chips containing up to 80% of fermentabl e substances (starch and sugars). The process of cassava based ethanol production i s described below.
Diagram 3: Flow Chart showing the Production of Ethanol from Cassava Flour
2.4.4.3.
Starch
The Nigerian demand for starch is estimated at 230,000 tonnes per year. Out of the 5 modern large-scale cassava starch factories existing in Nigeria, only two are in operation .

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Cassava starch is an important domestic and industrial raw material used in the manufacture of vari ous products including food, adhesives, thi ckening agents, paper, and pharmaceuticals (IITA, 1990). It has many remarkable characteristics including high paste viscosity, high paste clarity and high freeze-thaw stability, which are advantageous to many industri es. To make cassava starch, its roots being highly perishable, with enzymatic processi ng accelerate their deterioration within 1-2 days, it needs to be processed almost immediately after harvest. The process flow chart is described below.
Cassava Roots
Peeling
Washing Grating/ Rasping Chipping Grinding Mixing with water Filtering (Screening) Settling Starch washing Settling or dewatering in a clean bag by pressing Drying Milling Cassava starch
Diagram 4: Process for Cassava Starch Production
2.4.4.4.
Animal Feed/Chips/Pellets
Cassava chips are dried irregular slices of roots, which vary in size but should not exceed 5cm in length (CIAT, 2004). The tuberous roots, either peeled or unpeeled, are cut up into chi ps (cossettes) and dried. Chips from peeled roots are used for human consumption and in animal feed industry and generally store better than flour (IITA, 1990). Chips are the most common form in which dried cassava roots are marketed and most exporting countries produce them. The standard method of processi ng chips consists of peeli ng, washing, chipping the cassava roots, and then sun drying the slices. The recovery rate of chips from roots i s 20-40% depending on the initial dry-matter content of the cassava roots and the final moisture of the chips. In Nigeria, cassava

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chips were processed into animal feed and some animal feed millers continued the practice until the late 90s when the price of cassava became too expensive vis--vis the price of maize. Presently, no major livestock feed mill uses cassava as a raw material, al though smaller mills and large farms that blend thei r own feed use cassava chips or meal when these are locally available at low prices. The livestock sector in Nigeria is rapidly expanding and a continued demand for animal feed i s predictable. In view of the relatively highincome elastici ty for meat products, it is likely that this trend will continue during the reminder of thi s decade. Processing cassava chips into cassava pellets will further reduce transport costs and enhance product quality. Current estimates put the industrial use of chips in Nigeria at 5% (Tewe, 2002). During a survey of livestock mills, Knipscheer et al (2004) found three main problems with the use of cassava chips as raw material: unreliable supply, fluctuations in quality, and uncompetitive prices. Freshly Harvested Cassava Roots
Peeling
Washing
Chipping
Drying (35 65oC; 10-12% M.C)
Milling (Optional)
Sieving (Optional) Packaging Diagram 5. Production of High Quality Cassava Chips
Cassava Pellets for Animal Feed. Substituting maize with cassava in animal feed have been made using linear programming, savi ng of up 10% in poultry feed costs and about 20% for pi g feed. With the Nigerian livestock industry currently using up to 1.2 metric tonnes of maize annually, substituting 10% of this figure with cassava would involve setting up of at least 200 cassava chi p making factories processing about 10 tonnes of cassava roots per day. Pellets can be made either from cassava chi ps or flour. An indigenous Nigeria company, B & T Ventures, Ibadan, in collaboration with the cassava project at IITA, has designed and created a pelleting machi ne that can produce three different types of cassava pellets: hard, soft, and floating.

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The hard pellets are used for feeding poultry, the soft ones for feeding ruminants, and the floating ones for feeding fish. However, the machinery is still undergoing R&D, as it is not as effi cient as imported pell eting machines. 2.4.4.5. Staple Foods (Gari, etc) In Nigeria, gari is the most consumed and traded of all food products made from cassava roots. It is a creamy-white, parti ally gelatinized, roasted, free flowing granul ar flour with a slightly fermented flavor and sour taste. It is consumed ei ther soaked in cold water or stirred in boiling water to make a stiff paste. Its wide consumption is attri buted to its relatively long shelf life and its easy preparation as a meal. (Oduro et. al., 2000). The process fl ow chart i s described below.
Process
Harvest cassava Peeling Washing Grating Fermentation Pressing polypropylene Sifting Garifying
Notes
Select fresh, mature cassava roots without rot. Peel by hand and remove woody tips. Wash in clean water to remove pieces of peel, sand etc. Use motorized cassava grater. Pack into baskets made from cane, bark or palm branches and leave for 48 hours at room temperature. The fermented paste is filled into Hessian or sacks and placed in a jerk press. Using a wooden sieve, separate fibrous materials to control the size of the particles Roast and stir constantly in a large, shallow cast-iron pan over a fire, with a piece of broken calabash (gourd) or a wooden paddle for 20-30 minutes, or with a rotary dryer (300kg/day). To room temperature. Sieve to obtain uniform granules size. Larger particles of gari that are separated on the sieve may be sold as a cheaper grade. In polythene bags. In a cool, dry place. Diagram 6: Process Flow Chart for Gari from Cassava
Cooling Sieving (optional) Packing Storing
Other Foods
Food
Fufu
Description
A fermented wet paste widely consumed in eastern and south-western Nigeria, and in other parts of West Africa such as Sierra Leone. It is ranked next to gari in importance. Lately the use of dried fufu flour has become popular (Sanni et al, 1998a). Apart from its ease of preparation, dried fufus advantages include longer shelf life, convenience of storage and its compact size. It is a fibrous flour made from fermented dried cassava roots (Sanni et al, 1998b).
Lafun/elubo

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Kpokpo gari It is a common food in the mid-western section of Nigerian. Its only difference from gari is that the grated fermented mash is not sieved before roasting. Abacha Abacha is eaten as a snack with nuts or eaten as a delicacy with a palm oil source and smoked fish or meat. It is also a ceremonial food served during indigenous festivals such as agricultural festivals, funerals and naming ceremonies. In Nigeria, this is a roasted granular product made from partly gelatinised cassava starch, (although the cassava crop itself is called tapioca in some places (Oyewole and Obieze, (1985); Sanni et al, 1997)), heat treated to a moist mash in shallow pans. Its shapes are irregular lumps called flakes, or perfectly round beads. It is consumed in many parts of West Africa, soaked or cooked in water with sugar and/or milk added. High labour processing steps make it quite expensive. *Note that in international trade statistics, the term tapioca is used for the aggregate dry cassava products.
Tapioca
Table 2.10: Nigerian Cassava Food Products.
2.5. The Nigerian Cassava Industry in the World Context

2.5.1. World Market
Philips et al (2004) had assessed the Nigeria Cassava industry in the world context in an earlier publication. In their view, global cassava production i s expected to rise with increasing demand for cassava based industri al products. In Nigeria alone, in order to actualize the Presi dents Initiative of US$5 billion a year by 2007, 150 million tonnes of cassava would be needed by the end of 2006.
Figure 10: Production Scenarios for Cassava to 2020

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With production being a function of area and yield, this target requires an expansion from 2 million hectares (ha) of land to 3 to 5 million ha and an average yield of 30 tonnes per ha. Research institutes such as International Food Policy Research Institute (IFPRI) and FAO suggest a more conservative target. Extrapolati ng from estimates of current cassava producti on in Africa (Scott, Rosegrant, and Ringler, 2000 and FAO, 2004), Nigerias production i s targeted at 40 million tonnes by 2005 and 60 million tonnes by 2020 (IITA, 2002). This target relates well to the mapping of a simple linear ti me trend on historical production levels (Phillips et al ., 2004). An alternative middle of the road production target was generated by mapping an exponential time trend to historical production levels. This one suggests an i ntermediate production target for 2007 of 60 million tonnes (a doubling from the 1990 production l evels) to 150 million tonnes in the year 2020. Implications of the middle road scenario of 60 million tonnes by 2007 on Area are illustrated in Figures 9-11. Meanwhile, applying a simple linear time trend to n ational cassava area illustrates an increase of 1 million ha or 4 million ha by the year 2007 (Phillips et al., 2004).
Figure 11: Cassava Area 1980 to Targeted 2007
Gi ven these two targets i n production and area, a signi ficant increase in national yields is required. Sixty million tonnes on 4 million ha would require an average yield of 15 tonnes per ha. Current yields in Nigeria have been stagnant at just over 10 tonnes per ha since the early 1990s (Phillips et al., 2004).

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16 15 14 13 MT/Ha 12 11 10 9 8 7 6
19 87 19 89 19 90 19 91 19 92 19 93 19 95 19 96 19 86 19 88 19 94 19 97 19 98 20 00 20 01 20 02 T2 00 3 T2 00 4 T2 00 5 T2 00 6 T2 00 7 19 99
Push Factors Governm ent Support New Varieties B etter Farm Practices Farmer Motivation
y = 0 .0 069 x 2 - 0.183 3x + 11 .9 32 R2 = 0.20 3
Pull Factors C onsumer Demand Industrial Demand Favorable Markets Positive Attitudes
Figure 12: Cassava Yields 1980 to Targeted 2007
This targeted yield, compared to international levels, places Nigeria close to international levels. At 15 tonnes per ha, Ni geria is on the same linear growth path as Thailand.
Figure 13: Comparison with International Yields

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2.5.2.
Regional Market
There are export opportunities for Nigerian cassava products (e.g. gari) from and to countries in the West African sub-region (such as Niger and Mali). In these cases, Nigerian cassava products will compete with cassava products from neighboring countries. (Ghana and Benin). Coastal West Afri can (Cote dIvoire, Ghana, Togo, Benin) countries are both competitors and the potential markets for Nigerian products. The determining factor is the price of the raw material. There are some indications that prices in Ghana are similar to those in Nigeria, while the prices of cassava products i n the Republi c of Benin are generally lower. The latter observation explains the periodi c presence of Beni n gari on the Lagos, Nigeria market. Gari prices fluctuate in all West African coastal countries, and not necessarily at the same time. Recent market surveys by the West Africa Trade Network (www.wa-agritrade.n et) and MISTOWA (www.mistowa.org) confirm that Nigeria cassava products do not yet enjoy a significant price advantage over those in competing West Africa countries. Nevertheless, a cross-border trade study (Ezedinma et al, 2005d) in Northern Nigeria showed a substantial cassava export to Niger (mostly gari, but also chips), especially during the hungry season (Febru ary through April) when the new grain crops in Niger are not yet harvested (see: www.cassavabiz.org).

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2.6. Economic Outputs

As the main food staple for urban and rural people in the south and the central States of the country, cassava already makes a major contribution to the Nigerian economy. Additionally, the market for industrially processed cassava is growing - Estimates indicate the potential short-term demand for industrial cassava at about 8.8 million MT of fresh cassava annually. This domestic shortfall in demand provi des Nigeri an cassava farmers an increase in demand of more th an 20%. Assuming a well-managed cassava farm that yields 20 MT/hectare, thi s untapped domestic demand implies an increase in acreage of over 440,000 hectares. Sector Current domestic demand 230,000 MT 330,000 MT 1.1billion L Substitution Potentials (MT/product) 115,000 MT 330,000 MT 550,000 MT 160,000 MT 240,000 MT Fresh root
Starch Flour Ethanol E10
50 % 10 % 50 % 10 0% 20%
1,150,000 MT 1,320,000 MT 4,400,000 MT 1.040,000 MT 960,000 MT 8,870,000 MT
Ethanol Industrial/ 160,000,000 L Beverage Animal Feed Total required 1,200,000 MT
Table 2.11: Potential Market for Cassava-derived Products in Nigeria Conversion factor: 1t of starch = 400L Ethanol (98% efficiency). Starch: 5: 1 (raw: starch). Livestock: 4: 1 (raw: chip). Land required: 356,250ha@20t/ha Conversion factor for ethanol: 1: 8 Source: Personal Field observations, Phillips et al (2004), Kormawa et al. (2003)
From the domestic demand analysis presented in Tables 2.11 and 2.12, the necessary economic inputs can be estimated. Based on the capacity figures (small to medium scale), and the cost estimates provided in Annex I, the number of processing plants, and the associated investments can al so be estimated. The analysis shows that the domestic demand has the potenti al to motivate i nvestments in nearly 500 small to medium scale plants in the foreseeable future, with at least 100 such plants in the short run If supporting policy measures are in place. Assuming an average i nvestment of about N20 million per plant, the associated investment would amount to about N10 billion in the foreseeable future (or N2 billion in the short run). Thi s value of investment excl udes the associated investments at th e farm level and the multiplier effects that would be created through other activities and services along the value chai n.

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Sector
Fresh root (million)

0.6MT 1.2MT
Plants
Short Term Medium 1-2yrs Term 2-5 yrs

20% 20% 60% 60% 40% 40% 40%
Long Term >5 yrs

40% 40%
Starch Flour
17 plants (24T/daily) Turn key: 50 plants Batch: 100 plants 214 plants 60 plants
Ethanol E10 Ethanol Industrial/ Beverage* Animal Feed* Total new plants
3.6MT 1.0 MT
100% 40%
10MT
52 plants (10% cassava) 493
33% 126
33% 108
34% 259
Table 2.12: Expected Fresh Roots Demands and Processing Plants to be established Land: 370,000ha (20t@ha). Current Cassava: 45mMT. Land area: 4.9million ha. Fresh root: 46mMt. Conversion factor: 1:5 Conversion factor: 1: 4 (4 x 300 x 10 = 12,000MT/yr; 6,000MT/yr) Ethanol Conversion factor: 1: 8 56 t root will give 6500L ethanol daily x 300 = 16,800MT (16t/day). Conversion factor: 240t fresh root x 10 = 2.4mT/feed (Pellets with 16 ton feed/daily). 4800t/plant daily x = 19.2.

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Chapter 3: A SWOT Analysis of the Nigerian Cassava Industry

The overriding goal of this process is the devel opment and maintenance of a well functioning market for Nigerian cassava and cassava products th at is able to successfully compete wi th cassava products from other countries. A strategic analysis of factors essential to its success include: (a) the approach in successful cassava producing countries; (b) the most appropriate strategies for Nigerian cassava; (c) how can Nigeri a penetrate the internati onal market. A SWOT Analysis responding to these crucial questions will identify the internal and external factors (strengths, weaknesses, opportunities and threats) within the Ni gerian cassava sector, followed by a benchmarki ng exercise against its major competitors, Thailand and Brazil. Barriers to development will be removed by a series of acti vities and outcomes. The expected end result would be new efficiencies gained, economic incentives identified, opportunities for product development and use realized and finally, the industrial growth of the cassava industry.
3.1.
Analyzing the Problem Tree
Cassava
Industry
as
The probl em Tree method identi fies constraints, problems and bottlenecks that directly or indirectl y affect the competitiveness and efficiency of operations within the cassava sector and is essential as constrai nts never happen in isolation and usually affect processes higher in the value chain. The Use Chain situation in Nigeria is analyzed i n the Problem Tree Diagram bel ow.

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Diagram 7: Problem Tree

Raw Material
(Cassava tubers)
Processing Industry Products

(flour, ethanol, pellets, starch)
Market
Unreliable supply and uncompetitive pricing
Scattering processing centres, uncompetitive cottage production systems
Entry of cassava (market access) products in the market place difficult
Increased production
Low supply/ higher prices
Scarcity
Unpredictable supply and demand dynamics
Inconsistent Product Quality
Glut
Reduced Production/ Supply
Low Investment drive (uncompetitive industry)
Poor infrastructure and supply facilities
Stiff competition from noncassava products (corn starch)
No Market (uncompetitive industry)
Inconsistent/ uncompetitive product pricing
Policies do not promote import substitution
Uncompetitive raw material pricing
Inefficient production and high costs of products
Poor marketing of cassava based products and inability to meet supply capacity
High production costs
Low quality products/ No compliance to EIA/GMP/GHP
High product price
Low yields
Low investment drive/ competitive process industry/ low drive towards export
High delivery charges
Low level mechanization Low inputs Poor planting material
No credit
High ex-factory prices
Poor infrastructure and high transport costs
No credit

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3.2. The SWOT Analysis (Within the Value Chain)

3.2.1. Strengths
The Nigerian cassava industry has strengths namely: Domestic Demand. The presence of a huge domestic market is her greatest strength. Climate. Her climate is excellent for growing cassava. Suitable land. Even on marginal soils, cassava thrives and grows in every state wi thin Nigeria. Nigeri a has abundant suitable cassava cultivation lands, much more than the approximatel y 3 million hectares currently under cassava. Familiarity with Cassava Cultivation. Wi th cassava the main food staple in Nigeri a, farmers are very familiar with its cultivation. Presence of R&D Institutions. Nigeria has a core of well-informed and competent cassava scientists, furthered by the IITA and NRCRI in Nigeri a. High Yielding Varieties. Than ks to the work by IITA and NRCRI researchers, high yielding cassava varieti es are available for multiplication and adoption.
3.2.2.
Weaknesses
The major constraints identified as affecting the production of cassava in Nigeria are: Land Tenure. Insecure land tenure may hamper the development of large-scale mechani zed farming. Fragmentation of Cassava Farms. The ineffective Land Tenure system makes access adequate large farmland difficult, and in turn prevents large mechanized cul ti vation. Non-Mechanized Cassava Production, Harvesting, Processing and Preservation. Apart from a few hired tractors, cassava farming is generally done with crude farm implements. These constraints in planting and harvesting are, according to Nweke (2004), caused by the cost of mechanized machinery processing (peelers and dryers), resulting in low quality end products. Low Yields and Low Starch Content of Common Cassava Varieties. The current cassava production yield is not high enough to compete with other crops within Nigeria (e.g. maize), or with cassava products from other countries (e.g. Thail and). Poor Infrastructures. Infrastructure weaknesses throughout the country and in particular in rural areas adversely affect the cassava industry. The roads are bad and transportation costs of mo ving the cassava is hi gh.

March 20 06. 59 Ma rch 20 06. 59 a 20 6
Electrici ty and water are in short communication links are al so very poor.
supply
and
High Transportation Costs. Cassava is highly perishable with a shelf life of 2-3 days. Once harvested, it must be either consumed immediately or processed into more stable product forms. Urgent transportation needs mean higher tran sportation costs. In view of its limited shelf life, cassava processing should occur close to the production areas. Fluctuation in Market Prices. With informal marketing channels and poor information flow, cassava farmers are often unable to process the h arvested roots and sell these at very l ow prices to middlemen who can reach the processors. Additionally, the supply of cassava greatly influences market prices - When cassava is scarce and the prices high, farmers increase production. The subsequ ent oversupply then lowers the market price and farmers plant less cassava, which resul ts in fluctuating price cycles of approximately two to three years (Nweke et al, 1994; Ezedinma et al, 2005a). High Raw Material Costs. Inputs and other expenses make the cost of fresh cassava roots expensive and uncompetitive against competing countries. High Inputs Costs. High transportation costs increases the cost of fertilizers and other inputs. High Energy Costs. Poor public utilities like electricity, mean reli ance on generator and diesel, increasing the total energy costs. Lack of Social Capital. Relationships within the Nigeri an society are usually characterized by distrust. This shortterm perspecti ve often i mpedes lasting business relationships.
3.2.3.
Opportunities
Government Policy. The present Governments protective duties on competing cassava imports and the mandated 10% use of cassava flour create an en abling cassava industry. Urbanization creates a demand for value added cassava products i n the internal markets, especially in the bakery industries following the mandatory 10% inclusion of high quality cassava flour. Regional Markets. Seasonal opportunities exist in the regional markets for staple quality food products. By-products. Markets for by-products and wastes create opportunities for more integrated cassava systems. Production of Modified Starches. Processing starch into high value modified starches such as dextrin, offers further opportunities for domestic substitution and will position Nigeri a as a key supplier in the regional market.

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Lowering Cassava Prices. Lower cassava tuber costs mean lower cost of food in Nigeria. The added benefit i s that it makes the cassava industry more competitive. Rural Employment. In view of the high transportati on costs and the limited shelf life, ini ti al cassava processi ng should occur near production areas, and along with the expected employment opportunities in the petroleum business following the introduction of E10, will improve rural employment. Vertical Integration. New organisational arrangements within the food chain (e.g. clustering system, sales of intermediate cassava products to medium & large scale drying centres) offer opportunities for smaller farmers/processors to link to growth markets. Economies of Scale. Business opportunities exist for improved transportation services that take advantage of growing internal and regional trade in cassava products. Technology Development. Building a strong cassava processing industry will stimulate technology development. Savings in Foreign Exchange. Import substitution will reduce imports of products such as cornstarch and wheat flour, and will reduce the need to buy foreign exchange.
3.2.4.
Threats
Smuggling. Building a strong industrial cassava sector requires at least a temporary set of tariffs on competi ng products. Such tariffs are onl y effective if smuggling will be prevented. A similar situation exists in the textile sector. Globalization of the International Market. Nigeria cassava products will face competition through increased imports of competitively priced cassava products. Temporary Gluts. A glut occurs when the prices are so low that farmers choose not to h arvest their roots. It is generally a location speci fic problem that fuels price fluctuations. Unpredictable Changes in Government Policy. Through adequate governmental policies, cassava postharvest capacity can be developed. Should the reverse occur or following inconsistent implementation and l ack of transparency, the industry will remain ineffective. HIV/AIDS. While HIV/AIDS is not yet a major problem in the country, the threat for the immediate future is likely to affect the availability of labor. Domestic Maize Prices. Domestic maize competes with cassava, as many industrial cassava products can also be made from maize. Pastoralist Clash. Clashes between cassava farmers and trespassing pastoralists may affect the supply of fresh roots.

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Poaching on Cassava Farms. Inadequ ate farm security results in theft. Corruption. Extortion and unnecessary roadblock delays increase the cost of doing business, as the drivers give bribes to avoid the cassava spoiling on route.

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3.3. SWOT Analysis for the Production of Specific Cassava Products

3.3.1. A SWOT Analysis of High Quality Cassava Flour
WEAKNESSES
As a food product, it must meet high regulatory food safety standards. Requires extremely high quality specifications and compliance standards when used as substitute in wheat flour Its yields of 20% are poor when compared to other cereal-based flours.
STRENGTHS
High domestic and regional demand.
OPPORTUNITIES
Enabling Policy. Government
THREATS
Possibility of politics in world market for wheat and negative effects of globalization. High competitive uses for cassava tuber, which is the sole raw material for the product.
Availability of expertise processing equipment.
local and
Savings in exchange.
foreign
Can be used as a substitute in wheat flours and in the processing of composite flours. Has comparable properties with other flours in terms of shelf- life and its use as food meal. Potential foreign exchange earner as an import substitute for wheat It can be a foreign exchange earner through export to the subregion in the immediate future.
Rural employment and income generation.
Lack of dryer.
appropriate
With urbanization, more opportunities for its use in convenience food products (baked). Feasible as a cottage, small, medium and large scales enterprise.
Competitive prices of similar flours in the market especially cereal flours which are also used for baking. Fluctuation in market prices.
Manual peeling.
High cost of cassava roots.
Skepticism about the policy on importation.
Conformation Quality.
to
Table 3.1. High Quality Cassava Flour SWOT Analysis
3.3.2.
A SWOT Analysis of Cassava Starch

WEAKNESSES
It yields lower quantity of starch (20%) compared to other raw material sources such as cereals. No national standard exists.
STRENGTHS
Domestic, regional & international demand exists.
OPPORTUNITIES
Market exists especially for the production of modified starches.
THREATS
High competitive prices of other starches in the domestic and international markets. Competitive uses of the major raw material, cassava, for alternative products. Fluctuation in market prices.
Local available.
expertise
Opportunities for integration exists e.g. waste liquor converted to alcohol. Savings in exchange. foreign
Has several both food and industrial uses cutting across many industries food, pharmaceutical, textile, wood,
Currently more expensive than other starches (e.g. corn) on the market.

March 20 06. 63 Ma rch 20 06. 63 a 20 6 battery, etc. Have comparable and preferred properties, when compared against other popular starches corn, potato. Lower quality starch can be processed using simple technology. Unlike cassava flour, starch can be dried using several types of dryers and achieve good quality products. Can be produced on cottage, small, medium and large scales. Can be a foreign exchange earner in the future from exportation to the international market and more recently, to the African subregion.
Processing requires lots of water.
Diversified products and Value addition.
High cost of cassava roots.
High energy cost.
High cost of processing equipment.
Conformation Quality.
to
Table 3.2. Cassava Starch SWOT Analysis.
3.3.3.
A SWOT Analysis of Ethanol

WEAKNESSES
Large capital investment outlay for food and pharmaceutical grade alcohol, and for the development of medium and large scales enterprises. Can be produced from alternative raw material sources like carbohydrate materials and molasses. With its low conversion ratio of 1:8, it requires large quantities of raw materials.
STRENGTHS
A major intermediate industrial raw material whose uses cut across several industries alcoholic beverages, food, pharmaceutical, chemical, cosmetics, etc. E10 policy has created huge market for ethanol as fuel.
OPPORTUNITIES
Enabling Government. Policy.
THREATS
Government policies may change, especially with change in Government e.g. 2007.
Savings in exchange.
foreign
Can be produced on cottage and small scales for the crude grade and medium and large scales for high industrial grades. Process technology on cottage and small scales is simple, and uncomplicated machines are required.
Employment opportunities in petroleum business sector can be expanded.
As the percentage of ethanol inclusion increases, international market in ethanol will increase. Can be produced from other raw material like carbohydrate materials and molasses. High cost of cassava roots. Conformation to Quality.
Product Standards not yet established.
High energy cost. Lack of distillers.
Table 3.3. Ethanol SWOT Analysis.

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3.3.4.
A SWOT Analysis of Cassava Food Products

WEAKNESSES
Production processes are generally laborious and result in high production costs.
STRENGTHS
Domestic Demand The large population of the country (over 120 million) ensures a large domestic market for cassava staple foods. Regional DemandThere is a regional market for Nigerias traditional staples foods, especially gari.
OPPORTUNITIES
Urbanization is creating opportunities for domestic market expansion as some have become convenience food e.g. gari. Inclusion of gari currently on the list of food Reserves will create production expansion.
THREATS
Competitions from regional markets as other Sub Saharan countries like Ghana, are also developing their cassava industries. Globalization in the international market encouraged by government policies may result in an influx of competing foreign products such as rice and convenience foods. Fluctuation in market prices.
At 20-25%, yields are generally low.
Exports market available as demand increases from West African communities living abroad. High shelf life.
Production is mostly on cottage scales resulting in limited quantities.
Rural employment and income generation.
Scanty produce standardization and quality enforcements.
Low energy cost.
Fluctuation in market prices High cost of cassava roots.
Convenience. Availability of small and affordable processing equipment. Products can be produced on cottage, small and medium scales.
Potential for export.
Table 3.4. Cassava Food Products SWOT Analysis.
3.3.5.
A SWOT Analysis of Cassava Based Animal Feeds

WEAKNESSES
Fluctuation in weather conditions for sun drying the products. Competition from maize based feeds.
STRENGTHS
Domestic demand high.
OPPORTUNITIES
Rural employment.
THREATS
High cost cassava roots. of
Availability of processing equipment. Local available.
small
Income generation especially from cassava waste. Low energy (Solar). cost
expertise
Lack of appropriate pelletizers.
Improves pollution control from other cassava industries.
Table 3.5. Animal Feed SWOT Analysis.

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PART THREE: BENCHMARKING
===========
Cassava Industry Brazil, Colombia and Thailand : a Comparative Study

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Chapter 4: Benchmarking the Nigeria Cassava System

4.1 What is Benchmarking
Benchmarking is the continuous process of measuring products services and practices against the toughest competition recognized as Industry leaders in a given sector. It is also the process of determining who is the very best, who sets the standard, and what that standard is.
4.2. Benchmarking of the Nigerian Cassava Chain Against Competing Countries

In order to compare the competitiveness of the Ni gerian cassava industry on the industrial market, both the productivity of the sector and the prices of the end products are compared. Figure 15 compares domestic Nigerian prices for cassava starch and cassava chips against the world market prices. The substantial difference shows that Nigerian farmers cannot currently compete on the world market The short-term outlook for a rapid expansion of industrial cassava products is therefore bl eak.
450 400 350 300 US$/MT 250 200 150 100 50 0 cassava chips/pellets tapioca/cassava starch Maize
Domestic
World
Figure 15: Comparison of Domestic and World Market Prices for Cassava Chips, Cassava Starch and Maize (Knipscheer et al, 2004). Figure 15 offers another illustration of the l ack of competitive advantage of the Nigeri an starch on the world market. Nigerian prices are converted into US $ at an exchange rate of Naira 135 per US

March 20 06. 67 Ma rch 20 06. 67 a 20 6
dollar. Starch prices are estimated at Naira 55,000 per MT (US $407). Factory cost prices ranged from Nai ra 55,000 to Naira 80,000 per MT starch (US $407-$593). Fresh root cost prices were assumed to be Naira 8,100 (US $60) per MT at the factory gate. While in Brazil, a recent survey of her producers showed that in Northern Brazil dominated by small holder farming system, the 2005 cost price for fresh roots was $45/MT while in the south, dominated by l arge scale farming, fresh roots cost $40/MT This has made Brazil more competitive. (Ezedinma, personal communication, Cardoso 2003)
4.2.1.
Brazil
South America countries, Brazil and Colombia have advanced cassava development systems, which play a vital role in their successful industrialization. With 70% of the South American market share, these two, especially Brazil, has become a leading world producer, processor and marketer of cassava and its products. Brazil and Colombia are very simil ar to Nigeria in several ways, including (Kupoluyi, 2005): Location in the low l and tropical latitudes, with similar climate, vegetation and ecology. Have the same soil types and topography with similar crops cultivated including roots, cassava and cereals. Similar food and feeding patterns. Classi fication as developing countries using international yardsticks.
Despite Nigerias similarities to both Brazil and Colombia, the latter have developed their industri al cassava sectors, proving cassava can be transformed from a staple food to a multi-use industrial raw material. The factors (Kupoluyi, 2005) for the Brazil and Colombia success stories in cassava production, processing and marketi ng include: Yield. Between 1986 and 1998, the Brazilian cassava yields averaged 13 MT per hectare. The planting of improved, hi gher yielding, disease resi stant, pest resistant and high starch content varieties of cassava resulted in increased yields. Low out-put small hold farmers average about 15 MT per hectare, with better lands yielding about 20 MT per hectare. Usi ng mechanized technology yields average 45 MT per hectare. With only 2.2 million hectares under cassava, Brazil produces about 24,000,000 MT per year. Columbia, despi te its agro-ecological challenges, diversity, various systems of culti vation and utilization and other biological problems, averages 12 MT per hectare. With cassava farming in Nigeria only on smallholder farms, her average yield is less th an 11 MT per hectare. (FAO, 2005)

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High Starch Content The average starch content in the cassava varieties cultivated in the State of Sao Paulo (Fi ber, Branca de Santa Catari na, IAC 12, and Mico) were never below 30%, and were on average 33% annually (Sarmento 1997). In comparison, the starch content in cassava from Thailand is around 26% and in Nigeria only around 20%. However, some of the newly released IITA vari eties in 2005 have more than 25% Starch content. Institutional Support Closely linked to success in yields is institutional support. A combination of research firms and institutions has been identified as responsible for the production, extension and marketing strategy successes of these countries. These institutions are: (a) State Agricultural Devel opment Programs; (b) State, National and International research Centers e.g. the state owned Insti tute of Agriculture (IAC) of the Sao Paulo State in Brazil and the Brazilian National Research Centre for Cassava i n Sal vador (CNPMF/EMBRAPA); (c) The International Centre for Tropical Agriculture (CIAT), a centre of excellence for cassava research and devel opment, simil ar to the Insti tute of Tropical Agriculture (IITA) in Nigeria (d) CLAYUCA Centre (Latin American and Caribbean Consortium to Support Cassava Research and Development) located in Colombia. These instituti ons work together to ensure success for the cassava (and other crops) farmers, processors and marketers. Vertical Integration Producers are encouraged and, assisted in integrating with cassava processors. In Brazil, medium to large-scale cassava plantati ons (averagi ng about 500 hectares per family) are integrated with processing faciliti es, especially in very intensive farming areas. For example, a starch company requires raw material from a large number of suppliers. With large land cul tivation the company reduces i ts number of suppliers and business contracts, and with fewer suppliers, has improved raw materi al. Availability of Large Areas Over 70% of producers in Brazil are small-scale holders. Unlike Nigeria however where all the producers are smallscale holders, 30% of Brazilian farmers operate medium and large-scal e farms, producing the bulk of the aggregated output. This dual cassava system in Brazil has a small-scale production, processing, and marketing system called low input-low output system. The second phase is the medium to large-scale integrated production, processing, and marketing called high input-high output mechanized system. This is what makes Brazilian cassava competitive. Colombia also employs a similar dual farming system. The advantages of large scale farming which include economies of scale in production and processing, effici ent use of production inputs, larger outputs and easier access to product markets, play a vital role in the Brazilian and Colombi a success stories.

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Diversification Factor Unlike Nigeria that consumes 95% of its cassava production as food, processing 5-10% for industrial, 70% of Brazils production is industrial; with 50% of this quanti ty used as livestock feed. In spite of the advances in cassava development, Brazil and Columbia still face challenges some of which could be lessons in the devel opment of the Ni gerian cassava industry. These include: 4.2.1.1 Low level of Mechanized Cassava Cultivation A comparison of producti on costs between cassava and corn shows th at corn employs better inputs and automation in its production. Mechanization when carri ed out in the cassava industry signifi cantly l owers labor costs, the cassava root price and allow economies of scale for cassava farmers. 4.2.1.2 Market Concentration Only two companies in Brazil produce about 700,000 MT of cornstarch with their size and share enabling them invest in product research, reach major customers, and reduce production costs. In comparison, the cassava industry i s made up of more than 60 firms, many of which have diversified into higher l evel value added products especially in the modified starch sector. 4.2.1.3 Price Fluctuations Most agricultural raw materials face seasonal price fluctuations. However, cassava prices are subject to great seasonal variati ons. They typically reach a minimum price level during the main harvest period (between May and August) and increase again by the end of the year. In Brazil, cassava starch competes di rectly wi th cornstarch and a price comparison of their raw material s provides a good illustrati on of their fluctuations. Despite great variations in corn price, the instability of cassava prices is much greater. 4.2.1.4 Drying Technology One of the greatest limitations for cassava producers in Colombia is the way drying technology is appli ed. With sun drying the most common method applied, the process becomes cyclic and depends on the times of the year with the most sunshine. This is also the cassava harvest peri od. They are unable to dry outside these climate windows due to lack of sunshine, and small amount of roots. This, in turn, hampers continuous cassava supply and fails to meet the demands of the various secondary industries. An additional problem is poor root quality control. Dirty and unprocessed roots are used and dried, creating poor quality chips which do not meet industrial standards and/or consumer expectations. 4.2.1.5 Slow Adoption of Technologically Higher Yielding Varieties In Colombia the slow introduction of new cassava varieties had hampered the development of the cassava industry. Farmers have been hesitant to adopt technologi cal changes, refusing to seek vari eties with higher yields and quality.

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4.2.2
Thailand
Thailand is often cited as a tropical country that has successfully transformed cassava into an i ndustrial crop (Plucknett et al, 2000). This transformati on was driven by a unique export opportunity to the EU with the transformati on occurring in two phases: In the first phase, the Thai cassava sector accelerated during the late sixties, increasing during the seventies and the ei ghties. With high feed import duties, the EU turned to Thailand for its cassava and soybean meal, as a ratio of 80:20 is equivalent in energy and protein to grain feeds such as maize and barley. Thus, Thai cassava meal was exported to the EU countries. In the l ate 60s, Thailand shifted its focus to cassava pellets processing. The processing into pellets reduces its volume by about 20-25%, thereby reducing transportation costs. There ar e approximatel y 200 pelleting factories in Thailand, wi th an average total capacity of 10 million tonnes per year. Following the EUs withdrawal of its preferential treatment for Thai cassava/tapioca pellets in the 90s, and the end of its export to the EU, Thailand entered into the second phase of its transformation. Having already established a competitive industry, it was able to diversify into starch and starch-based products, with starch processing done at large-scale factori es. Starch and starch-based products are now exported to Australia, Taiwan, Japan, China, and Malaysia. In Thailand, cassava marketing and distribution occurs between smaller producers and export brokers, the latter responsible for shipping the goods to the i mporting country, usually through an import agent in the i mporting country. The products get to the final end-users through a network of wholesalers, distributors, re-exporters. These major players determine the product flow, control trade volumes and also dictate prices.

March 20 06. 71 Ma rch 20 06. 71 a 20 6
Diagram 8: Organization of Thailands Cassava Sector
During the last decade, the Thai starch industry has exploded, with half of its starch production for export. (For local consumption, modi fied starch and syrup industries are the bi ggest local starch consumers). The cassava trade in Thailand remains, typically export driven. It further seeks to increase its yiel d of fresh root per hectare, and improve its effi ciency (Klanarong Sriroth, 2004). With its unusual export beginnings, it cannot serve as a development model for Nigeria. Nonetheless, it highlights two development lessons: 4.2.2.1 Organization of the Private Sector The Thai private sector is well organized and has developed a highly efficient transport and processing system. The trade associations, the two most active being Thai Tapioca Trade Association (TTTA) and the Thai Tapioca Flour Industries Trade Association (TTFITA) interrel ate and develop policies and R&D into native and modifi ed starch. While the TTTA i s focused on developing local and international trade, by providing its members wi th information on export procedures, prices and market linkages, the TTFITA has registered 41 modern starch factories with a production capacity of 2 million MT, producing top quality cassava starch each year. 4.2.2.2 Processing Technology The comparative advantage of the Thai cassava i ndustry lies in its efficient processing, not the low cost of its raw material. Development of the processing industry was stimul ated by a need to improve the uniformity in shape and size of cassava chips required by compound feed producers/users. In addition, during transportation, loading and unloading of chips, the dust generated caused serious air pollution, placing pressure on European importers to improve

March 20 06. 72 Ma rch 20 06. 72 a 20 6
the nature of cassava products handled by the ports. Soft and h ard pellets were created from chips. Thailand began exporting pell ets in 1981, and by 1989, it was virtually the only pellet product exported to Europe. This Thai processi ng technology can be adapted to Nigeria. A review of the manufacturing of cassava starch showed that to achieve effi cient manufacturing and quality product, important factors included: (a) the quality and quantity of processing water, (b) the energy consumption, and (c) the separation and drying processes. For the production of 1 ton of cassava starch, about 15-33 cubic meters of processed water are required. The maximum power demand for factory with capacity of 200 tonnes of starch per day is 1,500 Kw ( 2,010 HP).
4.2.3.
Lessons Learned from Benchmarking Exercise
Although i mmediate export opportunities are modest, opportunities for the expansion of the Nigeri an cassava sector exists. The domestic market offers numerous new uses of cassava products th at can successfully compete against alternative products such as corn, potatoes, and sorghum. Table 4.2 demonstrates that Nigeria must develop higher yielding cassava starch varieti es. A comparative anal ysis of prices of cassava among the four countries highlight the need for mechanized and therefore competitive, cheaper produce at both the farm and enterprise levels in Nigeria. Finally, Nigeria must embrace innovative research and market development. Above all, Brazil and Thailand have both demonstrated that through collaboration by stakeholders, effective leadership of the private sector, support by research institutions, and an enabling government, an industrial transformation in the rural, urban, national, regional and international markets will occur. Nigerias competitiveness in the worl d cassava market should be developed in two phases. In the first phase, a domestic vibrant cassava based industry, helped along by government trade policies, should be developed, and used also in substi tuting products which compete with cassava based ones. Once a healthy cassava industry has been established, regional and worldwide expo rt opportunities should be aggressively pursued.

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Table 4.2: Comparison of Parameters used for Benchmarking Exercise (special
Country
Yield/Acre Production system
Nigeria
8 MT/hectare -Subsistence, labor intensive, scattered holdings Little if any use of inputs.
Thailand
20-45 MT /hectare -Commercial-large scale and vertical integration. -Highly mechanized. -Extensive use of inputs and high yielding varieties. -40
Brazil
20-45 MT tonnes/hectare -Commercial mix: small scale and large-scale clustering and vertical integration. -Some use of inputs. -Use of high yielding varieties. -45-55
Roots factory ($/MT)
price gate
-60
Technology in Use at enterprise level Conversion roots into starch Starch cost ($/MT) factory price
-Mainly low efficiency technologies. -20%
-High efficiency, state of the art technologies.
-Mixed technology withlow level at the small-scale level and high level efficiency at the large scale level. -25%
-25%
-370-590
-210-220
-350
Starch price factory gate($MT) Market access
-407
-225-250
-400
-Low supply capacity -Poor product quality and high exfactory price. -Poor market access. -Not coordinated with no organized marketing. -Limited.
Marketing
-Ability to supply and dominate major world market in price and quality. -Product diversification as part of market strategy to cope with fluctuating markets. -Highly organized and export oriented. -Intensive research and results dissemination.
-Ability to supply high quality products but less competitive than Thailand.
-Highly organized.
Institutional Support
Intensive product research and result dissemination by CLAYUCA.
reference to starch) *Guy Henry and Andrew Westby, 2000 **Survey results (Knipscheer et al., 2004)

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PART FOUR: NIGERIAS CASSAVA EXPORT
===========
Action Plan For The Development of The Cassava Industry in Nigeria

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Chapter 5: Course of Action - Developing the Nigerian Cassava Industry

As shown earlier, considering the successful implementation of cassava development in Brazil and Columbia, the cassava development in Nigeria will also evolve using the Dual System. For sustainability and diversification of operation, first of all, the low input-low output smallholder production, processing, and marketing system will remain. The second phase would be the development of a medium to large scale integrated production, processing, and marketing system, practicing high input - high output mechanized cultivation, using highly efficient processing technologies. The Dual System development may evolve as follows: The Private Sector (dictated to by market trends and demand) is the main player in guiding the development of the cassava sector in Nigeria; through its investment in all stages of the cassava processing in order to initiate a cassava led economic growth. Areas requiring investment are the development of large-scale mechanized plantations for the various processing stages, and investments in consumer industries like textiles, dairy and wood. The Role of the Government would primarily be the provision of an enabling environment in infrastructure especially cheap electricity and other energy sources, favorable investment climate and the implementation of policies supporting the development of a viable competitive cassava industry. Research Institutions as support institutions would provide improved varieties of cassava planting stems for planting. The resultant higher yield would ensure an average national yield of 15 MT per hectare for smallholder farms and an average minimum of 20 MT per hectare in the more productive farms. Using full mechanization, yields will average 45 MT per hectare. The average starch content in Nigerian cassava is only 20%. The Research Institutions should begin to disseminate high starch content cassava varieties (>25%), which are already available at IITA and theNRCRI.

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Market Demand
Volumes Quality specs Prices
Private sector -Diversified investment along value chain

Quality, standards certification Farm Distribution Supply volumes Industry
Government: Enabling environment

Infrastructure Investment policies/ incentives
Support Institutions Analysis, product certification
Research product, policy and technology
Market policies
Agric policies Finance and credit
Diagram 9. Interdependencies (demand-response dynamics) between Actors in the Development of the Cassava Sector TRY AND DEMONSTRATE A MARKET PULL AND GOVERNMENT PUSH ON THE DIAGRAMS BELOW-GOVERNMENT PUSHING INDUSTRY AND MARKET PULLING INDUSTRY AND INDUSTRY PULLING SUPPORT INSTITUIONS (BE CREATIVE)

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5.1. Actions
5.1.1 Policies
The policies that should be formulated and implemented immediately that favor the development of the cassava sector should: Address the demand for industrial products without jeopardizing the availability of traditional cassava food products. Support private sector investments in vertically integrated agribusi ness ventures involving large-scale farms and agro-industries. Address the current Land Tenure System and the use of land (development) for large-scale farming. Address issues relating to affordability and access to investment credit along the value chai n. Address access to technological advances, using in the short term, imported time-tested techniques, while developing the domestic capacity and technologies in the long term. Propose a mechanism to support research along the val ue chain. Develop the domestic market access. market, then pursue regional
Incentives to cassava enterprises breaks and repatriati on of profit.
should
include
tax
Policies on industrial waste management and environmental protection shoul d be enacted and enforced.
5.1.2.
Infrastructure
Provi sion of infrastructure (e.g. energy, electricity, water, roads, communications) in the areas of greatest industrial potential for cassava should be prioritized.
5.1.3.
Promote Vertical Integration and Cluster Development
The previous chapters have demonstrated that in Nigeria a significant domestic demand for industrial cassava products exists, that Nigeria has the resources to produce and process cassava, and that other, comparable countries have been able to develop an efficient and competitive cassava value chain. One of the lessons learned from Thailand and Brazil is the importance of a reliable supply of raw materi als (fresh roots and/ or chips). In Nigeria the quantity of cassava

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cul ti vated primarily by smallholders is inefficient and subsistence oriented rather than market driven. The consequence is inconsistent and costly supply of raw material s. In turn, insufficient supply mean s the processing industries have to interrupt production, which results in their operating below their capacity and at high costs. The development of a viable cassava market in Nigeria demands therefore, a reliable supply of low cost cassava tubers, and a viable relationship between suppliers and plant. One approach that has contributed to reliable supply of raw materials in other sectors and in other countries is called Vertical Integration. Vertical integration refers to the development of contractual links between primary producers (farmers) and industrial processors of agricultural commodities, e.g. cassava. Vertical integration is based on a long-term mutually advantageous relationship where th e processors not only guarantees a mini mum price to the farmers but also provides a series of services, including technical services. In return farmers commit to deliveri ng all, or a significant portion of their production to the processor. In Nigeria, this link is largely missing, but the building of this link is central to the successful development of the cassava economy both as local food and for industrial uses or for export. Alongsi de improving market linkages, further recommendations include: 1. Di ssemination of information through distribution of literature and the organization of workshop, to potential industrial end-users on the available cassava based products. 2. Supply of adequate samples of cassava raw material to industries (e.g., poultry feeding industry, bakeries, and biscuit manufacturers) i nterested in trials. 3. Loweri ng of the input supply industry planting materials, fertilizers and credit costs. 4. Sustainable surplus production of good quality raw materi al, including processing of roots into dried chips and flour where required. 5. Information of how to link farmi ng communities and industrial end users. There are three main ways to establish links between farmers and the industrial sector: Developing Large-scale Farms that are co-owned by processing plants. In addi ti on to Out-Grower schemes, the development of large-scale cassava production requires industrial level processing and not reli ance on small-scale farmers. In Brazil, medium to large-scale cassava plantations averaging about 500 hectares per family are integrated with processing facilities, especially in very intensive farmi ng system. Thi s integration has proven successful in Brazil with many farmers currently culti vating more than 1000 hectares of cassava. Nigeria can still develop large farms. For the growth of the industrial market, industrial processors shoul d be supplied by large-scal e producers as the latter are more likely to apply cost efficient cultivation methods, and to honor

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existing supplier contracts. Smaller scale Out-Growers can learn i mproved cultivation methods from neighboring l argescale farmers. Out-Grower Schemes based on contract arrangements with smallholder farmers. Some i ndustrial companies (e.g., the maize production for cornflakes and tobacco leaves for the Nigerian Tobacco Company) h ave attempted out-grower schemes in the past, which failed. These schemes coul d fail due to difficult production condi tions (i.e., drought), low yields, insuffici ent exten sion services, higher prices offered elsewhere by other buyers, and default by farmers. To ensure its effectiveness, the prices offered should be attractive enough to the farmers to ensure their commitment. To thi s end, both parties must agree to the price formulae reflecti ng prevailing market prices, farmers need of sufficient margins, and end-users demand for relatively inexpensive raw material s (Oyewole 2002). The precondition of sufficient surplus production requires efficient extension services, including, if necessary, the provision of adequate planting material. Feed millers have indi cated the possibility of part-using their sales agents based at distri ct level as extension link. Given the size of most farms in the cassava-producing communities in Nigeria, the formation of farmer groups is necessary to reduce high transaction input suppl y and output marketi ng costs. Private Intermediaries (i.e., Traders and small-scale Processors) provide the missing link between farmi ng communities and industrial processors, especi ally where OutGrower schemes en counter difficulties. Local traders currently supply the textile i ndustry with comparatively modest quanti ties of cassava starch. If industries, like flour mill s should require larger quantities of cassava and do not wish to engage in Out-Grower schemes, private entrepreneurs should then provide the missing link. For example, traders who already deal in starch or fufu could be encouraged to invest in chipping and drying units. Traders could then ei ther purchase fresh roots from farmers and sell dried chips to industri al users, or pay the farmers to do them. The implementati on of Out-Grower or private intermediaries schemes will require facilitation by research institutions, NGOs, and extensi on services. For example, research and extension services have to play a proactive role by introducing appropriate cassava chipping and drying technologies, with industrial end-users committing to strengthening market linkages by related investments. And lastly, by Government providing an enabling economic environment (including an appropriate regulatory and legal framework).
The Cluster Development Approach involves the identification, comi ng togeth er, and operati on of different stakeholders at different levels to achieve a common goal. Clusters should be market-driven. Therefore it should be led by the private sector. The advantages that would accrue from a Cassava Cluster Development include improvement in efficient production and processing. It also enhances rural development through provision of infrastructure, e.g., good networks of road.

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5.1.3.1. Clusters Disputes Settlement Business Associations These Cluster stakeholders provide a forum for dispute settlements in order to avoid a major commercial or trade confli ct. It has a defined leadership structure, mai ntains regular meetings and ensures compliance with codes of conduct. Most of the markets and trade groups in Nigeria use this structure.
5.1.4.
Investment Promotion
Polices relating to investment and agro-sector financi ng should be reviewed, wi th the Government providing the necessary infrastructure and incentives. She should additionally promote investment in the cassava sector by creating awareness amongst potential investors, farmers and financial institutions on the potential of cassava as an industri al crop for ethanol , starch, flour and feed. The types of information investors need include investment costs and profits, raw material availability, Government incentives, and access to credit. Financi ers need information on investment risks, while farmers need to know the different cassava varieties with greater yiel ds, quality and market acceptance.
5.1.5.
Promotion of Research
In prioritizing cassava sector development, continued dynamic research on developing cassava will continue. It must be viewed as the future cash crop for the Nigerian economy and treated as such. Research efforts need to be concentrated on improving varieties that are resistant to diseases and the selection of varieties most suitable for the various industrial products. It shoul d also focus on developing processing technologies and conducti ng marketi ng research.
5.16.
Market Development
A private sector led cassava marketing associati on would improve the marketing and data dissemination sectors, essential for developing the domestic market. To improve market access, market channel s and information on available products and prices must be established.

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Chapter 6: ROAD MAP

PROBLEM
PRODUCTION Low productivity at farm level.
CAUSES
- Low mechanization. -Poor post harvest handling. -Poor agricultural practices. -Low use of input. -Poor planting material -Poor infrastructure -Low investment. - No credit access. - Low supply capacity. -Labor not readily available.
REMEDY ACTIONS
Implement Policies on -Equipment import and fabrication. -Investment at farm level. -Finance and credit lending. -Research financing. -Land Tenure. -Provide agricultural extension services. -Provide infrastructure. -Youth training and migration to cities. Research on -Equipment, yield, disease resistance, fertilizers and herbicides. Investment in -Finance institutions. -Agriculture-cassava sector. -Inputs manufacture and input imports and distribution. -Equipment fabrication. -Cluster development.
RESPONSIBILITY
Government
EFFECT
-Increase in acreage and improved investment climate.
Research institutions and private sector
Private sector
-Access to more efficient equipment, inputs and high quality planting material and products. -Improved productivity and capacity to supply volumes demanded by the market. -Competitive farm gate price.
Table 6: Foreseen responsibilities of the various stakeholders in the implementation of the cassava sector interventions.

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PROBLEM
ENTERPRISE Low productivity and competitiveness at the enterprise level
CAUSES
- Poor technology. - Low product quality. - Unskilled labour. - Low diversification. -Weak institutional support services. -Low investment capacity (finance and information not available). -Inability to supply volume required. -Credit access. -Waste not utilized. -Poor infrastructure.
REMEDY ACTIONS
Implement favourable policies on -Processing Equipment import and fabrication. -Investment in agro-processing. -Finance and credit access for entrepreneurs. -Research financing. -Provision of quality and food safety infrastructure and support services by analysis and certification of products. -Transparent investment procedures. -Investment securities. -Provide infrastructure. -In service skills upgrading. -Financing and accreditation of technical institutions providing technical training. Research on -Equipment, product diversification.
RESPONSIBILITY
Government
EFFECT
-Enabling investment environment. -Well-equipped support institutions. -Development of domestic market.
Investment in -Finance institutions. -Diversified cassava processing activities. -Inputs manufacture and input imports and distribution. -Equipment fabrication. -Quality infrastructure e.g. Laboratories. -Cluster development. -Waste management systems.
Private sector
-Access to more efficient equipment, inputs and high quality planting material and products. -Improved overall competitiveness by competitive ex-factory prices and product quality. -Improved ability to supply.

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PROBLEM
Market Inability to access and compete in markets
CAUSES
-Uncompetitive product price. -Poor product quality. -Inability to supply in quantities demanded.
REMEDY ACTIONS
Implement favorable policies on -Cluster development and dispute settlement. -Domestic utilization of major products such as ethanol, flour, animal feed and starch. -Provide infrastructure. Research on -Product quality and Equipment innovations to improve product quality. -Subcontracting in the Nigerian context. -Market trends and needs. Investment in -Transport and distribution services. -Quality infrastructure. -Market information development and dissemination.
RESPONSIBILITY
Government
EFFECT
-Development of clusters, sub contracting and domestic markets.
-Access to more efficient equipment, subcontracting and market information and projections. -Market information accessible. -Higher quality products. -Timely delivery of products in market.
Private sector
Niigerian Cassa va Maste r Pllan N g eria n C as sa va Maste r Pla n e a C a a Maste a

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DIAGRAM 10 Improving the Productivity and Competitiveness of the Nigerian Cassava Value ChainPotential Implementing Partners
Production Farm Level Processing Enterprise Level Market
Raw Tubers
Value Added Products
Consumer of other industry
Present situation
-Low productivity. -Low yields. -Unreliable raw material supply. -High farm gate prices. -High post harvest losses. -Poor mechanization. -Poor post harvest handling. -Poor agric practices. -Low use of inputs. -Poor planting material.
Low Investment
-Low competitiveness in price and quality.
-Poor market access and so cannot compete.
Causes
-Poor technology. -Low product quality. -Unskilled labour. -Low diversification. -Weak institutional support services. -Waste not utilized.
Low Investment
Technical barriers to trade. Other tariffs, trade facilitation
-No credit access. -Low supply capacity.
-Inability to supply volumes. -Credit access. -Develop market management system. -Develop market information management system.
Improve: -Mechanization. -Research. -Post harvest handling. -Technical skills. Improve Agricultural practices, input supply. -Storage. Desired Actions Improve: -Credit access. -Business management. -Clustering (supply volumes).
-Technology transfer. -Technical skills upgrading. -Food safety GMP/GHP/ HACOP /enterprise level. Strengthen food analysis capacities of cassava,
Improve: -Credit access. -Supply capacity (clustering). -Business management skills. -Entrepreneurship. -Investment Promotion -Policies -Strengthen support institutions, metrology and calibration and standards.
-Investment Promotion
-Export and import policies.
-Investment Promotion -Policy
Impl: AGENCY UNIDO FAO Others, WTO, ITP IITA
-Energy Bio gas generation.

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Four main areas of Intervention emerge as follows Provision of adequate infrastructure to support industrial development. Improvement in the quality and quantity of the raw material supply. Promote Investment in Primary, Secondary and Tertiary Cassava Processing. Development of the domestic market in the short run and the global market in the medium and long term.
Intervention 1: Provision of Adequate Infrastructure to Support Industrial Development
CURRENT SITUATION
ACTIONS UP-TO-DATE
MILESTONES
Services available in target cassava producing regions. All weather roads exist in target regions, lowering transport costs.
PRIORITY MEASURES
Expand services to rural cassava producing areas. Expand rehabilitation to cassava growing regions.
Communication in many GSM. Fixed wireless, internet services regions is satisfactory available. Rural road network is Rehabilitation of main roads is ongoing. poor. Additionally, poor farm roads make transport costs high Poor rail network. More Rehabilitation in progress. competition in hauling large volumes Lengthy Port clearing process Adherence to Automated Systems for Customs Data (ASYCUDA) procedures in progress
Good network of rail lines.
Expand railway line to target regions.
Port Clearing process within 24 hours Dedicate one port in Nigeria for agricultural imports and exports Rural grid network established. Provision of reliable energy to industry by use of alternative power sources e.g. gas. Expand boreholes to target regions.
Electricity supply is poor Privatization of the energy sector is in and disabling progress. Water supply is poor Tubewells and boreholes are being established in some regions.
Water for irrigation and industrial utilization available.

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Intervention 2: Improvement in the quality and quantity of the raw material supply
CURRENT SITUATION
Low yields/ hectare
ACTIONS UP-TO-DATE
-New varieties released and being multiplied by IITA but not enough quantities.
MILESTONES
-Increased yield /hectare from currently 8 tonnes to at least 15 tons/hectare in 50% of commercial cassava farms. -Increased acreage under cassava.
PRIORITY MEASURES
-Rapid multiplication of better varieties - promote investment in seed multiplication. -Policy on Land Tenure to be reviewed. -Link land allocation to cassava Cluster development. -Promote private sector investments in agro chemical industries. -Enact policies to increase imports and affordability of farm equipment. -Promote private sector investments in equipment hiring services. - R&D to develop farm machinery. -Incentives to reduce rural urban migration. -Promote private sector led supply of planting material in the long run.
Land not available to extend -None Land Use Decree not being implemented. expansion of cassava production
-Input subsidies introduced, input imports ongoing- -Stable and competitive supply of cassava Inadequate supply of inputs-herbicides, pesticides private sector led, privatization of fertilizer plants in inputs. and fertilizers progress. Low level of mechanization -25% subsidy of farm equipment such as tractors ongoing. -Tractor assembly plant established. -Zero duty on machinery and tractor. -No solution. -Agencies established to distribute planting materials are not very effective. -Affordable farm equipment more accessible to lease or to own.
Labor intensive and labor expensive/not available Poor supply of high yielding planting material
-Increase in labor supply. -Stable and affordable supply for planting material in volumes demanded by the market. -Increased backward integration and large-scale farms. -Improved productivity, yields etc.
Cassava farms are scattered Poor agronomic practices
-Cluster formation has been initiated albeit on a small scale. -Increase in the provision of extension services and promotion of good agronomic practices.
-Increase clustering of small scale farmers. Promote investment in large scale farms. -Improve the provision of extension services. -Promote producer organization participation in extension services. -Promote private sector led credit provision.
Credit not affordable or accessible
-N40B SMES-equity funding for micro and SMEs.
-More farmers have access to credit.

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Intervention 3: Promote Investment in Primary, Secondary and Tertiary Cassava Processing
CURRENT SITUATION
Low investment in cassava sector. Processing characterized as uncompetitive largely micro and small scale Inability to meet supply volumes
ACTIONS UP-TO-DATE
-Conducive investment climate under development eg. 5 year tax holiday for pioneer industrialists.
MILESTONES
-Increased investment in cassava industry and value chain.
PRIORITY MEASURES
-Develop other incentives to encourage investment. -Provide better infrastructure.
-Clustering has been introduced.
-Clusters of small scale processors visible and functioning more efficiently. -Ex factory prices reduced and competitive with main competitors. -Locally fabricated equipment is efficient. -Increase use of locally fabricated equipment at the industry level. -Market led investment in cassava processing increased
-Provide incentives to promote clustering at the processing level.
High ex-factory prices uncompetitive in global and domestic arenas Technologies in use in the small scale operations are inefficient with limited access to more efficient technology
-High yielding cassava varieties introduced and better infrastructure developed. -R&D on cassava equipment fabrication at local level on the increase.
-Reduce utility, transport, and raw material costs. -Support private sector led R&D in the development of affordable and efficient technologies. -Enforce intellectual property right, copyright and patent laws. -Organize investment promotion, partnerships and cooperatives. -Provide investment incentives. -Implement policies on agro sector credit facilitation. -Upgrade technical training institutions. -Enforce cassava product standards and regulation.
Investments costs for the -Promotion of partnerships. more efficient -Tax breaks introduced, 5-year tax holiday technologies are high for industrialists.
Skilled labor not readily available Poor product quality
-Polytechnics and technical institutions -More qualified personnel available. established but have low capacity to provide highly qualified personnel. -Standards for cassava products under development. -Products of consistent quality in the market place.

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Intervention 4: Development of the Domestic Market in the Short Run and the Global Market in the Medium and Long Term
CURRENT SITUATION
Individual marketing products unorganized Market information not available
ACTIONS UP-TODATE
MILESTONES
-Cassava marketing body is registered and functioning. -Market and sector wide data available.
PRIORITY MEASURES
-Establish a private sector led cassava marketing body. -Mandate of the body to be established above includes generation and provision of market and sector wide data. -Enforce 10% regulation. -Through Research, diversify the use of flour.
Existing domestic market-dependant on imports
HQCF: Policies on: 10% cassava flour substitution in wheat flour-not fully implemented Starch: Tax on imported corn starch
Increased demand for cassava flour in the domestic market.
-Increase in supply of locally produced starch.
-Introduce surcharge on starch imports. -Enforce regulation. -Promote imports in short run. Introduce and formulate policy on 10% inclusion of cassava in animal feed. - Provide incentives that enable industry to produce at competitive ex-factory price. -Enforce food safety and product quality regulations at plant and processing levels. -Improve investment in provision of credit. -Implement policies that encourage diversification for the domestic, regional and international markets.
Ethanol: E10 policy -Increase in number of plants producing ethanol enacted to be enforced in and in the quantities of locally produced march 2006 industrial ethanol. Pellets: no policy yet Poor international market access due to uncompetitive products Export expansion grant (30-40%) -Increase in demand for cassava chips and by products to be used in feed. -More Nigerian products in the international market.
Niigeriian Ca ssa va Master Plan N g er a n Ca ssa va Master Pla n e n Ca sa a s er a

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6.1. Proposed industrial development by Region

As indicated in Chapter 2, cassava is cultivated in nearly all the regions of Nigeria, with each regions climate and topography aiding a specific area of industrial cassava farming. The important criteria are: (a) sun light (for drying); (b) water (for starch processing); (c) cost of land and labour (for raw materials); (d) distance to the market. For instance Nweke (1994) observed that the processing of chips and flour decreases in frequency from 80% in the north and southern guinea savannah zone where sunshine is abundant, to only 25% in the humid zones where sunshine is limited. Additionally, Northern Nigeria regions have abundant sunlight and proximity to regional markets like Niger and Mali. The Central States such as Kogi, Benue and Nassarawa with low labour rates, produce cassava roots at low costs and their long dry season forestalls expensive drying technology. The advantages of the Southern States are their proximity to the urban and export markets and their abundant water supply is excellent for starch processing. However due to its longer rainfall and higher humidity patterns, processing costs are higher, necessitating the use of mechanical drying. Table 6.2 summarizes by cassava sub-sector, the advantages of each region. As the Table shows, flour and pellets can be produced in all regions and moved to local bakeries and feed millers. SS Starch Flour Chips Ethanol Pellets X X X X X X X X SE X X SW X X NC X X X X* X X X X X X X NE NW
Table 6.2: Regional sub-sector cassava development
*Table 6.2 is only illustrative and potential industrial investors should conduct proper feasibility studies themselves.
Criteria: 1. Infrastructure: energy, water and transportation. 2. Proximity to markets (Urban and Export). 3. Low price raw materials and labour. 4. Sun light.

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6.2. The Strategic Development Plan for each Cassava Sub Sector in the Short, Middle and Long Terms
6.2.1. Ethanol
Facts: In view of the Kyoto Protocol Agreement to which Nigeri a is signatory, Ethanol is emerging as an important environmentally friendly motor fuel and its use provides an opportunity for Nigeria to qualify for carbon credits under the Clean Development Mechanism (CDM). Having established an E10 policy, (10% ethanol in all motor fuel beginning 2007), she must produce 550 million litres per annum.
Short Term (1-2 years) -Increase raw material (cassava tubers) supply. -Promote processing Clusters, Subcontracting and Networking. -Improve access to affordable credit and promote investment and partnerships. -Promote imports whilst developing national production levels. -Improve infrastructure and investment climates. -All agencies (SON, NAFDAC, DPR, etc) should enforce compliance with Ethanol guidelines. -Fund research on equipment fabrication and process optimization. Medium Term (25 years) -Pursue local fabrication of production and processing equipment. -Gradually reduce imports. -Intensive investment promotion and marketing. Long-term(5 years and up) -Export promotion.
Ethanol-National Vision -E10 policy.
550 million litres required = 4.4 million tonnes of cassava roots.

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6.2.2.
Starch
Facts: Cassava gives the best quality of starch and has the highest volume per unit of raw material. Compared to other native starch sources, it is the cheapest to produce and would be very competitive if produced efficiently.
95% of cassava starch used in the domestic market is imported. The domestic demand is 230,000 MT starch.
Assuming 50% import substitution, 1.15 million MT cassava roots are required.
Short Term (1-2 years) -Increase raw material supply. -Revise policy on imported starch to nurture the development of the local starch industry. -Promote investment in smallscale industries (3000kg/ day capacity). -Promote Clustering. -Develop R&D on the production of higher starch varieties. Medium Term (25 years) -Promote medium scale factories of 20,000 100,000 kg capacity. Long-term (5 years and up) -Promote large-scale factories using 100,000 500,000 tonnes of raw materials per day.
6.2.3.
Traditional Food and HQCF

Facts: -Cassava is the most widely consumed staple in Nigeri a and in most of West Africa. Its flour can be used in composite flour (10% substitution for wheat flour) without signifi cant change in the quality of the final products.
Short Term (1-2 years) -Increase raw material supply. -Promote farm gate processing of cassava into chips. -Provide incentives for investment in storage and warehousing. -Develop food regulation and legislation. -Develop Clustering and Subcontracting. -Develop capacity building in packaging and marketing of staple foods. -Develop R&D. Medium Term (25 years) Promote medium size factories Long-term (5 years and up)
Existing local demand for 3,300,000 metric tonnes of staple foods. Policy for 10% substitution requires 300,000 metric tonnes of cassava flour.
1.34 Million MT of cassava roots required for composite flour.

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6.2.4.
Pellets/Chips
Facts: There is growing domestic demand for animal feed made from cassava pellets and this demand can be improved with policies requiring inclusion of cassava in animal feed production.
Domestic demand 240,000 tonnes/year
Nearly 1 million tonnes of cassava and cassava waste required annually.
Short Term (1-2 years) -Create legislation for 10% cassava in the production of domestic animal feeds. -Organize farmers into Clusters (about 30 farmers in each unit processing 2 tonnes per day). -Facilitate and/or develop affordable credit access to Clusters. -Organize 20-25 units to form groups of 400-500 farmers. -Capacity building for Cluster members (technical and business management skills upgrading). -Develop investment promotion and incentives for investment in high capacity driers and pelletizers. Medium Term (25 years) -Develop research and funding for equipment fabrication and process optimization. Long-term(5 years and up) -Product diversification- leaf protein processing.
6.3. Mechanisms for Coordination and Implementation

The responsibility for the coordination of the Master Plan and its impl ementation li es with the Ministry of Commerce. An important nongovernmental partner will act as th e private sector responsible for providing market and technical informati on, and in assisting the Mini stry in developing effective private-publi c sector collaboration. Being a private sector-led and market based approach, the successful implementation of the Master Plan will rest largely on the consultati ons, negotiations and di rect involvement of the private sector in the decision-making in policy review and investment incentives. They will ensure issues on political stability, transparen t investment procedures, regulations, security guarantees (personal and investment) for investors, will be addressed, as these form the bedrock for attracti ng investments.

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6.4. The Way Forward

The Master Plan was designed with the objective of making the Nigerian cassava sector competitive in the global economy. To th at end, the global and domestic demand for cassava products have been analysed, and compared with the performance of the cassava industries i n competing countries, notably Thailand and Brazil. Through this study a number of concrete actions have been proposed for each sub-sector (starch, flour, ethanol and animal feed). It must be noted that it is only through the effective applicati on of the proposed interventions and guidelines that the development of a competitive cassava sector will occur. An integrated approach in the implementation of the proposed interventions will determine the success of this Plan. For example, providing access to affordable credit without the provision of pre-requisite i nfrastructure, security and investment incentives will not deliver the desi red results. Additi onally, promoting investment i n processing sector without addressing issues of raw material supply, or promoting cul tivati on without putting in place guarantees for a market of the fresh tubers, are ineffective. Therefore, the key to the successful execution of the Plan is the simul taneous actions by various mini stries, agencies, local governments and private entrepreneurs. This Master Plan al so includes indi cative Enterprise Analysis for the cassava processing i ndustries. The willingness of private entrepren eurs to invest in the cassava sector is the key to its success. These industrial leaders will need the continuing support of the Government of Nigeri a. This support, especially the provi sion of an enabling investment environment, improving infrastructure near new plants locations and development of the new products for the domestic market, will be vital for the effective impl ementation of the Pl an. In preparation of the Master Pl an, UNIDO has ensured th at all private and public stakeholders have been fully consulted with regard to the functionality of the Plan. Therefore UNIDO will be able to assist the Government of Nigeria in ensuring that all private and public stakeholders coll aborate in its impl ementation. Finally, UNIDO proposes in collaboration with the Ministry of Commerce and Agriculture, to provide support in the implementation of this Master Plan.

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Cardoso C. E L,, 2003. Competititvidade E Inocacao Tecnologica na cadeia Agroindustrial de Fecula de Mandioca no Brasil, Tese apresentada a Escolar Superir de Agricultura Luiz de Queiroz, Universidade de Sao Paulo, para obtencao do titulo de Doctor em Ciencias, Area de Concertacao: Economica Aplicada, Julho, 2003 Cock, J.H. 1985. Cassava New potential for a neglected crop. IN: IADS/Winrock International Development Series. edited by S. Breth. Westview Press. Codex Alimentarius Commission (CAC/RCP 1-1969, rev/2-1985, Vol. 1B). Codex Alimentarius Commission (CAC/RS/100-1978). Clark, G. 1994. Onions Are My Husband: Survival and Accumulation by West African Market Women. Chicago and London: University of Chicago Press. Dahniya, M.T; Akoroda, M.O ; Alvarez, M.N.; Kalndaneh, P.M.; Ambe-Tumanteh, J.; Okeke, J.E.; and Jalloh, A. 1994. Development and dissemination of Appropriate Root Crops Packages to farmers in Africa IN: Proceedings of Ninth Symposium of The International Society of Tropical Rot crops. 20-26 October 1999, Accra, Ghana. 1994, edited by Ofori, F. and Hahn, S.K. International Society of Tropical Root crops, Wageningen:The Netherlands, pps 2-9.
De Soto H 2004. The Mystery of Capital: the role of property rights in creating wealth and alleviating poverty, Sir John Crawford Memorial Lecture CGIAR, Mexico DF October, 19p

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Dried cassava and its By - Products. Centro internacial de Agricutura Tropical (CIAT), 2004. Available from < www.ciat.cgiar.org/agroempesas/ sistema_yaca/english/ dried cassava.htm. > Accessed on 03/11/05 at 6.30pm. EFDI-Technoserve 2005. Assessment of different models of cassava processing enterprises for the south and south-east of Nigeria, including the Niger Delta. Draft Final Report submitted to IITA-CEDP, March 2005. Ezedinma, C., L. Sanni and R. Okechukwu. 2005a. Marketing of Gari in Benin City and Enugu, Nigeria. A Component of the Investigations on Building A Food Marketing Policy Evidence Base In Nigeria. Department for International Development (DFID). Ezedinma, C., M. Patino, L. Sanni, R. Okechukwu, P. Ilona, M. Akoroda, A. Dixon. 2005b, Investment options in the High Quality Cassava Flour (HQCF) Enterprise.. Presented at the Stakeholders meeting on Strategies on sourcing high quality cassava flour H. R. Albrecht Conference Center, IITA, Ibadan, Nigeria, Jan 2005. Ezedinma, C., O. Bamikole, M. Patino, L. Sanni, R. Okechukwu, J. Lemchi, F. Ogbe, M. Akoroada, E. Okoro and A. Dixon 2005c. Cassava Ethanol Industry in Nigeria. IITA, Ibadan, Nigeria (In Press). Ezedinma, C., R.U. Okechukwu, L.O Sanni, E. Okoro, J Lemchi, F Ogbe, M Patino, and A Dixon, 2005d, Cross border trade in cassva based productsPoster paper presented to the IITA board of Trustees, June 2005, IITA, Ibadan Ezedinma, C. 2005. Agribusiness Investments in the cassava sub sector in Nigeria: some critical considerations, Paper presented at a workshop on Guiding Investments in the Cassava sub Sector in Nigeria held at IITA Conference Center IITA Ibadan, August 2005 FAOSTAT data (2004). http://faostat.fao.org/faostat/collections?subset= agriculture Fetuga, B. L. and Tewe, O. O. 1985. Potential of agroindustrial by products and crop residues as animal feeds. Nigeria Food Journal 3: 136 142. FOS Nigeria Federal Office of Statistics. 1998. National Consumer Survey, Lagos. Grace. M.R. 1977. Cassava Processing. FAO Plant Production Series No 3. FAO, Rome. Available from <http:/www.fao.org/inpho/vlibrary/x0032/X0032E00.htm>. Knipscheer, H.C., C Ezedinma, P Kormawa, G Asumugha, K Makinde, R Okechukwu and A Dixon. 2004. Opportunities in the Industrial Cassava Market in Nigeria. IITA/UNIDO. Kupoluyi, C.F. 2005. CSF Nigeria: Economic Development Through Poverty Alleviation:Promoting Competitiveness and Sustainable Export of value Added Products. UNIDO. IITA. 1990, Post Harvest Technology. In: Cassava in Tropical Africa A Reference Manual. edited by IITA Ibadan. pp. 82 120. Le Clus, K. and Mwale, J. 2004. Development Plan for the Zambian maize market, ZAMTIE in conjunction with the Ministry of Agriculture and Co-operatives and Zambian National Farmers' Union, Lusaka.

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Lemchi, J.I. 1999. The Marketing System for Cassava in Nigeria Ph.D. Thesis, Department of Agricultural Economics and Extension, Federal University of Technology, Owerri, Nigeria.. Nakatani, M. and Komaki, K. (eds.) 2002. Proceedings of the Twelfth Symposium of The International Society for Tropical Root Crops: Potential of Root Crops for Food and Industrial Resources.. International Society for Tropical Root Crops Nweke, F. I. 1994. Processing potentials for cassava production and growth in Africa. COSCA Working Paper No 3. Collaborative study of cassava in Africa, IITA, Ibadan, Nigeria. Nweke, F.I and P. M. Kormawa. 2005. A wide range of cassava snack foods; Another guided secret in West Africa NIFST Food Forum Vol 3 (1) . pps 24-33. Nweke, F.I. and M. Bokanga, 1994. Importance of cassava processing for production in sub-sahara Africa, IN: Acta Horticulture 375, on International workshop on cassava safety. edited by Bokanga, M., Essers, A.I.A., Poulter, N., Rosling, H. and Tewe, O. Ibadan, Nigeria, pps 401 - 412. Nweke, F.I., Spencer, D.S.C. and Lyam, J.K. 2002. The Cassava Transformation, Africas best-kept secret. Michigan State University Press. Oduro, I., Ellis, W.O., Dziedzoave, N.T and Nimakoyeboah, K. 2000. Quality of gari from selected processing zones in Ghana. Food Control 11. pps 297-303. Okafor, N; Umeh, C, Ibenegbu, C; Obizoba, I and Nnam, N. 1998. Improvement of gari quality by the inoculation of micro-organisms into cassava mash. International Journal of Food Microbiology, 40, pps 43-49.. Oke, O. L. Cassava: Yesterday, Today and Tomorrow. 2005. Paper presented at the Postgraduate College, Obafemi Awolowo University, Ile-Ife, Nigeria. Pp 31. Onabolu. A., A Abass, and M Bokanga 1998, New Food Products From Cassava, International Institute of Tropical Agriculture, Ibadan, Nigeria 40p Oyewole, L.O. 2002. Contract farming for root production and supply. Paper presented at the International Workshop on Cassava Competitiveness in Nigeria, IITA Conference Centre, Ibadan, November 18-20. Oyewole, O.B, Sanni, L. O., Dipeolu, O. A., Adebayo, K. and Ayinde, I. A. 2003. Development of the small and medium scale enterprise sector producing cassava based products to meet emerging urban demand in West Africa. . Annual Report submitted to EU/NRI, December 2003. Oyewole, O.B. and Obieze, N. 1985. Processing and Characteristics of meal from cassava. Tropical Science 35, pps 19-22. "Tapioca"
Phillips T.P., D.S.Taylor, L. Sanni,. and M.O. Akoroda 2004. A cassava industrial revolution in Nigeria The potential for a new industrial crop. . International Institute of Tropical Agriculture, Ibadan, Nigeria. International Fund For Agricultural Development, Food And Agriculture Organization of The United Nations, Rome, Italy. Phillips, P.P., G. Henry, A. Graffham, O. Vilpoux, Boonjit Titapiwatanakun, and D.S. Taylor. 1999. Global Cassava Market Study: Business Opportunities for the Use of

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Cassava.. Assembled by DTP Studies Inc. and funded by IDRC, Ottawa, and IFAD, Rome. Porter, G., 1999. Access to market opportunities in Ghanas off-road communities. Report to the UK Department for International Development, 1999, pp. 50. Porter, G. 2004. Marketplaces in Nigeria: patterns of continuity and change. Nigerian Field 65 (1-2):pps 92-100.. The
PriceWaterHouseCoopers 2002. The Nigeria Investors Roadmapand Enabling Environment Strategy Final Report, Prepared for the Government of the Federal Republic of Nigeria, USAID Nigeria, December, 254p RIM, 1992. Nigerian Livestock Resources. Vol 1: Executive Summary and Atlas. Resource Inventory and Management Limited, Jersey, U.K. RTEP., 2003. Report of the mission on identification of domestic markets for cassava products Agro-industrial Development Unit, Federal Department of Agriculture,. Abuja, Sanni, L. O., Charles, A. and Kuye, A. 1992. Moisture Sorption isotherms of fufu and tapioca, Journal of Food Engineering, 34, pps 203-212. Sanni,L.O. 2005. Cassava Utilisation and Regulatory Framework in Nigeria..UNIDO. Sanni, L. O. 2002. Trends in the drying of cassava in Africa. 12th Symposium of ISTRC-Tsukuba Japan, Nakatani and Komaki editors. pps 113-120. Vilpoux 2000

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ANNEX: Indicative Investment Budgets Cassava Processing Plants

A. Investment Analysis of HQCF Production
for
SMALL-SCALE Capacity Output per annum (metric tons) Price (Naira/t) Number of working days/year Conversion factor Total Income/annum (Naira) Variable costs Raw material required/annum (metric tons) Raw material costs @N10000/t Transport costs @ N500/t per annum Machinery, fuel and repairs (N) Casual labor expenses for peeling (10 persons @N1000/day) Other expenses Total Variable Cost Fixed costs Administrative and Personnel Costs (manager, Plant operators, security) Interest on capital Total Fixed Cost Investment Grater (2t/hour) Hydraulic Press (500kg/hr) Flash dryer 3.5t/day output (or 6t/day for import option)*RD Hammer Mill Pneumatic sieve Bag sewing machine Water borehole Processing building Weighing Scale Installation & other expenses @15% Total Investment, TI Total production cost (Total variable cost +Total fixed cost) TP Net profit/annum (Naira) NP Return to investment (NP / TI) 190,000 400,000 3,000,000 150,000 180,000 55,000 500,000 5,000,000 25,000 1,425,000 10,925,000 60,418,125 13,081,875 1.20
* Source: Ezedinma et al- 2005
3.5t/day 980 75000 280 4:01 73,500,000 3,920 39,200,000 1,960,000 7,500,000 2,800,000 3,000,000 54,460,000 3,500,000 2,458,125 5,958,125

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B. Investment and Cost Structure for a 6500 liters/day Ethanol Plant

Items Number of Production Days in a year Conversion factor (ethanol per ton of cassava flour*) Daily total production of 96%v/v of ethanol Annual Production (liters) Daily cassava flour required (tons) Cost of cassava flour (Naira/ton) Revenue from CO2 Revenue from DDG Price of extra neutral alcohol (N/Liter) Revenue from extra neutral alcohol Total Income/annum (Naira) Net Income Variable costs Raw material (cassava flour) required/annum (metric tons) Raw material costs @N18000/t Transport costs @ N800/t Yeast Enzymes Chemicals Plastic drums (disposable) Total Variable Cost Fixed costs Machinery maintenance & repair Operating expenses Administrative and Personnel Costs (8 nos) Interest on capital @ 22.5% Total Fixed Cost Investment Distillation Column (20years) 4 nos Hydrolysis tanks (15 yrs) Ethanol Storage tanks (15 years) CO2 Purifier (15 years) CO2 Storage Tank (10 years) Ware House (15 years) Land and Building Water borehole (2 nos) Pumps (5 nos) 2,850,000 200000 80,000 2,000,000 1,000,000 250,000 2,000,000 1,600,000 500,000 3,000,000 7500000 1,824,000 4,362,525 9,186,525 4200 75,600,000 3360000 150,000 4500000 900,000 24,000,000 117,210,000 Cost 300 450l/ton 6500 1,950,000 14 18000 49830000 6600000 82 159900000 216,330,000 72,660,419

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Items Electric Generator (250 kva) Mash Buffer Tank (3 nos) Water Storage Tanks (1 million liter capacity) Furniture Delivery vehicle Vehicle fuel & maintenance Generator (diesel) Total Investment (TI) Total production (Total variable cost +Total fixed cost) TP Net profit/annum (Naira) NP Return to investment (NP / TI)
Cost 5,000,000 800,000 580,000 45,000 700,000 1,200,000 1800000 21,934,000 126,296,525 89,933,475 4.10
Source: Ezedinma et al (2005)
NOTES
1. The estimate above gives the pure grade of ethanol at 96%v/v ready for use as beverage and industrial uses in accordance with the EEC specifications on ethanol. 2. Cassava flour milled from cassava chips. Additional investments in milling machines may be necessary if the investor wishes to buy chips and mill in the factory before fermentation. 3. Transport cost for raw material is estimated at 800/T for an ethanol plant within 50 km of a cassava processing area. 4. Minimum personnel includes a production manager (600000/annum) accounts clerk, (180,000.annum), two (2) security guards (240,000/annum), sales executive/purchasing officer (300,000/annum), fermentation/distillation operator (N180000) a maintenance technician (180,000) and a driver (144,000/annum). 4. The distillation column is made of high temperature tolerance steel, capable of delivering 6500LPD of ethanol with 22 years economic life span. 5. Tanks made of stainless steel, for the hydrolysis and fermentation numbering four (4) are arranged in series. Two of the tanks for hydrolyses and two for fermentation. The conversion of the starch in the cassava flour takes place in two stages (i.e. liquefaction and saccharification) in these tanks. Each tank has a capacity of 5000L and 15 years of useful life. This can be sourced locally from Salami Engineering, Ibadan or any other reputable engineering firm. The ethanol storage tank will have a holding capacity of 30,000L. One mash buffer tank (25000L capacity) that will continuously feed the distillation and a raw water tank that will hold 1000,000L are needed. 6. The CO2 purifier cleans up the CO2 liberated from the fermenters into a marketable form with specification in line with the specs mention in this report. This purifier needs to be imported from Louisiana Chemical company (www.icec.com). The economic life span is 15 years while the CO2 storage tank is sourced locally with a minimum useful life of 10 years.

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7. The land, building, and warehouse (about 5000m2 in all) will be adequate for this size of plant. The warehouse, which is estimated to have a useful life of 15 years, will be adjacent to the main building where the ethanol will be produced. The economic use of the building is estimated to be 20 years. 8. Borehole, water and electric generator. Water is important for the ethanol plant. The water table/topography of the ethanol site must be considered before locating the ethanol plant. Two boreholes will give adequate water yield to cope with the water requirements in the plant such as for production, cleaning and housekeeping. The Sulzer brand of pump with a flow rate of 70m3/hr is recommended for filling a 1,000,000L water storage tank within 14 hours. Durable electric generating sets can be obtained from Leventis Engineering or John Holt Engineering. 9. Heat exchangers with plates can be purchased locally in Nigeria. 10. A highly coordinated supply chain of the cassava flour suppliers/farmers is the highest challenge in this project. Periodic training of the suppliers on the cassava flour specifications with adequate record keeping is a must to make this project successful. One of the advantages of this is the ability to trace raw material and product sources. The yeast required is the common bakers yeast. The strains saccaromyces cerevisae and Novozymes enzymes are strongly and highly recommended for optimum and consistent yield. Other chemicals include chlorine for disinfections and antibiotics such as penicillin and viginiamycin and can be sourced in Nigeria from Morrison Plc, Ikeja.

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C. Investment Analysis of Cassava Starch Production

ITEMS Capacity Output per annum (Metric Tons) Price (Naira/T) Number of working days/year Conversion factor Total Income/annum (Naira) Variable costs Raw material required/day (Metric Tons) Raw material required/annum (Metric Tons) Raw material costs @N10000/T Transport costs @ N500/T per annum Machinery, fuel and repairs (N) Casual labor expenses for peeling (10 persons @N1000/day) Other expenses Total Variable Cost Fixed costs Administrative and Personnel Costs (manager, Plant operators, security) Interest on capital Total Fixed Cost Investment Grater (2t/hour) Two Hydraulic Press (500kg/hr) (optional) Flash dryer 3.5t/day output Mill Pneumatic sieve Bag sewing machine Water borehole Processing building/Training Hall/Fence/gate/Shed/security Weighing Scale Installation & other expenses @10% Total Investment, TI Net Profit/annum (Naira) NP Return to investment (NP / TI) 190,000 800,000 3,000,000 400,000 180,000 55,000 500,000 12,850,000 25,000 2,000,000 20,000,000 32,895,000 1.64 3,500,000 1,125,000 4,625,000 12 T/day 3360 33,600,000 1680000 7,500,000 2,800,000 3,000,000 48,580,000 STARCH 3.0 T/day 840 102,500* 280 4:1 86,100,000
Total Production cost (Total variable cost +Total fixed cost) NP 53,205,000
* The mean price per MT of the addition of the prices for food and industrial starch grade was used here. Source: Ezedinma et al. 2005.

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D. Enterprise Analysis for Cassava Chips Production for Livestock

ITEMS Option 1. Peeled Chips 15T/day
1
Option 2. Unpeeled Chips 16T/day 1560 T 32,000/T 180 days 10kg/m2 2.5:1 49,920,000 3900T/annum 35,000,000 1,950,000 80,000 585,000 N.A. 50,000
Capacity Output per annum Price Naira/T Number of working days Dry loading density Conversion factor Total Income/annum (Naira) Variable Cost Raw material required/annum Raw material costs @N10,000/T Transport costs @ N500/t per annum Machinery fuel and repairs (N) Drying labor expenses p.a. (15 persons@N500/day) Peeling labor expenses p.a. (25 persons @N500/day) Packaging and storage material2 (32,000 50kg bags, ropes, packaging funnel (3), wooden pallets) Fixed cost Interest on capital Total Variable Cost Investment Costs Processing building Chipping machines (4 units double chipper of 2t/day) Concrete floors 1500m2@N800/m2 Drying materials (e.g. 20 rakes, 20 shovels, wheel barrow, etc) Weighing Scale Basins/tanks for washing and chipping (10 Nos) Installation & other expenses Well (water source) Total Investment, TI Total Production cost (Total variable cost +Total fixed cost) TP Net profit/year (Naira) NP Return to investment (NP / TI)
1170T 35,000/ T 180 days 10kg/m

2
3:1 40,950,000 3510T/annum 35,000,000 1,755,000 80,000 585,000 975,000 50,000
3,497,175 39,445,000 2,500,000 640,000 1,200,000 100,000 25,000 30,000 1,413,000 20,000 5,928,000 39,194,217 350,992 0.06
3,000,000 37,665,000 2,500,000 640,000 1,200,000 100,000 25,000 30,000 1,200,000 20,000 8,715,000 40,665,000 9,255,000 1.06
Source: Azogu et al (2004)

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E. Investment Analysis for Small Cassava Pelleting Plant for Animal Feed
Items Option 1. With Concrete Floor 2.5t/day 195t 23000/t 180 days 10kg/m2 3:1 4,485,000 585t/annum 1755000 292500 20000 117000 117000 50000 Option 2. With Wooden Tray 2.5t/day 195t 23000/t 180 days 15kg/m2 3:1 4,485,000 585t/annum 1,755,000 292,500 20,000 117000 117000 50,000
Capacity Output per annum1 Price Naira/T1 Number of working days Dry loading density Conversion factor Total Income/annum (Naira) Variable Cost Raw material required/annum Raw material costs @N3000/T Transport costs @ N500/t per annum Machinery fuel and repairs (N) Drying labor expenses p.a. (3 persons@N500/day) Peeling labor expenses p.a. (3 persons @N500/day) Packaging and storage material2 (3000 50kg bags, ropes, packaging funnel (1), wooden pallets) Drying material (e.g. rakes, shovels, wheel barrow, trays2 etc) Fixed cost Interest on capital @ 22.5% Total Variable Cost Investment Cost Processing building Chipping machines (1 units double chipper of 2t/day) Concrete floors 250m2@N800/m2 Weighing Scale Basins/tanks for washing and chipping (10 nos) Installation & other expenses @10% Well (water source) Pelleting machinery (steam conditioner, mill, pelleting press, cooler/dryer) Total Investment cost Total Production Cost Net Profit (loss) Return on Investment
15000
50,000
594371.25 2,351,500 750,000 160,000 200,000 25000 10000 240,150 20,000 1,735,000 3,140,000 2,954,533 1,530,466 0.49
603033.75 2,401,500 750,000 160,000 NA 25,000 10,000 243650 20,000 1,735,000 2,943,650 3,004,533 1,480,467 0.50
1. Price for cassava pellets is estimated at 65% the price of maize. 2. Cost of trays are included only for option 2. Source: Azogu et al (2004).

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F. Investment Analysis for Production of Gari

ITEM Capacity Output per annum (metric tons) Price (Naira/t) Number of working days/year Conversion factor Total Income/annum (Naira) Variable costs Raw material required/day (metric tons) Raw material required/annum (metric tons) Raw material costs @N10000/t Transport costs @ N500/t per annum Machinery, fuel and repairs (N) Firewood at N1000 per day Casual labor expenses for peeling (15 persons @N1000/day) Other expenses Total Variable Cost Fixed costs Administrative and Personnel Costs (manager, Plant operators, security) Interest on capital Total Fixed Cost Investment 2Graters (2T/hour) at N100,000 4 Hydraulic Press (2.5T/day) at N100,000 10 Community fryers (1T/day) at N65,000 Pneumatic sieve Bag sewing machine Water borehole Processing building/Training Hall/Fence/gate/Shed/security Weighing Scale Installation & other expenses @10% Total Investment Net profit /year (Naira) Return to investment (NP / TC) 200,000 400,000 650,000 180,000 55,000 500,000 5,000,000 25,000 2,000,000 9,010,000 3,040,000 0.34 3,500,000 1,000,000 4,500,000 12t/day 3360 33,600,000 1,680,000 7,500,000 280,000 4,200,000 3,000,000 50,260,000 GARI 3tons/day* 840 70,000 280 4:1 58,800,000
Total production Cost (GC) (Total variable cost +Total fixed cost) 55,760,000
*: Output for 10 community fryers producing 1 ton per day Source: Ezedinma et al (2005 )

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NIGERIA

Cassava Master Plan

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

CONTENTS PAGE Glossary and Acronyms

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

1.4. The Global Market Trend

1.5. Processing Technologies

Chapter 2: The Nigerian Cassava Production System

2.4. The Nigerian Cassava Industry

2.5. The Nigerian Cassava Industry in the World Context

2.6. Economic Outputs

Chapter 3: A SWOT Analysis of the Nigerian Cassava Industry

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

3.2.2. 3.2.3. 3.2.4. 3.3.1. 3.3.2. 3.3.3. 3.3.4. 3.3.5.

3.3. SWOT Analysis for the Production of Specific Cassava Products

Chapter 4: Benchmarking the Nigeria Cassava

4.2. Benchmarking of the Nigerian Cassava Chain Against Competing Countries 66

Chapter 5: Course of Action - Developing the Nigerian Cassava Industry

5.1.3.1. Clusters Disputes Settlement Business Associations

Chapter 6: ROAD MAP

Indicative Investment Budgets for Cassava Processing Plants

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Glossary and Acronyms

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Outline of the Master Plan

Cassava The World Context

The Present Situation of the Nigerian Cassava Sector

Cassava Industry- Brazil, Colombia and Thailand: a Comparative Study

Action Plan for the Development of the Cassava Industry in Nigeria

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

PART ONE: INTRODUCTORY SECTION

Cassava The World Context

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Chapter 1: The World Cassava Outlook

1.1. The Value Chain Approach

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Ca ssava Master Pllan Nige rian Ca ssava Mas ter P a n N r n a s v s rP n

A Simplified Example of the Casssava Value Chain

Traditional African Food Processing

Cassava Fresh roots

Flour Production (Chipping, Drying, Milling)

Bakery and confectionary baking

Bread, candies, cakes, ice cream

Distilleries Final Distillation

Fuel ethanol other industry, Beverages, pharm industry

Processed Foods Bullions Textile industry Pharmaceuticals

Soups, sauces, sausages

Garment Pills, capsules and syrups Paper & wood Furniture

Other modified Starches

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Productivity -Higher yields level.

-Plantation production on increase.

Table 1.1: Global trends along the Cassava Value Chain

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP n