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Country comparison of efficiencies and profitability in the HQCF value chain Helena Posthumus, Kola Adebayo, Francis Alacho, Nanam Dziedzoave, Grace Mahende,

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Presentation on theme: "Country comparison of efficiencies and profitability in the HQCF value chain Helena Posthumus, Kola Adebayo, Francis Alacho, Nanam Dziedzoave, Grace Mahende,"— Presentation transcript:

1 Country comparison of efficiencies and profitability in the HQCF value chain Helena Posthumus, Kola Adebayo, Francis Alacho, Nanam Dziedzoave, Grace Mahende, Vito Sandifolo, Lateef Sanni, Andrew Sergeant, Andrew Westby Partners: Funded by the Bill and Melinda Gates Foundation

2 C:AVA project

3 HQCF value chain Fresh cassava roots Cultivating & harvesting Peeling & washing Grating & pressing End use Milling & sieving & packing HQCF Value chain Drying Cassava fresh roots Cassava wet mash / cake Cassava dried grits High Quality Cassava Flour

4 Objectives The objectives of the exercise were: – to allow comparison of production costs between countries; – to identify areas for improvement of efficiency and profitability; – to inform price negotiation; – to provide information for M&E purposes (e.g. return per beneficiary)

5 Methodology Based on typical costs of current practices and yields by country Assume use of sun drying or upgraded flash dryers Typical wage for unskilled labour used for labour costs: $1 to $4 per day (opportunity cost of labour) Regular monitoring of prices (incl wheat flour) Disclaimer: these are indicative figures!

6 HQCF value chain Fresh cassava roots Cultivating & harvesting Peeling & washing Grating & pressing End use Milling & sieving & packing HQCF Value addition: production costs + profit margins Value chain Drying Production costs of roots (FCR) Price of roots Profit margin farmer Processing costs Diesel costs for drying Other drying costs Fixed costs Price of HQCF Profit margin processor (transport costs)

7 Costs and profit margins Nigeria Improvement flash driers

8 Costs and profit margins Ghana

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10 Costs and profit margins Malawi

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12 Costs and profit margins Tanzania

13 Costs and profit margins Uganda

14 Lessons learned Various (market) drivers influence prices offered for HQCF – different in each country – Price of alternative raw materials (wheat flour, corn starch, local cassava flour) for targeted end use of HQCF determines HQCF price Policies (import tariffs, tax, subsidies) Foreign Exchange Landlocked country vs sea port – Price of alternative cassava products (at local markets) determines price of cassava roots – Technology ↔ scale ↔ productivity ↔ efficiency ↔ profitability Importance of profit margins across value chain Need to create consistent and constant supply of raw material (fresh cassava roots): – By improving productivity of cassava – Through contracts and price agreements – By involving large-scale commercial growers, linked with smallholders (‘outgrower scheme’)

15 Thank you

16 Costs and profit margins Uganda

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