Tree crop development potentials in Africa – Towards a more enabling environment
Charly Facheux, Steve Franzel & Honore Tabuna
Tree products: Their importance in Africa
Tree products are of huge importance to African economies. Dominated by coffee, cocoa,
and tea, tree products are exported mainly as raw or semi-processed materials. In 2000,
African tree crop exports stood at almost USD 5 billion. Côte d’Ivoire alone gained some
USD 1.5 billion, and Ghana and Kenya shared USD 640 million. In many countries, tree
crops make up substantial percentages of total agricultural exports: Côte d’Ivoire: 35%,
Ethiopia: 26%, Ghana: 25%, and Kenya: 23%. Uganda’s proportion is 53%, and a sharp drop
in the proportion of households below the poverty level, from 54% in 1992 to 35% in 2000, is
largely attributed to increased earnings from coffee production (World Bank, 2002).
Tree crop farming, formerly reserved for large private or public investors, is today the major
source of living for millions in many African countries. Most farmers operate in
smallholdings, which are limited in size (less than 3 ha) and rely on family labour, and are
quite flexible when faced with managerial constraints. This explains why smallholders
dominate the cocoa, coffee, tea, copra, and natural rubber sectors. For example, there are
700000 cocoa producers in Côte d’Ivoire and 1.6 million in Ghana.
But what is less well-known is the critical importance of other, non-traditional tree crop
products in local and national economies across Africa. For example, shea butter, produced
from nuts of Vitellaria paradoxa (also known as karite) grown from Senegal across the
continent to Uganda and Sudan, is used in chocolate, pharmaceutical, and cosmetic products.
Shea nut production in Africa in 2000 was estimated at 650 000 tons per year (Teklehaimanot
2004), about one-quarter of which was exported, at a value of USD $13 million (FAOSTAT).
The bark of Prunus africana is exported to Europe where an extract from the bark is used for
treating benign prostatic hypertrophy. Exports mainly from Cameroon, Kenya, and
Madagascar, are valued at about USD 220 million per year (Cunningham et al. 2002). Locally
traded tree products are also often of high value. Irvingea gabonensis (‘bush mango’) is
prized for its cotyledons, which are used in sauces, and Dacryodes edulis (‘prune’) is a fruit
which is boiled or roasted. The two are widely traded in the humid lowlands of West Africa;
values of production in Nigeria and Cameroon were estimated at $US 162 million per year for
Irvingia and $US 100 million for Dacryodes (Franzel et al. 2007).
Traditionally, most of the non-traditional tree products were collected from forests but with
increased deforestation and reduced access to forests, more and more farmers are growing tree
products on their farms in agroforestry systems. For example, remote sensing in 64 rural
locations in Uganda revealed that between 1960 and 1995, forested area declined 50%,
agricultural area increased 23%, and the proportion of agricultural land under tree cover (that
is, in agroforestry systems) increased 22% (Place, 2001). Key non-traditional tree crop
products produced in agroforestry systems include timber, fuelwood, charcoal, fruits,
medicines, fodder, resins, nuts, and oils.
The real prices of most of the traditional tree crop products, such as coffee, cocoa, oil palm,
and copra, have stagnated or declined significantly over the past several decades. In contrast,
the future is brighter for most of the non-traditionals, thanks to increasing population,
urbanization, and rising per capita incomes in Africa and the increasing demand for natural
products in the West. Even among the traditional tree crop products there are some promising
developments; for example, many farmers are benefiting from niche coffee, sold in ‘fair trade’
or organic certification programs.
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Tree crops have far greater importance to households and society than their simple values in
production or trade. Trees are assets that farmers can often use as collateral for obtaining
credit, provide a multitude of by products such as fuelwood and medicines, and perform many
environmental functions such as curbing soil erosion, sustaining biodiversity, and
sequestering carbon. Tree crops also help to integrate local economies into wider markets by
providing local, national and world-scale economic chains, incorporating numerous
enterprises of all sizes and leading to a high multiplier effect.
Tree crop enterprise constraints in Africa
This workshop will document essential elements for creating an enabling environment for
agribusinesses. The primary concerns in this section are the constraints specific to tree
enterprises and various ways to overcome them. We focus on the non-traditional tree crop
sector, and niche markets for traditional tree crops, because they have the greatest potential
for generating growth in agro-enterprises.
1. Recognition of non-traditional tree sectors
A main problem affecting markets for non-traditional tree products is that most governments
and other development agents, such as projects and NGOs, simply ignore them. For example,
there is an almost complete lack of information on the marketing of non-traditional tree
products, an absence of statistics on quantities and prices and no data on supply or demand.
This situation is ironic because such information has a higher value to investors in trees than
to investors in annual crops because the costs of investing and divesting in tree crops is
usually higher and involves longer production cycles. The cost of a wrong decision is thus
higher for a tree farmer than a crop farmer, but the tree farmer has to make his decisions with
much less information.
Moreover, tree farmers growing non-traditional tree crops lack access to government services.
Government credit schemes and microfinance institutions bypass most tree enterprises.
Government and NGO extension staff generally know little if anything about tree growing;
forestry staff often have the needed information but are few in number and focus on forests
rather than helping farmers. Non-recognition is not only a problem because the tree sector is
neglected; at times policies formulated for crops actually harm tree enterprises. For example,
in Kenya, the government requires any private entity selling seed to pay a licensing fee of
USD 1,200 per year, to cover the costs of inspection and to limit the number of entities
involved in selling seed. But tree seed is a low value enterprise relative to crop seed (because
a tree needs to be planted once whereas crop seed is purchased each year) so tree seed dealers
cannot pay the required fees. The effect has been to drive the tree seed market underground;
as stockists are not allowed to sell unlicensed tree seed in their shops.
In other cases, policies or the poor implementation of policies, render entire tree-based
industries illegal, such as the charcoal industry in Kenya. Charcoal is the most important fuel
source for urban Kenyans and producing charcoal on farms and transporting it to cities is
technically legal. But producers and traders are unable to transport and trade charcoal because
police assume that it is illegally produced in forests, even when there is documentation
showing otherwise. Similar problems exist in Uganda, where energy policy emphasizes the
development of electricity and petroleum, which account for less than 10% of energy
consumption and ignore woodfuel, which accounts for over 90% of consumption. In both
countries, different ministries are involved in regulating charcoal and the overlap causes
confusion.
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In both the tree seed and the charcoal cases, problems impinging on agribusiness development
can be solved by recognizing the non-traditional tree sector and designing policies for
promoting them. These policy changes are low cost and involve attitude changes more than
additional resources.
In the case of tree seed, an association of tree seed growers (Kenya Tree Seed and Nursery
Operators) has been formed and has achieved government recognition. In the case of
charcoal, policies in Sudan demonstrate that an enabling environment can be established to
effectively regulate and promote the charcoal sector. A single entity, the Forest National
Corporation, plans and regulates the industry, avoiding the confusion of multiple supervisors
in Kenya and Uganda. The Sudanese government obtains substantial revenue from taxing
market participants, whereas in Kenya, the government is unable to tax because of the illegal
status of the commodity. Policies in Sudan recognize private sector organizations and trade
associations and provide assistance to them (Russell and Franzel, 2004).
2. Appropriate tree tenure policies
Tree protection policies, which prohibit cutting trees or transporting tree products, are
common across Africa and often date from the colonial era. Ironically, such policies have the
unintended consequence of discouraging tree planting as farmers are not allowed to cut and
harvest the trees when they want. Such policies also inhibit the development of linkages
between farmers and agribusinesses and open doors for corrupt practices in the granting of
licenses to allow farmers to cut down their own trees or transport tree products.
Examples abound of the perverse effect of policies intended to protect trees on farms. In
Cameroon, laws in the mid-1990s permitted farmers to cut down trees that they had planted
but it was not clear how a farmer could prove that s/he had planted a given tree (Cunningham
et al., 2002). In Rwanda, a 2005 regulation banned farmers from cutting down immature trees
but the regulation has not been put in writing so it is open to widespread misinterpretation.
Some local officials interpret the law as a ban on the cutting of all trees. The term ‘immature’
has not been precisely defined so its interpretation is up to the whims of local officials.
Finally, farmers are prevented from harvesting poles, which are needed for construction of
houses, cow sheds, granaries and trellises for vine crops such as passion fruit. In Kenya,
Anyonge et al. (2002) reported that the cost in time and money to get a permit to cut down a
tree was often higher than the value of the felled tree.
Two key themes emerge as lessons from the above examples. First, farmers need to be able to
cut down trees when needed; allowing farmers to manage trees as they see fit is the best
incentive for them to plant trees. Second, poorly specified regulations, e.g., banning the
cutting of immature trees, or allowing farmers to cut down only those trees they can prove
they have planted, open doors for corrupt practices which also act as disincentives for further
planting.
3. Maintaining Price Stability and Reducing Risk.
Price volatility is a common feature of many traded commodities but it is especially a
problem in tree crops, because of their low supply elasticity, that is, the ability to reduce or
increase production in response to price changes. Since tree crops have long production cycles
it is not easy to increase or reduce production in any given year in response to price changes
as annual crop producers can do, by changing the area cultivated. Moreover, many tree
products such as fruits are perishable and cannot be stored, contributing to supply gluts and
even more price volatility.
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There are no easy solutions to the problems of price instability and risk. First, improved
market information can help NGOs and government services make better decisions about
whether or not to promote tree crops and can help farmers make better decisions about which
ones to grow. The most important information is on the sensitivity of prices to changes in
supply, so as to be able to assess how much supplies can increase before prices drop.
Information on demand trends and substitutes are also important.
Supply management arrangements have increasingly fallen out of favour, both at the national
and international level (Potts, 2007). The most common instruments involved national buffer
funds and marketing boards. Their main weaknesses were high implementation costs, their
preoccupation with macroeconomic targets while ignoring individual farmers’ supply
decisions, and their preoccupation with prices, while neglecting other types of risks. Supply
management measures are out of the question for non-traditionals, which are of relatively
little importance to national economies and which have fewer stakeholders than the traditional
tree crops.
Recently, sustainability standards have emerged as an important new means for reviving
traditional tree product enterprises or starting non-traditional products. These standards
involve eco-certification (e.g., ‘organic’), certifying that production protects the environment,
social certification (e.g., ‘Fair Trade’), certifying that production provides social benefits, or
appellation, certifying that products come from a specific location. While such standards do
not necessarily affect price volatility (‘Fair Trade’ does reduce volatility through a price
minimum), they often improve incomes and enhance the stability of incomes (Potts, 2007).
But the costs of obtaining certification and monitoring certification are often high, as in the
case of ‘organic’ certification, and benefits often accrue to farmers who are already well-off.
4. Accompanying Agroforestry Training with Business Training
Because tree enterprises have so many environmental benefits, they are often introduced by
governments and NGOs for the purpose of providing such benefits, be they soil erosion
control, natural resources management, carbon sequestration, or simply greening the
environment. Explicitly or implicitly, farmers are assumed to share the same values as those
introducing the tree enterprises. Farmers often go along temporarily with such schemes in the
hopes of gaining favour with project implementers and securing other project benefits. But
they eventually lose interest, unless the trees provide tangible benefits.
In fact, there is growing realization that farmers will not adopt practices unless it is in their
economic interests to do so. It is critical to accompany agroforestry training with business
training so that farmers can assess which products they should produce, what the potential
market will be for their produce, and what the profitability will be.
While the four elements mentioned above are key drivers for successful tree agribusinesses,
they are by no means sufficient. More generic drivers such as technological improvements,
farmer group dynamics, credit mechanisms, and linkages between traders and farmers are
critical for the development of successful agribusinesses, as demonstrated in the case study
that follows.
Enhancing tree product market chains for kola nuts (Cola spp) and Njansang
(Ricinodendron heudelotii) to improve household incomes
Farmers in most developing countries still find it difficult to take full advantage of the
existing and potential national, regional and international market for lesser-known tree
products. The seasonality of these products, poor road infrastructure, limited knowledge of
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markets, inadequate networking as well as processing and storage methods contribute to the
low incomes obtained from the sale of tree products. Research in the humid tropical forest
region of West and Central Africa is demonstrating that empowerment of farmer households
to market agroforestry tree products (AFTPs) as a group can help individual farmers to
overcome these constraints.
fed
Through the ‘Farmer Enterprise Development’ (FED) initiative, ICRAF scientists and
partners (CIFOR, two NGOs, SAILD and FONJAK, and two farmer groups) have been
working closely with Cameroonian farmers since 2003, to evaluate an innovative approach for
helping them acquire market knowledge and develop marketing skills to match the increasing
on-farm production that is made possible through participatory tree domestication. The
approach builds on a model that incorporates the following steps:
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Market survey to identify existing markets and channels, marketing problems,
specifications and opportunities, and traders willing to work with farmer communities
Group Dynamics to identify new groups interested in the target products or to
develop this interest.
Workshop and Training to improve farmers' fruit trees/timber trees/annual crop
production, and post harvest and marketing skills. The training modules developed
here include: group dynamics, leadership skills, conflict management, and basic
financial management in a farmer organisation; plus tree domestication techniques,
basic marketing principles and development of marketing strategies
Building linkages between farmers and traders: These linkages are a prerequisite
for the building of common business values such as honesty, fairness, verbal but
binding contracts, etc.
Improve harvest and post-harvest techniques: Departing from local knowledge to
research, appropriate technologies were developed and tested to improve product
processing, quality, harvesting, storage and packaging.
Guarantee Funds: Necessary financial backup was provided for farmers who want to
delay their sales for peak price seasons
This model has been tested with two farmer groups: The Mixed Farming Common Initiative
Group (MIFACIG) in Belo, Northwest Province of Cameroon and the ‘Association de
Development des Exploitants Agricole du Centre’ (ADEAC) based in Akonolinga Centre
province Cameroon. Through the FED initiative, both groups have been empowered to
develop viable market options for kola nuts (Cola spp.) (Facheux et al. 2006) and njansang
(Ricinodendron heudelotii), two high value tree products that are common in the humid
tropics of West and Central Africa. As a result, incomes from sales of the two products
surpassed the 10% target increase that was predicted by the second year of the initiative. For
njansang, farmers received approximately some US$5,652 from the sale of 3,000 kg in 2006,
which is up from the estimated US$1,420 from the sale of 833 kg in 2005. Furthermore,
njansang farmers increased their selling price by an average of 31%, thanks to negotiation
skills they acquired during their training sessions.
In general, the Group Marketing Approach has also resulted in other visible impacts in the
communities, including better use of available forest resources with possibility of increasing
managed stocks on-farms through tree domestication practices; additional and alternative
source of income especially to women and girls; and increased capacity of producers that can
also be transferred to other crops sub sectors to increase and stabilise incomes.
The principles embodied in the Group Marketing Approach enable farmer groups to pull
together their harvests and sell collectively thus reducing the transaction costs, and increasing
the benefit margin. ICRAF scientists are now documenting the circumstances under which
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such group approaches work, so that they can be replicated and validated in other areas. In
this regard, two new communities have been identified in the South and Central provinces of
Cameroon to evaluate the approach with two additional high value agroforestry products:
Gnetum Spp and Irvingia spp respectively.
ICRAF recognizes that enhancement of tree product market chains through agroforestry
research for development offers a critical pathway for achieving sustainable use of
biodiversity in the humid forest margins. As a result, the Centre will increasingly target high
value trees that can be effectively utilized on-farm as assets for smallholder farmers, and serve
as a direct source of income through marketing of products. Such trees could also be sources
of indirect income from climate change mitigation through smallholder carbon sequestration
investments, as well as foster sustainable land use to reduce forest loss in the humid tropics.
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