Inclusive Business Models for Sorghum and Millets: Three Case Studies, Socioeconomics Discussion Paper Series Number 5

Inclusive business models combine profitability with the potential for poverty reduction by linking smallholders with markets. This report analyses three business models relevant for sorghum and millets in east and southern Africa. These are: The Warehouse Receipt System operated by Lesiolo Grain Handlers Limited (LGHL) (Kenya), the contract sorghum grower model operated by Smart Logistics Solutions Ltd (SLS) (Kenya), and the contract finger millet grower system operated by the LEAD Project (Uganda). The performance of these business models was evaluated in terms of their design, profitability, and inclusiveness. The WRS is a producer-driven model that depends on the willingness and ability of producers to store grain until prices rise. The case-study of the WRS operated by LGHL showed low uptake by maize growers due to constraints imposed by low awareness among growers, a minimum 10 t threshold of grain accepted for storage, and the distance to the store. In 2011, only 600t of maize entered the WRS from five farmer groups. Although the WRS was profitable for maize growers, the seasonal rise in prices was much lower for sorghum and millets, which greatly reduced the potential benefits of WRS for these crops. A recent survey of participants showed that the WRS was inclusive, with high rates of participation from small maize producers and from women. The Smart Logistics business model is a buyer-driven model driven by the growing market for clear sorghum beer. Smart Logistics acts as an intermediary for the brewery industry, supplying seed to producer groups, monitoring quality, and offering higher prices than local brokers. The model is profitable for growers, intermediary, and buyer. Volumes supplied to the industry have grown but are still not sufficient to meet demand. The model is inclusive with the majority of producers belonging to all-female groups, and collective farming to reduce unit costs. Of the three models studied, this has the greatest potential. The LEAD business model was designed to provide Unga Millers Ltd in Nairobi with an annual supply of 6,000 t of finger millet. However, the model proved unworkable. No finger millet was ever delivered. The business model was profitable for Ugandan growers and for the buyer. The model was also inclusive, with finger millet supplied smallholders organized in producer organizations, where almost half the members were women. However, the model failed because it was intermediary-driven. Changes to the original design by the LEAD management team delayed the start of the project while the small company appointed to bulk, clean, and ship finger millet to Nairobi was unfit for this role

The value chain for sorghum beer in Kenya. Socioeconomics Discussion Paper Series 16

This discussion paper analyses the value chain for sorghum beer in Kenya, from growing Gadam sorghum to the production and retailing of Senator Keg. The business model developed by Smart Logistics Solutions Ltd. was used to analyze social inclusion in the value chain. A stratified random sample of 300 members and non-members of Smart Logistics groups in eastern Kenya was sampled in the main growing season for sorghum in 2012-2013. Based on interviews with major actors, the Value Links methodology was used to map the value chain and quantify value addition at different stages of the value chain. Analysis of value addition showed that growers received 4 % of the retail price of sorghum beer, Smart Logistics 1 %, EABL 81 %, Senator keg distributors 5 % and Senator keg retailers 9 %. No information was available on intermediate costs or value added for sorghum brewing. Profitability for Smart Logistics depended on volume while, following the imposition of excise duty in 2013, profitability for retailers was negative. The average member of a Smart Logistics group planted 1.71 acres to sorghum and harvested 483 kg per household of which 305 kg (63 %) was sold. Shortage of land, shortage of labour, and low profitability were reported as the most important constraints on sorghum production. Bird-scaring and threshing were the two most important labour constraints. Ninety percent of group members sold their sorghum to Smart Logistics. The main complaint by members was the time spent waiting for payment. The average time waiting for payment was 4.5 weeks. Only 5 % of growers were paid within the 1-week target set by Smart Logistics. On average, members selling to a Smart Logistics collection centre in 2012 sold 342 kg of sorghum at a price of 25 KES/kg, earning KES 8,550 from sorghum sales. Most income from sorghum was invested in children’s education. Members of Smart Logistics groups spent an average of KES 32,000 on education per year, of which KES 18,000 went on university education. Income from sorghum (KES 8,550) was equivalent to one quarter of annual investment in education. A significantly higher share (83%) of the members of Smart Logistics groups reported an improvement in their economic position since 2009 compared to non-members (70%).Members of Smart Logistics groups were significantly more likely to be headed by women, have high dependency ratios, and own less land per adult family member. Membership was not significantly related to income per head. The main reason given by non-members for not joining a Smart Logistics group was that they did not have time to attend group meetings and meetings at demonstration plots. The price of sorghum beer depends on the level of excise duty. From 2004 Senator Keg enjoyed zero excise duty, making it competitive with illegal brews. As a result, Senator Keg became EABL’s best-selling beer by volume. However, a sharp rise in public expenditure and domestic debt has increased the need for government to raise tax revenues. Following imposition of a 50 % excise duty in 2013, sales of Senator keg have fallen by an estimated 80 %. In the long-term, the future of sorghum beer in Kenya depends on growth in income per head. In the short term, it depends on lower excise duty to make it more affordable for low-income consumers

Changing Perception through a Participatory Approach by Involving Adolescent School Children in Evaluating Smart Food Dishes in School Feeding Programs – Real-Time Experience from Central and Northern Tanzania

The study aimed to test the prospects for, and acceptance of, pigeonpea and finger millet-based dishes in a school feeding program for 2822 adolescents’ in Central Tanzania. The focus was on incorporating nutritious and resilient crops like finger millet and pigeonpea through a participatory approach involving series of theoretical and practical training sessions, for the period of 6 months on the nutritional quality and sensory characteristics of these two unexplored foods in Tanzania. Sharing knowledge on the nutritional value of these crops and involving students in the acceptance study changed their negative perception of finger millet and pigeonpea by 79.5% and 70.3%, respectively. Fifteen months after the study period, schools were still continued feeding the dishes and more than 95% of the students wanted to eat the finger millet and pigeonpea dishes at school. Around 84.2% of the students wanted to include pigeonpea 2–7 times a week and 79.6% of the students wanted to include finger millet on all 7 days in school meal. The study proved that it is possible to change food perceptions and bring about behavior change by sharing knowledge on their benefits and by engaging the consumers through a participatory and culturally appropriate approach

Beyond a unitary household measure: Does Gender matter in Legume Seed Systems among Smallholder Farmers?

We employ a non-unitary household model to analyze the main Pigeonpea seed channels for in Kenya. The paper is based on a household survey conducted on a 500 randomly selected households within three counties of Eastern Kenya. The study sites are based on the distance from the main trading center (county headquarters) which informs agro business infrastructure. We assess the participation in seed channels with regards to joint plots, women plots and male plots for Pigeonpeas legumes. More than half of the Pigeonpea plots (>50 %) in the sample are managed jointly by men and women; while around 10% are managed entirely by women. There were very few plots (<1%) managed by men alone. The main legumes seed sources are own saved seeds and cereal stockists. There is very limited sourcing from the certified seed channel (<10%), the certified seeds from agrovets are only acquired for joint plots. Using a multinomial logistic regression, we analyze the factors influencing the choice of Pigeonpea seed channels, encompassing characteristics of the wife of the household head. Literate wives and wives with high exposure to extension services were more likely to access seed from the agrovets, these variables were however not significant for the male head. Other significant determinants were total livestock unit, distance to the source of seed, amount of seed required, location of the household, and occupation. We conclude that targeting women farmers with knowledge and capacity building on the advantages of using certified seeds for legumes has the potential to enhance adoption of legumes in Eastern Kenya, education levels notwithstanding

Sorghum and Millets in Eastern and Southern Africa : Facts, Trends and Outlook

This report analyses current and projected trends for sorghum and millets in Eastern and Southern Africa (ESA). Cereal production in this region is dominated by maize (70%) with sorghum accounting for 7% and millets 2% of total cereal production. Between 1981 and 2012, trends in the area, production and yield of sorghum were negative for southern but positive for eastern Africa, where production doubled to reach 6 million tons. Production growth was led by Ethiopia and Somalia. Yields varied widely, from 5 t/ha in Botswana and 2 t/ha in Ethiopia to 0.3 t/ha in Zimbabwe. Sorghum was used primarily for food (64%) or food processing (14%) with 19% for other non-food uses and just 3% for animal feed. ESA was a net importer of sorghum, with Ethiopia and Sudan the largest importers, and Uganda the largest exporter. Domestic prices for sorghum were higher than world prices, which ranged from $100-200 USD per t. Despite its image as a poor man’s crop, the price of sorghum was higher than for maize in Ethiopia and Kenya, although not in Zimbabwe. Trends in the area, production and yield of millets over the same period showed weak but positive growth. Four countries – Ethiopia, Zimbabwe, Tanzania and Uganda – accounted for the bulk of production. Strong production growth in Ethiopia was offset by negative growth in Uganda due to civil unrest. Yields varied from 1.5 t/ha in Ethiopia to 0.2 t/ha in Zimbabwe. Millets were used primarily for food (68$200-400 USD per t, or twice the price of sorghum. Domestic prices were above world prices, with the relative price of millet higher than maize in Ethiopia and Kenya, though not in Zimbabwe. Trade in millets was thinner than for sorghum, with Kenya being the biggest regional importer. The East African Community allows free trade in cereals among member states but this is hindered by high transport costs and periodic export bans in drought years. Since 2004, the region has run a trade deficit in sorghum and millets. Nominal Rates of Protection between 2005 and 2012 were negative for sorghum and maize in Ethiopia, subsidizing domestic consumers, but positive or close to zero in Kenya, protecting domestic producers. Projections using the IMPACT model (International Model for Policy Analysis of Agricultural Commodities and Trade) show production of sorghum in ESA rising from 6.6 million t in 2015 to 19.5 million t in 2050, and from 2.3 to 7 million t for millets. By 2050 ESA is projected to change from being a net importer to being a net exporter of sorghum (2.5 million t) and millets (1.8 million t). Scenarios were run to determine the impact of higher income growth, 25% faster yield increases for sorghum, millets and maize, and climate change using climate models GFDL (Geophysical Fluid Dynamics Laboratory) and MIROC (Model for Interdisciplinary Research on Climate). In combination, the effect is positive, increasing production of sorghum by 33% and of millets by 56% over the baseline scenario by 2050.These results suggest that in the future, sorghum and millets will play an increasingly important role in food security and trade

Harnessing Opportunities for Productivity Enhancement for Sorghum & Millets (HOPE): Baseline Survey, Uganda, Series Paper Number 41

A survey was conducted in 2015 to provide baseline information for HOPE project activities for finger millet in Uganda. The sample comprised 94 treatment and 96 control households from Serere and Lira districts. The majority of treatment households (52%) had adopted improved varieties of finger millet in the main season (March-July), compared to just 10% of households in the control group. Farmers’ top three trait preferences were for high yield, early maturity/drought resistance, and marketability. About 60% of finger millet production was sold. Farmers’ top three perceived constraints on finger millet related to marketing, including low prices, price fluctuations, and high transport costs. Decisions about crop sales and use of income from the sale of finger millet were not made exclusively by men but mostly shared. About one-third of households in the treatment group had participated in project activities and received small seed packs. Gross margin analysis showed that, on a full-cost basis, improved varieties were profitable (UGX 130,000 /acre) while local varieties were unprofitable (UGX -530 /acre). On a cash-cost basis the gross margin for improved varieties (UGX 240,402/acre) was three times higher than for local varieties (UGX 9,223 /acre)

Why invest in Research & Development for sorghum and millets? The business case for East and Southern Africa

This article synthesizes recent research by ICRISAT and its partners to analyse the business case for sorghum and millets in ESA and the wider strategy of commercialization on which this is based. The business case is stronger for sorghum because of its greater impact on poverty and food security, but millets are better suited to a strategy of commercialization. Commercial demand for millets is primarily driven by specialty markets for flour while that for sorghum is limited to beer. Demand for improved varieties is driven primarily by the need for early – maturity that shortens the hungry period. Future growth in production depends on increased opportunities for inter-regional trade

Interventions to reduce pesticide exposure from the agricultural sector in Africa: a workshop report

Despite the fact that several cases of unsafe pesticide use among farmers in different parts of Africa have been documented, there is limited evidence regarding which specific interventions are effective in reducing pesticide exposure and associated risks to human health and ecology. The overall goal of the African Pesticide Intervention Project (APsent) study is to better understand ongoing research and public health activities related to interventions in Africa through the implementation of suitable target-specific situations or use contexts. A systematic review of the scientific literature on pesticide intervention studies with a focus on Africa was conducted. This was followed by a qualitative survey among stakeholders involved in pesticide research or management in the African region to learn about barriers to and promoters of successful interventions. The project was concluded with an international workshop in November 2021, where a broad range of topics relevant to occupational and environmental health risks were discussed such as acute poisoning, street pesticides, switching to alternatives, or disposal of empty pesticide containers. Key areas of improvement identified were training on pesticide usage techniques, research on the effectiveness of interventions targeted at exposure reduction and/or behavioral changes, awareness raising, implementation of adequate policies, and enforcement of regulations and processes

Economics of Harvesting and Marketing Selected Indigenous Fruits in Mwingi District, Kenya

Constant droughts especially in the Arid and Semi-Arid Lands (ASAL) have led to recurrent crop failures and livestock losses. Households have therefore resulted to other alternatives which can provide both food and income. Trade in indigenous fruits contributes to livelihoods through income generation and as a safety net for consumption and income smoothing. This paper presents the analysis of economic returns from harvesting and marketing indigenous fruits and the socio economic factors that influence participation in trade of indigenous fruits. The results are based on a survey conducted in Nuu division, Mwingi District, where 120 randomly selected households were interviewed using a pre-tested semi-structured questionnaire. Logistic regression model, Gross Margin Analysis, and Benefit cost ratios were used during the analysis. Data was processed and analyzed using SPSS20. The Gross margins depicted harvesting of indigenous fruits for trade as a profitable venture. High benefit cost ratios of greater than 3.0 were reported in all the three fruits under study. Higher returns to labour and other associated costs were notably reported in the distant market as compared to the local market. The analysis of socioeconomic factors influencing participation in indigenous fruits’ trade identified household size, gender, form of employment and market distance to be significant variables. Respectively, market distance and household size negatively and positively influenced participation in harvesting indigenous fruits for trade. The female headed households and low income earners were more likely to participate in trade of indigenous fruits