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Value Addition and Post-harvest Processing in East Africa over the Past Fifty Years and Prospects for the Future

Geoffrey C. Mrema1 & Jean Ndikumana2

1Sokoine University of Agriculture, Morogoro, Tanzania

2ASARECA Entebbe, Uganda

ABSTRACT

This paper reviews the status of post –harvest processing and value addition in the agricultural sector of the five East African Community [EAC] countries [Burundi; Kenya; Rwanda; Tanzania and Uganda] as it has evolved over the past fifty years [1963 to 2013]and its prospects for the future. The foundation for the post -harvest processing and value addition in the agricultural sector was laid during the post 2

nd world war years

with the emergence of a dual agricultural sector dominated by large scale European settler farmers and small scale progressive farmers who were producing cash crops for the export market. In Kenya Colony the African farmers were not allowed to engage in commercial agricultural production and this was confined to European farmers who were growing cash crops such as coffee; tea; pyrethrum, dairy and beef. These European farmers set up institutions to support post-harvest processing; marketing and value addition of their produce in the 1940s and 50s. In Tanzania and Uganda which were not British Colonies but Trust Territory and Protectorate respectively, African farmers were allowed to cultivate cash crops such as coffee and cotton and they did establish successful cooperative unions from the 1930s which handled the post-harvest processing and marketing of their produce. The situation in Rwanda and Burundi which were administered by Belgium as Trust territories was closer to what pertained in Kenya.

Following the Mau Mau War in Kenya from 1948 to 54 the British Colonial Authorities launched a major

agricultural development initiative which laid the foundation of Kenya’s post -independence agricultural prosperity. This initiative known as the Swynnerton Plan was implemented between 1954to 1963 and was the largest small holder development programme ever implemented by the Colonial Authorities in Africa. It was anchored on intensification of agricultural production in the Central and Rift Valley Provinces coupled with the establishment of an effective and efficient post-harvest processing and marketing infrastructure. This infrastructure included both physical infrastructures such as rural roads, markets; warehouses and processing factories as well as institutional infrastructure such as the Small-holder Crop Development Authority [SCDA]. The SCDA evolved into the Kenya Tea Development Authority [KTDA] which was regarded in the 1960s as the most successful integrated institutional innovation for agricultural development. The KTDA together with similar organizations for Coffee; Dairy [KCC] and beef [KMC] and in combination with parallel institutions established to handle produce from the large scale farmers as well as provide supporting services to both groups of farmers such as in research; quality control etc. led to central Kenya emerging in the 1960s and 70s as the most important agro-processing and value adding hub in the Eastern African Region.

The successful native cooperatives in Uganda and Tanzania continued to thrive in the 1960s and up to

1970s when they were abolished to pave way for the establishment of Commodity Development Authorities [CDAs] modelled on the KTDA in Kenya. Thus CDAs for Cotton; Coffee; Tea; Dairy; Livestock, Sisal; Pyrethrum, Tobacco were established to handle in put supply as well as output marketing and processing. These CDAs which were Government controlled and managed by civil servants did not work that well and this led to a decline in agricultural marketing and post -harvest processing activities. Similarly in Kenya political interference in the running of the KTDA, KCC and similar organizations in the late 1970s and 80s led to their decline and this resulted in the decline of the agro-processing and value addition hub which had been created in central Kenya.

During the 1990s due to, among other reasons, globalization all countries in the region liberalized their

economies. This led to many of the marketing and value adding activities of the CDAs being privatized. In some cases small holder farmers established their own farmers organizations and/or cooperatives [e.g. in Tea in Kenya; and Tanzania] to handle the post-harvest processing and value adding activities. In other sectors very strong local private companies have emerged e.g. Brookside and New KCC in Kenya which handled respectively

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31 and 39% of the five billion litres of milk processed through the formal dairy sector in Kenya in 2011. Other sectors which have emerged include fish processing from Lake Victoria where the 34 factories on its shores were established during the 1990s and handled up to $350million of exports [12each in Tanzania and Uganda and 10 in Kenya]; Tobacco processing in Tanzania and North Uganda; horticultural exports from Kenya [now a $1billion export industry] and also gaining ground in Rwanda; Uganda and Tanzania.

Since 2000 the Value Chains [VCs] approach has gained prominence amongst most agricultural

development professionals. The VCs concept was first developed in the manufacturing industry in the USA in mid 1980s as an instrument for identifying the value of each step in the production process. Tools used to link the different players in agricultural value chains include, among others, contract farming [CF] and the warehouse receipt system [WRS]. However, use of these tools is fraught with many problems especially in the small holder sector in SSA. These problems include a weak institutional framework for their use including a legal system for the commercial sector which is expensive. As Rubens (2007) has noted the VC approach works best in the ‘C’ system which essentially is an export chain which is more integrated and with fewer actors as well as clear rules for engagement and operations. The region has so far done quite well with these ‘C’VCs being large exporters of tea; horticulture; coffee; tobacco; cashew nuts etc.

The ‘B’ system VC which can be characterized as the local middle to high income chain concentrating

largely on local and regional supermarkets with small/medium sized producers and cooperatives were being the main suppliers. The ‘A’ system is the local low-income chain where small producers supply local markets at the town/municipal levels. These ‘A’ chains have many intermediaries (traders), are relatively long, have limited market information and they deliver the largest share of the volume of agricultural production like roots and tubers; cereals and legumes; meat etc. With all countries in the region urbanizing very rapidly – all countries in the region will have more than 50% of their population living in urban areas over the next two decades - it is the ‘A’ and ‘B’ systems VCs which are going to handle the bulk of the agricultural produce and these need to be supported not only in terms of physical infrastructure but also the institutional framework for agro processing and value addition. Lessons from the A system may prove useful in this regard.

With changing food habits due to urbanization and increasing incomes as well as food safety concerns

there will be more trade in the region especially for the perishables like fruits and vegetables; meat and other livestock products as well as for roots and tubers. This will require the setting up of value chains cutting across the region to exploit seasonal variations. These VCs will be greatly facilitated by improved road and transportation networks as well as the telecommunication and business and financial linkages. New areas will emerge as main suppliers of food to the larger metropolis such as Kampala; Nairobi, Dar es Salaam, Kigali and Bujumbura as well as emerging one million plus cities such as Mwanza; Mombasa; Arusha; Dodoma, Mbeya and Mtwara. Those who perfect the supply logistics as well as the handling, packaging and storage of agricultural produce are likely to emerge as the winners over the coming three to four decades.

Introduction

Agricultural development in Africa has largely been dominated by on farm production issues. This is the case whether one is considering input supply including fertilizers, seeds, mechanization etc. for both livestock and crop production. Indeed the first integrated book on agricultural processing for development was only published in 1988 [Abbott, 1988] thus demonstrating the newness of the topic. This is not surprising as the agricultural development paradigm in the 1950s and 60s in the Eastern Africa region was on improving household food self-sufficiency especially for the over 85% of the population then living in rural areas as peasant subsistence farmers [PSFs]. The food requirements for the 10 – 15% urban dwellers was largely met through the efforts of the Large Scale Farmers [LSFs] who were mostly Europeans who had settled in the region since the turn of the 20th century.

At independence therefore in early 1960s all the five EAC countries inherited a dual agricultural

sector with a relatively efficient large scale commercial farming sub sector dominated by settlers and a rather basic traditional sector dominated by peasant farmers largely producing for their own subsistence. The commercial sector developed linkages with the markets either in the urban areas of the region for food crops [maize, legumes and livestock products] or the global market for the cash

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crops [coffee, tea, sisal, tobacco, and pyrethrum]. All the cash crops had to undergo primary processing in the region before they could be exported. The LSFs did the primary processing either on their own farms/ estates where this was feasible [for sisal; Arabica coffee, tobacco etc.] or they established agro-industries to process their produce through their own cooperatives [milk – KCC, coffee curing etc.] or through companies established for this purpose [Unga Limited for grain milling; East Africa Tobacco for tobacco processing etc.] .

The traditional sector comprised of two sub sectors – the peasant subsistence farmers [PSFs]

and the small-scale commercial farmers [SCFs]. The PSFs produced mostly for their own subsistence selling only a very small fraction of their output to meet social and fiscal obligations [head and/or poll tax]. Because of their colonial status Tanzania Mainland [ being a UN Trust Territory] as well as Zanzibar and Uganda [both being Protectorates] there emerged in these three colonies in the 1930s to 50s a cadre of native SCFs who were producing cash crops such as coffee & tea for both the national/regional and global markets. These native SCFs were initially served by Asian and/or European Trading Companies and did subsequently establish their own marketing cooperatives which also did some post-harvest processing.

The situation in Kenya which was a colony different and the PSFs were not allowed prior 1955 to

engage in the production of cash crops for, among other reasons, controlling the spread of crop pests and diseases. This was particularly the case in the Eastern, Central and Rift Valley Provinces of Kenya where a majority of the European settler farmers had settled [Heyer, 1981; Thurston, 1984]. It was only after the Mau Mau war [1952 to 58] and through the Swynnerton Plan that the newly settled SCFs were allowed to grow cash crops as one of the war strategies of the British colonial authorities. While Rwanda and Burundi were UN Trust Territories administered by Belgium as mainland Tanzania – they were nevertheless administered as extension of the Belgian Congo which was an absolute colony.

The situation of the five countries during the last two decades of colonial rule from 1940s and

50s did largely influence the types of agro-processing ventures and industries which emerged during the first two decades of independence. This foundation has continued to influence policies and strategies for agro-industries and value addition up to the beginning of the 21st century in all the five countries. The objective of this paper is to provide a review of how agricultural processing and value addition have evolved in the EAC region over the past fifty years drawing lessons from this evolution from institutional and organizational as well as technological perspectives. We shall then attempt to use these lessons to inform the process of coming up with a long term development framework for agro-processing and value addition in the region. The remainder of the paper is divided into five sections:

The next section will review the status of agricultural processing and value addition at independence in the early 1960s in the five countries

This will be followed by a section on the evolution of agricultural processing in the last four decades of the 20th century – 1960s to 1990s.

A section on conceptual issues and challenges to agricultural processing and value addition in the region in the 21st century will follow.

This will be followed by a section on the future prospects and a framework on agricultural processing and value addition development in the region

A concluding section rounding up the key issues will then follow.

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Setting the scene: Agricultural processing at independence in the 1960s: As already indicated above, at independence in early 1960s, there were three main types of

farmers in the PSFs, SCFs and LSFs. Emerging out of growth of SCFs or through sub division of LCFs following independence and acquisition of European settler farms were Middle Scale Farmers [MCFs]. The MCFs were farmers who had farms of10 to 100 ha and who were regarded as the pioneering or yeoman farmers [de Wilde, 1967). The three main groups PSFs, SCFs and LSFs each had their own post-harvest system with the MSFs falling either to the SCFs system or the LSFs system depending on their farm size and types of crops being cultivated and/or livestock being raised.

Post-harvest and Value Addition Systems for the PSFs in the 1950s & 60s

The Peasant Subsistence Farmers [PSFs] were and remain up to today subsistence farmers who produced largely for their own livelihood with little or no surplus to sell. Whatever surplus realized was exchanged for other products or sold in the village market to obtain money for fiscal [poll or head tax] or for basic social needs [medicines, clothes etc.]. Most of the produced food was consumed on the farm with little post –harvest processing or if there was any processing then family labour was used to achieve this – shelling, threshing, milling by use of pestle and mortar and/or stone grinding. Surplus grain and legumes was stored on the farm using traditional storage structures. The introduction of hammer mills beginning from late 1950s from India and/or South Africa in some villages was perhaps the first exposure of the PSFs to modern processing industry.

These hammer mills which were driven by diesel engines [often the UK manufactured Lister

engine] and were owned by either Asian traders or retired African civil servants and soldiers demobilized from military service who milled the grain for a fee. These were indeed the first small and medium enterprises [SMEs] which were established in many rural areas of the East African countries. Some of the owners of these SMES had also other businesses like transportation with 1-3 tons pick-up trucks, retail shops etc. It is also some of these owners who took up the cultivation of cash crops in some villages and became the small-scale commercial farmers [SCFs]. Where livestock was kept this was largely for traditional and social purposes and the livestock products were mostly consumed on the farm with little or no processing or preservation measures.

Post-harvest Systems and Value Addition for the SCFs in the 1950s & 60s

The small–scale commercial farmers [SCFs] emerged from the 1930s especially in Uganda and Tanzania when a number of Africans began commercial production of some commodities for the market. These included the more progressive PSFs or demobilized soldiers and retired public servants who often settled near the emerging small townships and settlements. Initially food crops were cultivated for selling in the emerging towns but this evolved also into the growing of cash crops such as coffee, cotton and tobacco for export. The growing of cash crops occurred in areas which were well connected with infrastructure [railway and road network – Buganda in Uganda, Zanzibar, Kilimanjaro & Mwanza in Tanzania] and in some cases in areas where white commercial farmers were already growing the cash crop – where the colonial authorities allowed this [in Tanzania mainland and Uganda.

There emerged in the 1930s through to the 1950s perhaps the strongest cooperative movements in Africa which handled the post-harvest processing and marketing of the cash crops produced by these SCFs. Notable amongst these were the Kilimanjaro Native Cooperative Union [KNCU] which by 1945 was exporting coffee worth about US$1million then] and the Victoria Federation Cooperative Union[VFCU] in Mwanza, Tanzania which was reckoned to be the largest cooperative union in Africa by 1960 which focused on cotton grown by the SCFs. The KNCU had extensive post-harvest processing for coffee and it owned jointly with the Tanzania Coffee Planters Association [representing large scale farmers [LSFs]] the main coffee curing plant in East Africa and in Moshi Tanzania. Likewise the VFCU owned a large number of cotton ginneries and cotton buying stations throughout the lake province of Tanzania – the VFCU accounted for over a third of the

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400,000 bales of cotton produced in Tanzania annually in the early 1960s. [EAAJ (1946); Swynnerton (1946; 1949); de Wide (1967); Illife (1971)].

The situation in Uganda was also similar to mainland Tanzania where SCFs emerged and took the lead in the cultivation of coffee and cotton. These were supported by primary cooperatives for marketing in particular of coffee while Asian traders were more involved in the cotton post-harvest sector although they were encouraged by the independent Government to sell their ginneries to local cooperatives once these were formed in 1950s and early 1960s. It also in Uganda where private entrepreneurs established one of the largest integrated textile mills in East Africa in the early 1960s – the Nyanza Textiles in Jinja owned by the Madhvani Group thus moving more downstream in the value addition chain [de Wide 1967; Abbott, 1988]. The VFCU in Tanzania did, in the late 1960s and early 1970s also move more downstream by establishing textile mills in Mwanza as well as rice mills; oilseed processing factories and sisal factories.

It was in Kenya however where the situation was quite different – especially in the fertile Central and Rift Valley provinces where large tracts of land had been acquired by European settler farmers- from the 1920s. These settler farmers established exclusive zones and were involved in large scale farming of both food crops [maize; wheat, legumes as well as livestock production] and cash crops [coffee; tea and pyrethrum]. African farmers were prohibited from growing these cash crops – as a pest and disease control measure - and this led to quite some resentment which contributed to many of them supporting the Mau Mau War against the colonial administration. While the best parts of the fertile Kenya highlands had been taken over and given to white settler farmers the native Africans were pushed to the poorer parts which were infertile and prone to severe erosion. The situation was exacerbated by the restrictions of not being allowed to grow cash crops.

With the Mau Mau war on, the Colonial Authorities had to come up with strategies to win over to their side the African population. The Department of Agriculture of the Colonial Government came up with the Swynnerton Plan [SP] which was implemented during the period 1954 and 1959, under the overall leadership of Sir Roger Swynnerton who was then the Director of Agriculture. The SP was the largest programme of intensification of small holder agriculture ever attempted by the Colonial Authorities in Africa and perhaps remains the largest agricultural intensification programme ever implemented up to now [See Box 1 for the main features of the Swynnerton Plan]. A poignant point in this respect is the fact that the architect of the SP was Sir Roger Swynnerton whose experience was largely drawn from working in the 1940s in the Department of Agriculture in neighbouring Tanganyika – now Tanzania Mainland – where he was involved with development of cash crop production by SCFs as already described above [Swynnerton 1946, 1949; 1954].

The Swynnerton Plan was anchored on intensification of agricultural production in the Central and Rift Valley Provinces coupled with the establishment of an effective and efficient post-harvest processing and marketing infrastructure. This infrastructure included both the physical infrastructure such as rural roads, markets, warehouses and processing factories as well as institutional infrastructure such as the Small-holder Crop Development Authority [SCDA]. The SCDA evolved into the Kenya Tea Development Authority [KTDA] in 1963 which was regarded in the 1960s and 70s as the most successful integrated institutional innovation for agricultural development. The KTDA together with similar organizations for Coffee; Dairy [KCC] and beef [KMC] and in combination with parallel institutions established to handle produce from the large scale farmers as well as providing supporting services to both groups of farmers such as in research; quality control etc. led to central Kenya emerging in the 1960s and 70s as the most important agro-processing and value adding hub in the Eastern African Region [see Box 2].

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Box 1: The intensification of small holder agriculture in Kenya – the Swynnerton Plan 1954-62: As part of their war strategy during the Mau Mau War in Kenya [1948 to 54], the British Colonial Authorities launched a major

agricultural development initiative which laid the foundation of Kenya’s post -independence agricultural prosperity. This initiative known as the Swynnerton Plan was implemented during the period 1954 to 1962 and was the largest small holder development programme ever implemented by the Colonial Authorities in Africa. It was anchored on intensification of agricultural production in the Central and Rift Valley Provinces coupled with the establishment of an effective and efficient post-harvest processing and marketing infrastructure.

The intensification programme included a comprehensive land tenure reform initiative through consolidation of fragmented land holdings in the native reserves, issuance of freehold title deeds for farms of 8 to 15 acres per family (which was regarded then as being able to provide adequate food and surplus income to an average family of 6-12); large scale introduction of cash crops [coffee; tea; pyrethrum etc.] and monitored upgrading of dairy cattle all with processing and marketing schemes including the supporting infrastructure. The infrastructure included both physical infrastructure such as rural roads, water supply including for irrigation where necessary, markets; warehouses and processing factories as well as institutional infrastructure such as the Small-holder Crop Development Authority [SCDA] and primary cooperative societies.

The British Colonial Authorities had allocated Stg pounds7.15 million to implement the Swynnerton Plan and at the end of the Plan period in 1962 hundreds of thou=sands of small holder farmers had been allocated free hold land; production of cash crops and dairy was increasing very fast in the central province of Kenya, rural infrastructure had been greatly improved and there was a robust institutional infrastructure for both on-farm production and for the post-harvest system at the local level and nationally. When Kenya attained independence in 1963 this institutional infrastructure came in handy in implementing programmes to resettle small holder farmers on land acquired from the settler farmers who were leaving.

The initiative was superintended by Roger Swynnerton [later on knighted] who was specially transferred to Kenya in January 1951 from Tanganyika where he had excelled in planning and implementing small-holder cash crop [cotton and coffee] development programs. He was involved in the design of the Sukumaland scheme which was one of the more successful cotton development programme in Africa [see Box 3 on VFCU] as well as the smallholder coffee programme in the Kilimanjaro [Swynnerton (1946, 1949,1954); Thurston (1954)]. He became the Director of Agriculture in Kenya in 1956 to 62 and advisor to SCDA and Commonwealth Development Corporation [CDC] [which was the implementing agency for SCDA] thereafter.

The SCDA evolved into the Kenya Tea Development Authority [KTDA] which was regarded in the 1960s as the most successful integrated institutional innovation for agricultural development. The KTDA together with similar organizations for Coffee; Dairy [KCC] and beef [KMC] and in combination with parallel institutions established to handle produce from the large scale farmers as well as provide supporting services to both groups of farmers such as in research; quality control etc. led to central Kenya emerging in the 1960s and 70s as the most important agro-processing and value adding hub in the Eastern African Region.

Box 2: Evolution of CDAs and CMBs and their role in Post-harvest Processing and Value Addition

The Smallholder Crop Development Authority [SCDA] was the first integrated Commodity Development Authority [CDA] established in 1958 as part of the Swynnerton Plan [see Box 1 above] by the Colonial Authorities in Kenya and was instrumental for the entry of small holder African farmers in cash crop farming. SCDA became the Kenya Tea Development Authority [KTDA] in 1963 when Kenya attained her independence. KTDA and its successor [Kenya Tea Development Agency from 1990s] was and has remained an integrated agricultural development organization responsible for handling the entire value chain for tea cultivated by small holder farmers from the tea bushes to the tea cup of the consumer. It supplied inputs to the tea farmers, provided extension advice as well as build ing of rural roads linking their villages to its own tea factories.

As tea leaves have to be processed immediately after being picked , the KTDA set a very effective logistical system which was able to efficiently handle the post-harvest processing of the fresh tea leaves from the farm to the tea auction floor with

minimum losses. The KTDA<http://www.ktdateas.com>together with the Kenya Tea Growers Association [KTGA] {which has been [and still is] responsible for coord inating tea production by the large scale farmers} have been responsible for the success of tea production in Kenya with the country being the largest tea exporter in the World in 2012. The activities of KTDA and

KTGA are superintended by the Tea Board of Kenya[TBK]<http://www.teaboard.or.ke> established as one of the Commodity Marketing Boards[CMBs] by the Government of Kenya in 1950 as a statutory board to regulate the tea industry in all aspects from tea growing, research, manufacture, trade and promotion in Kenya and overseas. Other statutory Boards include those for Coffee, Sugar; Pyrethrum etc.

The KTDA was so successful in managing the entry of small holder farmers in to production of a new crop and from an organizational and institutional perspectives, it was regarded as a role model to be emulated in other crops and other countries in Africa. Thus Commodity Development Authorities [CDAs] were established as autonomous bodies to handle, in an integrated manner, the production by small holder farmers of several commodities . They were involved in many activities: from input supply through the provision of extension services to marketing and post-harvest handling, processing and export of the produce. Governments in the SSA region, with the support of major bilateral and multi-lateral donors, d id establish in the 1970s quite a number of these CDAs for the various key commodities [e.g. in Kenya, Tanzania and Uganda CDAs were established for nearly all key commodities - cashew, coffee, cotton, horticulture, sisal, pyrethrum, livestock, tobacco etc.]

The CDAs together with the farmers’ cooperatives of the 1950s/ 60s may be regarded as the first institutions in SSA to have been established on the value chain model. They have been quite successful in coord inating and integrating smallholder agricultural production for cash crops especially where Governments have promulgated and implemented the right enabling policies and regulations as well as established the other support/ service institutions [CMBs, R&D organizations etc.]. In the export horticulture sector the CMDs have been quite successful such as in Kenya and Tanzania.

The Kenya Creameries Cooperative [KCC] was, though a cooperative from its inception in 1950 by large scale farmers was instrumental to the entry of hundreds of thousand s of small scale farmers into the dairy industry. KCC was able to service the small scale farmers and process the milk both for local consumption and for export. However, in the 1980s due to what some have called administrative and political interference, KCC collapsed and its role in the dairy chain was taken over by several private sector processors and primary cooperative societies. About 55% of the milk produced enters the formal market and the dairy value chain employs over 800,000 workers on a full time basis. Thirty medium and large scale processors handle 25% of the marketed milk while the rest is handled by informal pla yers. There are over 240 primary cooperative societies involved in the dairy value chain and the Kenya Dairy Board [KDB] regulates the sector.

The Large-scale Commercial Farmers [LCFs] and Value Addition in the 1950s & 60s

In the both crop and livestock sectors, the British colonial administration established laws, regulations and patterns of governance that were beneficial to European settlers who were allowed to occupy large parcels of land in high potential

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areas particularly in the highlands and in humid and sub-humid areas in particular of Kenya and some parts of Tanzania and Uganda. The Belgians had similar programmes in Rwanda and Burundi as well as in the then Belgian Congo. Land was acquired from the local population and they were moved from their lands and settled in what were then called Native Reserves. These settlers were supported by the administration to establish large-scale commercial farms [LCFs] in the crop and livestock sectors. They cultivated cash crops for export [coffee, tea, pyrethrum; sisal and sugar cane] as well as food crops for their workers and for the emerging urban centres [e.g. maize, wheat, legumes etc.].

In the livestock sector, large scale dairy farms were established with imported

exotic dairy breeds. In the beef sector, extensive ranches were established and abattoirs were constructed to feed settlers in towns and for export to Europe. In Kenya the laws and regulations did purposely exclude the native population from participating in commercial crop and livestock production ostensibly as a disease and pest control measure. Also a Dairy Board was established under the Dairy Industry Act of 1958 to organize, regulate and develop the dairy industry in Kenya mainly for the benefit of the settler farmers. Its main role was to ensure the efficient production, marketing, distribution and supply of milk and dairy products including ensuring stable prices and improving the quality of dairy products. Other objectives of the Act included promoting market research and private enterprise in the production, processing and marketing of dairy products.

Milk and meat processing plants were built for the large scale settlers to process

milk and meat for the expanding urban population and for export to Europe. The dairy and meat industry in all three East Africa Community member states was mainly cattle based and there was no significant investment in small ruminant, poultry, piggery and even apiculture production.

For the crop sector Commodity Marketing Boards [CMBs] were established to

regulate the marketing and post-harvest processing of the main commodities e.g. National Agricultural and Cereals Produce Board for the staple grains in both Kenya and Tanzania; Coffee and Tea Boards in all three countries; Pyrethrum Boards in Kenya and Tanzania; Cotton and Tobacco Boards in all three countries. The role of these CMBs and their evolution is given in Box 2. They played and have continued to play a key role in supporting the development of their respective commodities and providing support to both the SCFs and the LCFs. The LCFs did establish their own growers associations [GAs] for specific commodities in each country [coffee; tea; sisal] and/or omnibus Farmers Associations [FAs] such as the Kenya and Tanzania Farmers Associations [KFA and TFA respectively]. These GAs and FAs played a critical role in input supply as well as in post-harvest processing; storage and marketing. The evolution of the GAs and the FAS as well as the Cooperative Unions [CUs] for the small scale commercial farmers is given in Box 3.

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Box 3: Farmers Associations [FAs] and Cooperative Unions [CUs]

During the period 1950 to 1975 - the decade before and after independence - the agricultural sector in all five EAC countries was essentially dualistic – with a commercial farmers sector comprising of medium and large scale farmers [MSFs and LSFs] largely from Europe and Asia and a trad itional farmers sector comprising of peasant subsistence farmers [PSFs] as well as an emerging class of African small scale commercial farmers [SCFs]. The commercial sector focused on cash crops [tea, coffee, sisal, pyrethrum, tobacco] and food crops for the small urban population [maize, beans, dairy] as well as for ex port where possible[e.g. apiculture products]. The commercial sector was highly organized with strong farmers associations which handled inputs as well as output marketing& processing {e.g. Kenya Farmers Association [KFA]; Tanganyika Farmers Association [TFA], and similar associations of growers/ planters of particular com modities e.g. Tanzania/ Kenya Coffee Planters Association [TCPA & KCPA] etc. in all the five countries}.The trad itional sector was dominated by the PSFs who concentrated on producing food [maize, bananas, sorghum and millets, pulses etc.] for their own subsistence with little external inputs. From the 1930s especially in the Protectorates and Trust Colonies [e.g. Tanganyika, Uganda] quite a number of Africans took up the cultivation of cash crops. Notable, among these was the cultivation of coffee and la ter on tea by smallholders in Tanganyika and Uganda in the 1930s and 40s and later on in 1950s in Kenya, cotton and groundnuts and tobacco (throughout the EAC region]. The PSFs and SCFs established , during the 1930's to 1950's, among the strongest cooperat ive movements in Africa which handled the export of their cash crops as well as delivery of inputs. These cooperatives established extensive facilities and institutions for post-harvest marketing, handling and primary processing of the produce before being exported and/ or sold to local factories and this contributed significantly value addition and increased incomes to farmers as well as employment opportunities. Notable among these cooperatives were the Kilimanjaro Native Cooperative Union (KNCU) in Moshi, Tanzania which was started in 1932, Victoria Federation Cooperative Union (VFCU) in Mwanza, Tanzania and which, by 1960, was reckoned to be the largest cooperative movement in Africa. Both the FAs and CUs had extensive investments in the post -harvest systems managing agro-industries [ginneries, grain milling, oil seed processing etc.]; transportation and logistics companies as well as storage infrastructure. A dual institutional structure therefore emerged - one for handling the input supply and post-harvest management systems for the SCFs and the other one for MSFs and LSFs. Both were comparatively quite efficient and the colonial governments established other institutions to offer support services to both groups in cross cutting areas e.g. research services, combating migratory pests, and commodity marketing boards [CMBs] and Commodity Development Boards [CDAs] [see Box 2] which had representatives from both sectors which were responsible for overall guidance of the sector especially on quality issues such as grades and standards. After independence the CUs were abolished in Tanzania in the 1970s and their functions taken over by the CDAs. However by 1985 it became apparent that this was a mistake and they were re-established in the 1990s although in a mu ch weakened state. Likewise the FAs were affected by interference in their operations by politicians which weakened them considerably. During the late 1990s new farmers organizations have been established throughout the region like MVIWATA in Tanzania serv ing more in an advocacy role

Other Players for Post-harvest Processing and Value Addition in the 1950s & 60s

In addition to the GAs and CUs other key players/institutions in post-harvest processing and value addition active and/or established/expanded in the 1950s & 60s were the Town/Municipal/City Markets [retail and/or wholesale] which were and have remained important institutions in the post-harvest handling, storage and marketing of food especially fruits and vegetables as well as roots and tubers. Indeed these markets are also important institutions for the marketing of livestock products as many municipal and city abattoirs are linked to them and they are thus quite important in the livestock as well as fisheries post-harvest systems. Quite a large number of people are formally employed in these institutions either as retailers and/or wholesalers. They are also the main source of supplies for the thousands of fruit and vegetable hawkers found in the urban areas. The evolution of these city/town markets is given in Box 4.

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Box 4: City & Town Markets and their Role in Post-Harvest Systems in the EAC Region Wholesale and retail food markets play an inord inate role in supplying food to the urban poor and in marketing especially

a significant percentage of fruits and vegetables as well as roots and tubers consu med in urban areas in the region. Given the rapid urbanization of all EAC countries and the lack of alternative supply chains, it is likely that they will remain important for the foreseeable future. Furthermore, it is apparent that any sustainable attempt to promote efficient wholesale and retail markets as part of an overall improvement in the food supply and distribution systems {FSDSs] should involve concerted and coord inated effort by all key stakeholders. The role of stakeholders, especially government and municipal/ city authorities, i n this process should therefore be clearly defined . Most of the street hawkers of fruits and vegetables found in most towns obtain their supplies from these markets. Most of the markets in the ESA region have evolved from the 1950s & 60s and they are one part of t he FSDSs to the poor urban consumer which has received less research attention cf. the super & hyper markets and malls. These will remain an important part of the urban food systems especially for the fruits and vegetables as well as roots and tubers and it is important that they are provided with adequate support from an institutional and organizational perspective as well as in infrastructur e.

The benefits of efficient wholesale markets include enhancing transparent prices, facilitating transactions in t he marketing chain, reducing marketing costs through economies of scale by lowering per unit transport and handling costs and contributing to improving food hygiene as well as food quality and safety. Wholesale markets also promote sorting and grad ing as w ell as standard weights and measures, thus facilitating trad ing by description which minimizes transaction costs. By encouraging efficient off-farm storage, wholesale markets contribu te significantly to reducing post-harvest losses. The establishment of horticulture development boards/ authorities and association s has given impetus to significant increases, over the past two decades, in the export of fresh horticultural produce from the ESA region to the European and Middle East countries especially from Kenya, Uganda, Tanzania. These institutions have facilitated the establishment of very sophisticated supply chains linking both small and large scale producers with major markets overseas. Significant amounts of money have been leveraged for investment in the supporting infrastructure as well as in capacity build ing in the regulatory and facilitating institutions. Horticultural exports are now a major contributor to the foreign trade of some countries [e.g. Kenya]. This has inevitably led to significant value addition to the farmer’s produce. Also of late Governments in the region have been investing in the so called ‘International ‘markets like the Kibaigwa Market near Dodoma in Central Tanzania where post -harvest d rying; cleaning and sorting facilities are p rovided and commodities are sold at regional/ international level. Several such markets are now under construction in d ifferent parts of Tanzania.

Other players active in post-harvest processing and value addition in the 1960s in the region included the large international commodity and food companies such as Unilever, Brooke Bond, Del Monte, Nestle; Mitchell Cotts, BAT, Cargill, Smith Mackenzie etc. These were involved either in direct production and processing [e.g. sugar, tea, pyrethrum etc.] or in commodity marketing and thus handled large volumes of the agricultural produce from the region [cotton, oilseeds, sisal, tobacco,coffee etc.].

There were also a large number of family owned medium level companies, established in the 1940s to 60s, which were quite active in post-harvest processing and value addition throughout the region. These included companies owned by Asian and/or European families [e.g. the Madhvani and Mehta Group of Companies in Uganda, Unga Limited in Kenya and Tanzania etc.], the Dabaga Processing Company in Tanzania; as well as many small and medium companies involved in grain milling, oil seed processing; processing of livestock products, forestry and timber products including apiculture. All these companies played and continue to play a key role in the post-harvest systems and employ thousands of workers throughout the region.

Finally are the research and development institutions for the post-harvest system as well as the food safety regulatory organizations. In the 1950s and 60s [up to 1977] the R & D system especially for the post-harvest system was largely handled at the East Africa Community level to attain economies of scale and scope as it would have been un-economical for each territory to establish its own institution in this area. The East Africa Agricultural and Forestry Research Organization [EAAFRO], East Africa Veterinary Research Organization [EAVRO] and the East Africa Industrial Research & Development Institute [EAIRDI] as well as the East Africa Bureau of Standards [EABS] were the institutions established to handle R & D and standards setting activities across the region. They were quite efficient and came up with quite a lot of useful outputs – coffee driers, hammer mills etc. in support of agro–industries and the entire post-harvest system.

Evolution of Agricultural Processing & Value Addition during 1963-93

First Decade after Independence 1963 – 73:

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The first decade after all the countries had gained independence [1963 – 73] was essentially one where each of them was charting her long term development paths. This inevitably affected the agricultural sector and in particular the post-harvest and value addition programmes. Notable events which occurred during this decade and which affected the post-harvest and value addition sector include:

1. The negotiations and signing of the protocols for the establishment of the East Africa Community [EAC1]which was formally inaugurated in 1967.The EAC1 had three components: a) The Common Services such as agricultural and industrial research, university, meteorology and civil aviation services etc. at regional level b) The Common Market whereby the three countries were under one customs union with common tariffs and free trade between them thus facilitating investments in among other areas agro-industries and c) The joint corporations providing services to the region such as the joint airline, railways; harbours, posts and telecommunications etc. All the three components of EAC1 affected the developments in agricultural sector of the three countries especially in terms of trade; movement of people in the region; investments in, among other areas, agro-industries and the capacity at national level for technology development and transfer etc.

2. The transfer of large numbers of commercial farms previously owned by European settlers to the Governments in the region either for settlement schemes of small-holder farmers [mostly in Kenya and to some degree in Tanzania] or as medium and large scale commercial farms operated by citizens [mostly in Kenya]. This naturally affected the post-harvest processing and value addition activities which had been established before independence. This also affected the institutions which had been established in the 1950s and early 60s in support of post-harvest and value addition activities e.g. the KTDA was strengthened while the Cooperatives in Tanzania were adversely affected. The decline of the influence of the European settler farmers on agricultural developments and investments had significant effect on the post-harvest sector in the region as these farmers played an inordinate role in the development of the latter.

3. Shifts in national policies did significantly influence the post-harvest sector including value addition. There was African Socialism in Kenya through Sessional Paper of 1969; Ujamaa in Tanzania through the Arusha Declaration and the Common Man’s Charter in Uganda. Policy changes resulting from these policy papers ranged from indigenization of small and medium enterprises in Kenya to nationalization of key sectors of the economy in Tanzania with Uganda being somewhere in the middle until after the 1971 military coup when nearly all Asians were expelled. This led to a decline of agro-industries and agri-business in Tanzania and Uganda [as the main entrepreneurs were forced out] and strengthening of Kenya’s agro-industrial hub.

4. Despite all the changes and problems highlighted in (1) to (4) above there was growth in AgGDP in all the countries partially fuelled by increases in commodity prices as well as in quantities produced (e.g. coffee; tea; cotton; cashew and tobacco}. Some products of agro-industries became popular brands in the region [e.g. KCC dairy products; Kimbo cooking fat etc.].

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Second Decade after Independence 1973 – 83 During the second decade, quite a number of events did occur which influenced

developments in the region in the post-harvest and value addition area. These include:

The establishment, in all the five countries, of parastatals modelled on the KTDA to manage commodity specific development programmes. In Tanzania for example there CDAs for coffee, sisal, cotton, tea, cashew, tobacco, forestry, pyrethrum, livestock, fisheries. The situation was the same in Kenya and Uganda but with fewer numbers of these parastatals/CDAs. The major donors supported the programmes of these CDAs and most of them were led by staff seconded from the civil service with lots of expatriate. Much of the activities of these CDAs focused on input supply and output marketing including processing and exporting.

The CDAs did affect the operations of the Cooperative Unions [CUs] and Farmers Organizations such as KFA; TFA; KCC etc. especially in the post-harvest sector. The CUs had become politically quite powerful in some countries and in some cases ion were identified with political parties and thus leading to subordination of their economic to their political role. There was thus quite a lot of interference in their activities by the political system leading to the abolition of the several CUs and their activities being taken over by the CDAs – e.g. in Tanzania all the CUs were abolished in 1977. All this affected adversely the post-harvest system as the CUs had been quite effective in buying, bulking, grading, storage and primary processing of many commodities.

The East Africa Community [EAC1] collapsed in 1977 due to political differences between the three member countries. This was followed by border closures and military conflicts between the three countries. Also the collapse of EAC1 meant that each country had to start its own R & D system – this did particularly affect Tanzania and Uganda as much of R & D work and facilities had been based in Kenya. Also with border closures trade between the countries declined especially for processed agricultural products.

Increase in commodity prices on the global market [e.g. the coffee boom of 1976-80] did, somehow, cushion the countries in the region from the economic and political disruption occurring during this decade and the AgGDP statistics did show growth even though more modest cf. the first decade.

This was also the decade when the Green Revolution [GR] was occurring Asia and Latin America with bumper harvest there drawing the attention of the World to the woefully inadequate capacity of the post-harvest systems in the most of developing world. This led to several global initiatives on reducing post-harvest Losses [Mrema & Rolle, 2003] and in Africa focusing largely on understanding and improving the traditional storage and primary processing systems at the household level as it was reckoned that here was where most of the post-harvest losses [PHLs] were occurring [Mrema 2012, Mrema & Galatova (2013)].

It was also during this decade when the major multi and bilateral donors provided assistance for agro-industries and agribusiness development [e.g. ten cashew processing factories were built in the rural areas of Southern Tanzania using untested technologies with all of them experiencing severe technical and operational problems until they were abandoned in the late 1980s.

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The second decade after independence ended with pessimistic projections of agricultural developments in Africa including the EAC region [Berg 1981]. SSA [and EAC region in particular] was beginning to lose out technologically and in global trade in the commodities where it was leading in the first decade. Food imports were increasing and regional trade was stagnant. All these led to a re-assessment the development paradigms of the 1970s. The end of this decade was also the beginning of designing and planning for the Economic Structural Adjustment Programmes [ESAPs].

Third Decade after Independence 1983 – 93

The third decade after independence was essentially a reflection and re-jigging period for all the countries in the region following the events which occurred in the first two decades. Global events like the end of the cold war and beginning of globalization did certainly influence the thinking on economic and agricultural development in Africa among other regions. First generation political leaders were retiring and a new second generation leaders were taking over with liberalization of the political space. It was also being increasingly recognized, as part of the ESAPs, that the parastatals which had been established in the first two decades were not only inefficient but also a major drain of state resources. Also the CUs and FAs were again being viewed positively [e.g. in Tanzania the CUs were being re-established following their abolition in the 1970s]. The private sector was being viewed more positively with some of entrepreneurs expelled earlier returning [e.g. the Madhvani and Mehta Groups in Uganda] - this had significant impact on the post- harvest systems and value addition activities in the region. At the national level new institutions were being established [e.g. KARI; NARO; TARO & TALIRO] and were taking a new look at the R & D scene.

With the opening of the borders which had been closed during the second decade there

was an increase in cross border trade especially between all the three countries of EAC1. Much of the trade at this time was dominated by export products of agro-industries in Kenya to the other two countries and agricultural products the other way. Discussions on establishing of a new EAC started during this culminating with the formal establishment of EAC2 in 1993. Research systems were collaborating with regular meetings of Committee of Directors [CDs] of National Agricultural Research Institutes [NARIs] from 1987 this time including other countries in the wider eastern and central African region. All these had positive effect on the post-harvest systems and regional trade in the region. Companies investing in agricultural processing were beginning to look at the entire region for their market as well as source of raw materials. Growth of AgGDP was however low during this decade for all the countries due to inter alia poor weather and declining commodity prices.

Fourth Decade after Independence 1993-2003

Events occurring during the fourth decade after independence have had the biggest impact on the post-harvest sector in the EAC region. Much of what occurred was a continuation of policies and programmes started during the third decade and given impetus by political and economic developments in the region and globally. Implementation of the ESAPs was accelerated during this period with the World Bank and other donor agencies playing a major role in policy reform. Notable events/programmes occurring during this decade include:

13

1. The privatization of most of the business activities of the parastatals especially the CDAs and some CUs. Most of these were either in input supply or in post -harvest systems such as buying, bulking, grading, storage and processing. This occurred in all the countries in the region.

2. New companies, most of them locally incorporated, emerged to handle the activities which were being privatized in (1) above. Some of these companies have registered phenomenal growth over the two decades such that they are now leading multi-million regional conglomerates [the Azam, Brookside and Mukwano Groups in Tanzania; Kenya and Uganda respectively – becoming leading brands of processed foods in the region]

3. Emergence of new export sectors like horticulture and fisheries – both these sectors were non-existent in early 1990s but have grown to multi billion industry over the past two decades. The combined horticulture export sector for the five countries netted over $1.3billion in 2012 while the fish export sector from Lake Victoria netted over $350million for the three countries with 34 factories around the Lake [12 each in Tanzania and Uganda and 10 in Kenya] .

4. Both supermarkets as well as urban city/municipal/town markets have become quite important suppliers of food in urban areas and do greatly influence volumes, quality and standards in the post-harvest system especially for the perishable foods such as fruits and vegetables, roots and tubers as well as livestock products.

5. Rapid urbanization has greatly influenced the post-harvest system e.g. Nairobi and Dar es Salaam crossed the two million while Kampala crossed the one million population level during this decade.

6. Investments in infrastructure – roads, markets and telecommunication – which began to be made in this decade have had big impact on post - harvest activities e.g. increased cross border trade; competition with imports increasing e.g. rice; apples; dairy products; broilers etc.

7. The EAC 2 was formally established and other new players like ASARECA were established e.g. FOODNET of ASARECA was instrumental in bringing post-harvest issues into the research agenda of NARS in the region. ECAPAPA of ASARECA was instrumental in the harmonization of seed laws and regulations in the EAC leading to increased trade in processed seed.

Fifth Decade after Independence 2003-13 The fifth decade after independence has seen more consolidation of the post-harvest sector in the region. The agro-processing companies which were established during the third and fourth decade have continued to grow and expanded into all countries of the region [Azam and Brookside]. They have consolidated their activities upstream and downstream and across the region with investments in logistics and transportation as well as modern food processing plants. Most are approaching the $1 billion mark. Also the supermarkets are increasing their share of volume of food sales in the region especially in the major metropolis like Dar es Salaam, Kampala and Nairobi with several chains competing. Also with new urban retail and wholesale markets being constructed this has led to increasing the quality of fresh fruits and vegetables as well as roots and tubers being availed to consumers. Food safety concerns [e.g. alfatoxins etc.] have emerged as of major issue which needs to be factored in.

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New players have also emerged like the East Africa Grain Council [EAGC] as well as associations of traders either as independent organizations or operating under national chambers of agriculture, commerce and industry. The construction of new roads both linking rural and urban areas as well as trunk roads linking countries coupled with availability of cheaper trucks [imported either as second hand from Japan or as new trucks from India and China] has greatly facilitated the transportation of agricultural produce across the region. This has led to increased trade notwithstanding the non-tariff barriers which are there.

The Value Chains [VCs] entered the development agenda during this period and is seen by some as a panacea to the agricultural development especially from a post-harvest and value addition perspective. It is therefore being promoted some as a one size fits all solution in the region. However there is need to tread cautiously in this regard as previous similar initiatives have ended up disappointing net results [e.g. the appropriate technology as well as the farming systems approach of the 1970s and 1980s]. The VCs concept was first developed in the manufacturing industry in the USA in mid 1980s as an instrument for identifying the value of each step in the production process. Tools used to link the different players in agricultural value chains include, among others, contract farming [CF] and the warehouse receipt system [WRS]. However, use of these tools in the agricultural sector is fraught with many problems especially in the small holder sector in SSA. These problems include a weak institutional framework for their use including a legal system for the commercial sector which is expensive.

Rubens (2007) and Trienekens (2011) have categorized agricultural food systems in

developing countries in three sub-systems: an A-system catering for local low-income sector; a B-system catering for local middle and high income sector; and a C-system catering for the export market. Rubens (2007) noted the VC approach works best in the ‘C’ system which essentially is an export chain which is more integrated and with fewer actors as well as clear rules for engagement and operations. The EAC region has so far done quite well with these ‘C’ system VCs being large exporters of tea; horticulture; coffee; tobacco; cashew nuts etc. The B-system VC can be characterized as the local middle to high income chain concentrating largely on local and regional supermarkets with small/medium sized producers and cooperatives being the main suppliers.

The ‘A’ system is the local low-income chain where small producers supply local markets

at the town/municipal levels. These A-system chains have many intermediaries (traders), are relatively long, have limited market information and they deliver the largest share of the volume of agricultural production like roots and tubers; cereals and legumes; meat etc. With all countries in the region urbanizing very rapidly [all countries in the region will have more than 50% of their population living in urban areas over the next two decades], it is the ‘A’ and ‘B’ systems VCs which are going to handle the bulk of the agricultural produce and these need to be supported not only in terms of physical infrastructure but also the institutional framework for agro processing and value addition. Lessons from the A system may prove useful in this regard especially in terms of employment creation. If subsistence farmers are excluded then there are certainly more people formally and informally employed in the post-harvest sector than in any other sector especially in the A-

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system VCs. These include those who are hawking, on the streets of all urban areas, fruits and vegetables, nuts and other semi processed food products, livestock products etc. The post-harvest sector will therefore remain for the foreseeable future a major employer in this region. Further, the improved infrastructure for transportation and telecommunication including for money transfer has led to the emergence of small and medium scale traders who do their business across national boundaries – this is likely to remain a major growth area. The major issue is creating an enabling environment with appropriate policies and institutional frameworks governing the sector - especially within the countries and for food crops to lowering transportation costs which can be quite high in the region compared to other parts of the World [see Fig. 1 ].

Source: World Bank (2009)

Fig. 1: Long-distance transportation cost in selected countries (USD/ton/km)

Agricultural Processing and Value Addition in the 21st century:

The world’s attention turned to the post-harvest systems of the agriculture sector in 2008 due to the global soaring food prices of 2008/09. The dramatic increase of food prices and the crisis it triggered led to several global and regional initiatives with the primary aim of promoting a comprehensive and unified response to the challenge of achieving global food security, including by facilitating the creation of a prioritized plan of action and coordinating its implementation. Among them were initiatives in the post-harvest sector. During this period also various studies by FAO and other agencies had called for action and increased investments in SSA to strengthen the post-harvest systems including downstream support services such as storage, markets and first stage processing as well as investments in agro-industries, produce handling and transportation logistics. Notable here was the FAO projections of the level of capital resources the SSA region will need to invest if it is to be able to feed its increasing [and rapidly urbanizing] population by 2050 [Table 1]

0.03

0.04

0.05

0.05

0.11

0.11

0.12

0.15

0 0.2 0.4 0.6 0.8 1 1.2

Brazil

USA

China

France

Ethipia

Kenya

Tanzania

Uganda

US$/ton/km

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16

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Table 1: Capital Requirements to overcome Hunger

Cumulative Investments over 44 year period to 2050 in billion US$

Item Sub-Saharan Africa

1. Primary production (including irrigation and mechanization) 496

2. Down-stream support services (storage: markets and first stage processing)

444

TOTAL 940

US$ 15billion/year in additional investment needed

Source: Capital Requirements for Agriculture in Developing Countries to 2050, FAO, Rome, 2009

Unlike in the 20th century when most of the population in SSA resided in rural areas

[up to 80% of total population in most countries by 1980 see Fig. 1] projections are that by 2025 the urban population will be more than 50% of the total population in many countries in the region. Consequently, therefore unlike the situation in the 20th century when most of the food produced was consumed on the farm and/or in rural areas, the situation in much of the 21st century will be quite different as much of the food produced will be consumed far away from the farm and/or rural areas. This means the post-harvest management systems will have to factor this demographic and food demand change from technological, institutional and financial aspects.

The food supply chain in the 20th century was quite short [from the field to a table

within the same farm and/or village] and with one or two actors i.e. the farmer and/or local trader. In the 21st century countries in the region will have to grapple with long food supply chains [from the farm through rural markets and roads to urban markets and consumer in towns/cities hundreds of kilometres away] with many actors involved – farmers, traders, transporters, warehouses, processing and packaging industries, wholesalers, retailers and the consumers. This therefore means establishing systems and logistics for moving large quantities of food through several stages over long distances with several actors involved in this long chain. The objectives therefore of PH systems management is to efficiently move large amounts of food/produce from the farm to the consumer with minimum post-harvest losses.

Also globalization has led to the opening up of local food markets to regional and

international suppliers since the turn of the century. According to AUC data demand for agricultural commodities and high-value food products across the SSA region will increase from US$50 billion per annum in 2000 to $150 billion by 2030. Potential income to farmers due to increased trade in domestic and regional markets is expected to increase to $30 billion by 2030. Developing the necessary market linkages could increase rural incomes by an additional $60 billion. All this should provide incentives for increased investments in the post-harvest systems as indicated in Table 1. Feeding an expanding urban population presents challenges all along the agricultural value chain, from suppliers of inputs and producers to food processors, distributors, retailers, and consumers. It also provides emerging opportunities to food producers and processors [both small and large scale ones].

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Source: United Nations Department of Economic and Social Affairs/Population Division (2008). World Urbanization

Prospects: The 2007 Revision

Fig. 2: Urbanization in Africa by Sub-region, 1990-2050 Supermarkets have still to take off in many parts of sub-Saharan Africa and the

traditional market structures will continue to dominate in most urban areas for quite some time. Improving these traditional market structures not only from a marketing and logistical perspective but also from a food safety and hygiene perspective will be necessary to increase the efficiency of the food chain. There is a great need for more refrigerated warehouses and transport – which are expensive and may be financed through private investors – hopefully inexpensive solutions and technologies which small scale farmers and traders could use will emerge through the R & D efforts as it has occurred in the cell phone sector [such as low-energy cooling chambers and “solar ice” chests].

The above present challenges on the need to design and craft efficient PH management

systems [which, among other things, reduce losses to the minimum] from a policy and regulatory perspective to technology and innovation as well as institutional and business/enterprise aspects. All these will require investments if the EAC region is to meet these challenges. It is quite important that lessons are drawn from the development experience of the past 50 years – in particular on the policy and institutional aspects on what has worked and not worked – in order to emulate successful examples and avoid repeating mistakes. There is a lot to be learned from that experience.

Innovation through research and development as well as technology transfer initiatives

will be required to improve on current technologies, practices and institutions involved as well as develop new ones to enhance the efficiency of the post-harvest systems whilst reducing PHL to the minimum in the agricultural value chains for all types of produce [such as cereal grains; oilseeds and pulses; roots and tubers; fruits and vegetables; livestock products - meat, eggs, milk and other dairy products; fishery products as well as cash crops - cotton, coffee, tea, sugar cane, cashew etc.] including for:

—

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

1990 2000 2010 2030 2050

Pe

rce

nt U

rba

n

Eastern Africa

Central Africa

Northern Africa

Southern Africa

Western Africa

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Packaging and handling of produce with minimum damage and losses as it passes through the various stages of the agricultural chain from harvest to the consumer,

Preservation and safe storage of the produce either under ambient conditions or under controlled atmosphere [hermetically, controlled humidity and temperature, cold rooms, etc.],

Processing of the produce to add value and/or separation of different components [cleaning and grading, de-hulling/decortication, milling; drying, thermal processing, mechanical separation operations etc.]

Transportation and logistics – including containers, storage structures – warehouses, silos;

Management and operations of enterprises / businesses, organizations and institutions involved in the various parts of the chain – marketing, logistics, insurance and finance, manufacturing, city and whole sale markets, commodity exchanges etc

Ensuring food quality and safety – including easier and cheaper means of testing, regulatory frameworks and inspection protocols

Given the current socio-political environment of the agricultural sector in most of the

EAC countries, with a majority of the population engaged in small scale agricultural production a range of challenges must also be addressed, including close coordination between smallholder production and marketing, processing and shipping and the ability to enforce contracts, access upfront investment capital, and take pioneering risks in new areas and crops. These require institutional innovations to provide capital and inputs to smallholders beyond what currently exists. The successful experience of over fifty years of developing cash crop production by small farmers in the region does show that strong farmers’ organizations/cooperatives are necessary for providing smallholders with the required technology and inputs, advisory services, and training.

A new vision for agriculture in the region, featuring a productive and expanding class of

small and medium scale commercial farmers that is inclusive of women, attractive to youth, and linked to growing agribusiness value chains needs to emerge [CAADP (2005); 3ADI (2009); World Bank/FAO (2009)]. To realize this vision there is a need for institutional innovations which promote enterprise whilst taking cognizance of lessons of past experiences especially on the challenges of coordination between smallholder production, marketing and processing where strong farmers’ organizations have a comparative and competitive advantage. In this respect business models which need to be considered include contract farming, which works well when there are natural processing or marketing monopolies, strong enforcement, and an enabling regulatory environment. This approach could also include public/private partnerships where, as an example, private firms manage the processing facilities in exchange for providing upfront investments.

Other models include medium and large-scale farming that generates jobs. One

approach is stand-alone enterprises, which entail mechanized farming coordinated closely with processing and marketing [e.g. sugar estates and out-grower schemes]. This can be the most efficient production method where there are high market standards, but can still be inclusive and provide good local employment. Another approach is large-scale enterprises with community equity, as it has emerged in the tea firms throughout the EAC region. These

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institutional models are necessary for establishing more efficient post-harvest systems where farmers, public and private sector entities work together for the benefit of all.

Technology development and transfer for the post-harvest systems and more

specifically for the reduction of losses needs to be given higher priority. It is quite apparent that (in all of the EAC countries the NARIs) has little capacity for research in the areas critical to the management of post-harvest systems and value addition [i.e. agro-processing technology, produce handling, transportation and storage, agri-business etc.]. The strength of the NARIs lies more in those disciplines related to tackling the on-farm production constraints [agronomy, plant breeding and protection etc.]. The universities in the region through their Faculties of Agriculture [FAS] are much stronger in areas related to management of PH systems and PHL reduction. However, the R & D effort of these two parts of the NARS is inadequately coordinated in most of the EAC countries. Therefore, there is the need to strengthen the coordination at national level of the work of these two parts of the R & D systems especially establishing institutional models which ensure that they complement each other rather than setting up duplicate facilities in the NARIs. The SROs, the IARCs and ARIs should also do the same at the sub- regional and regional levels in addition to advising the national systems on the most effective institutional arrangements.

Finally is the whole issue of information exchange on PHL especially as related to

technology development and transfer from all perspectives [technical, institutional, policy, economic and business]. As already stated it is important that post-harvest system is considered holistically and as part of enhancing the efficiency of the entire value chain from the farm to consumer. There is need to establish mechanisms to facilitate better information exchange amongst the key players – be they researchers, extension officers, business managers and policy makers. It is quite apparent that there is a need to strengthen information exchange on overall PH systems management in EAC region and entire SSA. This could be under KT; ASARECA; or the EAC Secretariat.

Concluding Comments

With changing food habits due to urbanization and increasing incomes as well as food safety concerns there will be more trade in the region especially for the perishables like fruits and vegetables; meat and other livestock products as well as for roots and tubers. This will require the setting up of value chains cutting across the region to exploit seasonal variations. These VCs will be greatly facilitated by improved road and transportation networks as well as the telecommunication and business and financial linkages. New areas will emerge as main suppliers of food to the larger metropolis such as Kampala; Nairobi, Dar es Salaam, Kigali and Bujumbura as well as emerging one million plus cities such as Mwanza; Mombasa; Arusha; Dodoma, Mbeya and Mtwara. Those who perfect the supply logistics as well as the handling, packaging and storage of agricultural produce are likely to emerge as the winners over the coming three to four decades. The EAC region needs to prepare itself to meet these challenges of the next decade which will greatly transform not only the agricultural sector but the entire economy of the member countries.

*******************

REFERENCES and Bibliography

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