Cassava Master Plan

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NIGERIA

Cassava Master PlanA 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 nMarch 20 06. 2 Ma rch 20 06. 2 a 20 6

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

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 3 Ma rch 20 06. 3 a 20 6

Executive Summary Outline of the Master Plan Chapter 1: The World Cassava Outlook1.1. The Value Chain Approach 1.2. Dynamic Changes in the Global Cassava Value Chain 1.3. Outlook of Cassava Products in the Global Market1.3.1 Global Production and Trade1.3.1.1. Global Production 1.3.1.2. Global Trade in Cassava 1.3.1.3. International Prices for Cassava Products

8

10

12 12 15 181818 19 21

1.4. The Global Market Trend1.4.1 1.4.2. Predictions and Demands in the Present Decade for the Cassava Sector Cassava Imports

2122 25

1.5. Processing Technologies

26

Chapter 2: The Nigerian Cassava Production System2.1. The Nigerian Cassava Belt-Potential 2.2. The Concept of a System Approach 2.3. Vision - Strategies2.3.1 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 Industry2.3.2.1. Inputs and Resources

29 30 31 3333 3535

38

2.4. The Nigerian Cassava Industry

4243 43 44 4545 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 Context2.5.1. 2.5.2. World Market Regional Market

5050 53

2.6. Economic Outputs

54

Chapter 3: A SWOT Analysis of the Nigerian Cassava Industry3.1. Analyzing the Cassava Industry as a Problem Tree 3.2. The SWOT Analysis (Within the Value Chain)3.2.1. Strengths

56 56 5858

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 4 Ma rch 20 06. 4 a 20 6

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

6262 62 63 64 64

Chapter 4: Benchmarking the Nigeria Cassava4.1. What is Benchmarking

System

66 66

4.2. Benchmarking of the Nigerian Cassava Chain Against Competing Countries 664.2.1. 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 Industry75 5.1. Actions5.1.1 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

7777 77 7780

5.1.3.1. Clusters Disputes Settlement Business Associations

80 80 80

Chapter 6: ROAD MAP6.1. Proposed industrial development by Region

81 89

6.2. The Strategic Development of each Cassava Sub Sector in the Short, Middle and Long Terms 906.2.1. 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 Plants98

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 5 Ma rch 20 06. 5 a 20 6

Graphical RepresentationsTables1.1 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

Figures1. 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.

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 6 Ma rch 20 06. 6 a 20 6

Diagrams1. 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

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 7 Ma rch 20 06. 7 a 20 6

Glossary and AcronymsEU 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

Niigeriian Cassava Ma ster Pllan Nig erian Cassava Ma s ter P a n N g r n ass v a rP nMarch 20 06. 8 Ma rch 20 06. 8 a 20 6

Executive SummaryNigeria 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