Effective Grain Storage Effective Grain Storage in Eastern and Southern Africa:in Eastern and Southern Africa:

Selected Policy IssuesSelected Policy Issues

byby

J. Govereh; T. Tefera & H. De GrooteJ. Govereh; T. Tefera & H. De Groote

OutlineOutline

1. Food security outlook in ESA2. Post harvest losses – the forgotten factor3. Efficacy of alternative storage technologies4. Policy essentials5. Incentives to promote on-farm storage6. Public investments that “crowd-in” private

investment7. Expected outcomes

Food Security Outlook in Food Security Outlook in Eastern and Southern AfricaEastern and Southern Africa

1. Surge in food prices since 20062. Drought in North America

• Continuing price and volume volatility• Developing countries who are net importers

will face financial burden3. Risk of intermittent food shortages

• Inability to adapt to climate change4. With continuing low productivity and growing

demand, long-term structural deficiencies emerging

Transport to market

   

1. Spillage2. Breakage3. Leakage

  

4-10% loss

Overall Cumulative Loss 14-36%

Maize post-harvest losses – a forgotten factor Maize post-harvest losses – a forgotten factor

•PHL is a silent killer as losses do not make headline news•Large grain borer is now an epidemic

Postharvest losses: How big is the problem?

Metal silo SGBs-GrainPro Farmers/Normal bag

Grain storage technologies Grain storage technologies

Benefits of new methods

Metal Silos & Super bags to be Metal Silos & Super bags to be deployed (2012 – 2016)deployed (2012 – 2016)

Countries Yr 1 Yr 2 Yr 3 Yr 4 TOTAL Kenya & Malawi

1000 1800 2800 3120 8720

Zambia & Zimbabwe

300 900 2100 4100 7320

1000 Super bags to be distributed each year in each country for four years

Policy ImperativesPolicy Imperatives

1. Better technology to reduce PH losses necessary but not sufficient to induce greater storage for the market

2. Improved storage and PH handling practices require removing market disincentives

3. It is economic rather than physical losses that matter

4. Successes elsewhere not replicable everywhere

• Cultural sensitivities a factor

Promoting on-farm and Promoting on-farm and trader grain storagetrader grain storage

1. Clear & greater incentives to storage

• Reduce risks on storage investments o Prices marketing boards pay or receive do

not reflect value additiono Export bans, tariff waivers, levies etc., not

transparent and predictable

Intra-seasonal average Intra-seasonal average chronological value of grainchronological value of grain

800

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

January February March April May June July August September October November December

Kw

ach

a p

er k

g

Months

Promoting on-farm and Promoting on-farm and trader grain storagetrader grain storage

1. Clear & greater incentives to storage

• Reduce risks on storage investments o Prices boards pay or receiveo Make export bans, tariff waivers, levies

etc., transparent and predictable

• Reduce initial cost of technology to improve returnso 60% of cost is imported metal sheet

Reducing cost of Metal SilosReducing cost of Metal Silos

1.Tax incentives• Zero rating for VAT purposes grain handling

equipment and technologieso Metal sheets are multi-purpose, difficult to

isolate for tax rebates• Accelerate phasing down of duty on equipment

and raw materials imported outside region

Promoting on-farm and Promoting on-farm and trader grain storagetrader grain storage

1. Clear & greater incentives to storage

• Reduce risks on storage investments o Prices boards pay or receiveo Make export bans, tariff waivers, levies

etc., transparent and predictable

• Reduce cost of technology to improve returnso 60% of cost is imported metal sheet

• Redress imbalance in subsidy expenditureo Storage inputs in subsidy package

Investment in public Investment in public servicesservices

1. Establish a functioning and upgraded quality assurance and regulatory systems • Civic education and human safety

2. Further investments in research and development• New storage technologies, new instruments and

grain quality standards3. Develop local capacity to assess magnitude and

nature of PHL• Baseline data on post harvest losses • Regionally standardized loss assessment

approaches

Outcomes of EGSP -IIOutcomes of EGSP -II

1. Increased uptake of metal silo technology building on lessons learnt in phase 1

2. Alternative and affordable postharvest technology tested and introduced to farmers