Banana Value Chains in Central Africa: Constraints and Opportunities

Smallholder farmers in developing countries need to improve their position in food value chains in order to improve their margins and as a strategy for coping with agricultural food price volatility through innovations within the chains. Value chain mappings and gross margin analysis were employed to assess constraints and opportunities for existing value chains for bananas in Central Africa using market survey data. The results showed weak linkages within the banana value chains with poor integration of value chain actors and minimal involvement with regional markets and high-value domestic chains such as supermarkets. Value addition in terms of agroprocessing was carried out at small scale levels using rudimentary techniques limiting the final product to low value markets. Transaction costs comprising transport, handling and storage comprised a high proportion of cost items in the value chain. Generally, the findings suggest that efforts aimed at strengthening linkages within the value chains, collective marketing, penetration into high-value chains and improved processing techniques may provide a potential avenue for enhancing banana value chains in Central Africa.banana value chains, smallholder farmers, Central Africa, collective action, Crop Production/Industries,

The impact of transaction costs on the participation of smallholder farmers and intermediaries in the banana markets of Burundi, Democratic Republic of Congo and Rwanda

Agriculture is considered a critical sector in attaining economic growth for most economies in Africa. However, for the sector to play its role, it needs to be commercialised to enable smallholder farmers to participate in markets and, hence, improve their incomes and livelihoods. In most developing economies, smallholder farmers find it difficult to participate in markets because of the numerous constraints and barriers mostly reflected in the transaction costs that make access to input and output markets difficult. When analysing the effects of transaction costs on market participation, much attention has been accorded to farmers while ignoring middlemen/traders who are also part of the marketing system. Furthermore, studies on the effect of transaction costs on market participation tend to focus on grains and cereals while ignoring agrocommodities that are more perishable. The purpose of this study was to holistically examine the effects of transaction costs on participation of smallholder farmers and middlemen in banana markets of the Great Lakes region in central Africa. The study adopted a non-separable household model which incorporated fixed and proportional transaction costs in the function of maximising utility subject to resource constraints. The Heckman procedure was used to determine the factors affecting the discrete choice of smallholder farmers on whether to sell and quantities to sell while catering for selection biases. Probit analysis was used to determine the farmers’ choice of selling point while the ordinary least squares method was used to analyse the extent of participation of traders. Variables capturing transaction costs in regards to information gathering, negotiating, contracting, monitoring and enforcing of contracts were used in the analyses. The empirical analyses were based on secondary data availed for 2666 farming households and 494 traders located in Burundi, Democratic Republic of Congo and Rwanda. The results of the study indicate that fixed and proportional transaction costs distinctly affect the participation of smallholder farmers in markets. Belonging to farmer groups facilitates information exchange which reduces fixed transaction costs and, hence, increases the likelihood of farmers to participate in markets. The size of a household, distance to markets and ownership of transport means, which is linked to proportional transaction costs, influence the extent of farmer participation in markets. The choice of selling point was significantly influenced by household size, the gender of the household head, off farm revenue, access to price information and the extent of remoteness of household. The effects of transaction costs on market participation of smallholder farmers were more evident in the analyses for bananas than in the one for beans. The participation of traders was significantly influenced by gender, trading experience and supply distance which relate to the bargaining prowess, business networks and per unit transport cost, respectively. Interventions geared towards supporting associations for farmers may facilitate information exchange and enhance bargaining and contracting skills which subsequently reduce transaction costs. Policies aimed at supporting investment in rural infrastructure, in terms of feeder road networks and market places, can lead to reduction in transaction costs and thereby enhance participation of farmers and traders in markets.Thesis (PhD)--University of Pretoria, 2011.Agricultural Economics, Extension and Rural Developmentunrestricte

Effects of transaction costs on choice of selling point : a case of smallholder banana growers in the great lakes region of Central Africa

This article examines the effects of transaction costs on the choice of marketing channel by smallholder banana producers (i.e. travel to the market to sell their produce versus selling at the farmgate). A probit analysis is used to identify the factors which determine the choice of a selling point. Variables capturing transaction costs are used in the analysis and these relate to searching for a trading partner, gathering information about the transaction, contracting, negotiating, monitoring and enforcing of contracts. The findings reveal that collective action, gender of household head, degree of dependence on the crop, geographical location and access to price information significantly affect the choice of selling point. This suggests that policies aimed at establishing market information systems, promotion of collective action among smallholder farmers, increased investment in rural infrastructure and achieving gender balance in trade are important.http://www.tandfonline.com/loi/ragr2

Effect of different processing conditions on proximate and bioactive contents of Solanum aethiopicum (Shum) powders, and acceptability for cottage scale production

The purpose of this study was to investigate the effects of different processing conditions for production of dried Solanum aethiopicum (S.) leaf powder by comparing solar drying and cabinet drying processing techniques. Four (4) pre-treatments were done on S. aethiopicum leaves to inhibit enzyme action and prolong storage life. Treatments included dipping in; 10% saline solution, 10% vinegar solution, water (as the control), and steam blanching; done for both whole and sliced S. aethiopicum leaves. Each of the resultant samples were dried in both solar and cabinet dryers for a period of 24 hours. The dried leaf samples were grounded into powder using a coffee grinder and subjected to different laboratory analyses including; catalase activity, moisture content, vitamin C retention capacity and phytate content analyses. The results obtained were analysed using MINITAB version 16.0 at 5% significance level. The results showed that there was a reduction in catalase activity after pre-treatment and drying from 5.0±0.0 cm3 for the fresh un-treated leaves to a range of 4.5±0.7 – 3.0±0.0 cm3 for whole solar dried; 4.5±0.7-4.0±0.0 cm3 for sliced solar dried; 4.0±0.0 - 3.0±0.0 cm3 for whole cabinet dried and 3.5±0.7-2.3±0.7 cm3 for sliced cabinet dried leaf powder. Solar dried S. aethiopicum leaf powder contained significantly high moisture content than hot air cabinet dried one (24.9±0.5 % for saline treated sliced leaves to 8.9±0.8 % for blanched sliced leaves, than hot air cabinet dried one with 9.3±0.0 % for sliced plain water treated leaves to 7.0±0.2 % for sliced vinegar treated leaves; respectively). Cabinet dried S. aethiopicum contained significantly more vitamin C content (1.1±0.2 mg for whole blanched leaves compared to 0.6±0.1 mg for sliced vinegar treated leaves) than the solar dried one (1.0±0.2 mg for sliced plain water treated leaves to 0.6±0.1 mg for sliced vinegar treated leaves). There was no significant difference in phytate content between the hot air cabinet dried and solar dried i.e. 0.7±0.1 - 0.2±0.1 mg for solar and 0.7±0.1 - 0.3±0.3 mg for cabinet dried. Solar dried S. aethiopicum powder contained significantly higher catalase than the hot air cabinet dried one (4.5±0.7 - 3.0±0.0 and 4.0±0.0 - 2.5±0.7 cm3; respectively). However, in terms of acceptability, there was high preference for saline treated leaf powder soups compared to other soups. It can be concluded that High activity of catalase, moisture retention and high loss of Vit.C occurs in the solar drier than in cabinet drier. Whole leaf saline pretreated leaf powder soup is rated high compared to other dried soups. Therefore, the best method for production of dried S. aethiopicum powder is by slicing, dipping it in plain water and drying using a cabinet dryer. Under circumstances where cabinet drying is not achievable, solar drying is recommended using whole leaf, pretreated with saline water to promote preservation and consumption of the vegetable

Banana Value Chains in Central Africa: Constraints and Opportunities

Smallholder farmers in developing countries need to improve their position in food value chains in order to improve their margins and as a strategy for coping with agricultural food price volatility through innovations within the chains. Value chain mappings and gross margin analysis were employed to assess constraints and opportunities for existing value chains for bananas in Central Africa using market survey data. The results showed weak linkages within the banana value chains with poor integration of value chain actors and minimal involvement with regional markets and high-value domestic chains such as supermarkets. Value addition in terms of agroprocessing was carried out at small scale levels using rudimentary techniques limiting the final product to low value markets. Transaction costs comprising transport, handling and storage comprised a high proportion of cost items in the value chain. Generally, the findings suggest that efforts aimed at strengthening linkages within the value chains, collective marketing, penetration into high-value chains and improved processing techniques may provide a potential avenue for enhancing banana value chains in Central Africa

Transaction Costs and Smallholder Farmers’ Participation in Banana Markets in the Great Lakes Region

This article analyses the determinants of the discrete decision of a household on whether to participate in banana markets using the FIML bivariate probit method. The continuous decision on how much to sell or buy is analyzed by establishing the supply and demand functions while accounting for the selectivity bias.Results indicate that buying and selling decisions are not statistically independent and the random disturbances in the buying and selling decisions are affected in opposite directions by random shocks. Transaction cost related factors such as geographical location of households, market information sources and travel time to the nearest urban centre do influence participation. Other factors such as labour availability, farming experience, gender of household head, off-farm income and the asset base of the household also affect the likelihood and intensity of participation.Policies guiding central and local governments towards increased investment in rural infrastructure (i.e. feeder roads networks, trunk roads, telecommunication services and establishment of market places) can help reduce transaction costs and thereby improve participation of smallholder farmers in markets. Policies supporting group formation may lead to improving economies of scale and flow of information amongst farmers which may increase market participation

Transaction costs and smallholder farmers’ participation in banana markets in the Great Lakes Region of Burundi, Rwanda and the Democratic Republic of Congo

In this study, the Heckman procedure was used to analyze the way transaction costs affect smallholder farming households’ participation in banana markets in the Great Lakes region of central Africa. The results reaffirm that fixed transaction costs largely determine a farmer’s decision to participate in the market, and that the extent of participation is affected mainly by proportional transaction costs. Access to market information, whether directly or through formal or informal institutional arrangements, is critical for market participation. The size of the household and ownership of means of transport are critical in determining the intensity of market participation. The geographical location of the household affects market participation, since some locations have better infrastructure and hence are more commercialized. Policies aimed at encouraging market information access, investments in rural infrastructure and collective action by farmers may help to lower transaction costs and thus enhance market participation

Transaction costs and smallholder farmers’ participation in banana markets in the Great Lakes Region of Burundi, Rwanda and the Democratic Republic of Congo

In this study, the Heckman procedure was used to analyze the way transaction costs affect smallholder farming households’ participation in banana markets in the Great Lakes region of central Africa. The results reaffirm that fixed transaction costs largely determine a farmer’s decision to participate in the market, and that the extent of participation is affected mainly by proportional transaction costs. Access to market information, whether directly or through formal or informal institutional arrangements, is critical for market participation. The size of the household and ownership of means of transport are critical in determining the intensity of market participation. The geographical location of the household affects market participation, since some locations have better infrastructure and hence are more commercialized. Policies aimed at encouraging market information access, investments in rural infrastructure and collective action by farmers may help to lower transaction costs and thus enhance market participation.Dans cette étude, la méthode d’Heckman a servi d’instrument pour analyser la manière dont les coûts d’opération affectent la participation des petits fermiers au marché de la banane dans la région des Grands Lacs de l’Afrique centrale. Les résultats montrent une fois de plus que les coups d’opération fixes influent grandement sur la décision d’un petit fermier à se joindre au marché, et que l’ampleur de la participation dépend principalement des coûts d’opération proportionnels. L’accès à l’information concernant un marché représente un facteur fondamental de la participation au marché, que celui-ci soit direct ou qu’il soit obtenu grâce à des arrangements institutionnels officiels ou officieux. La taille du ménage et le fait de posséder un moyen de transport sont les déterminants cruciaux de l’intensité de la participation au marché. La situation géographique de l’exploitation agricole affecte la participation au marché puisque certaines zones possèdent une meilleure infrastructure, et sont par conséquent plus commercialisées. Les politiques visant à encourager l’accès à l’information sur les marchés, les investissements en matière d'infrastructure rurale et l’action collective des fermiers pourraient faire baisser les coûts d’opération et par conséquent pourraient augmenter la participation aux marchés

The Market for Animal-Source Foods in Uganda: Looking Beyond Quantity: Rapid Apprasial of Consumer Preferences for Retail Outlets, Retail Forms and Safety and Quality Attributes

This paper presents the results of a rapid consumer survey undertaken in Uganda. The survey aimed at identifying preferred quality and safety attributes, retail forms and retail outlets for major livestock products and by type of consumers. Results of the survey, combined with nationally representative household datasets, allows description of both the quantitative and qualitative dimensions of the developing market for animal-source foods, which is anticipated to provide major business opportunities for small-scale livestock producers in the short and medium terms

Consumer Preferences for Animal Source Foods in Uganda: Quality, Retail Forms and Retail Outlets

This paper presents the results of a rapid consumer survey undertaken in Uganda. The survey aimed at identifying preferred quality and safety attributes, retail forms and retail outlets for major livestock products and by type of consumers. Results of the survey, combined with nationally representative household datasets, allows description of both the quantitative and qualitative dimensions of the developing market for animal-source foods, which is anticipated to provide major business opportunities for small-scale livestock producers in the short and medium terms