The Mozambican Population

Background

More than 70% of the Mozambican population live in rural areas and depend on subsistence agriculture for their livelihood. Productivity rates in the country are among the lowest in the SADC region, as a result of poor agricultural practices, very low access and use of the right inputs, exasperated by the shortage of public extension. As a consequence farmers struggle to produce enough staple crops, like maize and sorghum, for their own consumption, especially in the semi-arid areas of the Zambezi valley. Normally most of families have three meals per day, however in the period of food shortages (December to March) this frequency tends to go down for some families to two or even one meal per day (SETSAN/GAV, 2009). There are limited options for the cultivation of cash crops to raise family income and supplement the basic diet.

Sesame has been identified as a crop that can make a considerable contribution to the economic development in the Beira Corridor and help address poverty issues in the districts that the intervention is targeting. Sesame is drought resistant and can be produced in areas with few alternative cash crops. Revenues can be improved to USD 600 / ha at an average yield of 700 kg/ha, which compares very favourable to maize (USD 200/ha at an average yield of 1.2MT/ha) and cotton (USD 160/ha at an average yield of 450 kg/ha) in semi-arid production zones. Sesame requires little investment in inputs, making it very suitable for farmers in the Zambezi Valley, most of whom cannot afford expensive inputs.

Sesame is a promising smallholder crop with a national production that quadrupled between 2004 and 2009 peaking at 43,000MT in 2009, before stagnating in the last three years in part due to poor agronomic practices and failure to contain pests. The average smallholder productivity has remained around 450 kg/ha for a number of years, way below its potential of 700 - 1,000 kg/ha.

Most of the sesame is exported to Turkey, China and India and demand in those markets is currently not satisfied. This increases competition for sesame even on the Mozambique market leading to firming up of demand and prices. Currently Mozambique exports most of its sesame with little value added and has potential to process more of its produce (hulling, sesame oil etc.) However, even without product differentiation, increase in production could enable a domestic sesame cleaning, processing and pressing industry to become viable. For oil pressing to become viable, production would almost have to treble to over 70,000 MT/yr from the current approximate 25,000 MT. The graph below shows the trends in production from 2004 to 2011. The changes are mostly attributed to reduced land in response mostly to the attractiveness of prices in the prior season.

Around 80.000 farmers in the Beira corridor cultivate sesame on average production areas of around 0.35 ha, together producing over 50% of the national crop. There are emerging farmers who produce on up to 4 ha. The Beira Corridor production is estimated at MT 15,000 /yr.

Most of the crop is bought by a few major companies and their related buying agents, though the current season has seen an increase in buyers, mostly attributed to a surge in prices from Mts 28/kg in 2012 to over Mts 40/kg at the start of 2013. Areas cultivated by farmers are small, scattered and with difficult access and subsequently lead to high transaction costs.

Current productivity limiting factors include: use of retained grain as seed; late planting; too low plant population density; unavailability of labour for weeding and harvesting; limited thinning; limited weed control; and challenges in controlling pests like flea beetle and aphids.

In the second half of 2012, SNV and BAGC jointly carried out a sesame value chain analysis and concluded that production and market opportunities for Mozambican sesame are abundant. Companies like ETG are already increasing their warehousing and cleaning facilities, proving that there are good opportunities for smallholder farmer participation in sesame going into the future.

SNV has worked with ETG to develop the sesame value chain in the last 2 seasons. The experiences, aided by the joint SNV/BAGC study led to the partnership confirming that there is scope for developing the sesame value chain, leading to improved livelihood for farmers in the Beira Growth Corridor.

The Opportunity

Unmet global market demand for quality sesame means there is a firm demand for sesame and increased sesame production in Mozambique will all be absorbed by the buyers presenting increased income opportunities for farmers.

This season sesame is being sold at an all-time high producer price, which has triggered a lot of enthusiasm amongst farmers to enter into cultivating sesame or expanding their fields.

SNV is already working with ETG who is interested in integrating backward into the supply chain, taking on processing, trading and even input supply roles. On-going outgrowing schemes in the north of Mozambique between ETG and farmers supported by SNV will be replicated and up-scaled to the central region.

On the other hand the promotion of and support to strong producer groups, capable of collective marketing will allow the establishment of direct linkages to the company, eliminating the distortions and loss of value caused by the traders. Direct linkages will also lead to the development of embedded upstream services to producers by the company. Communication within the value chain will ensure production of varieties with demand, production to the market quality standards and production planning targeted to market needs, giving better returns to all actors and sustainability of the value chain.

Current low productivity levels can be improved substantial by farmers adopting good agricultural practices through intensive extension, demonstration plots, use of pest management and improved inputs, especially seed varieties. ETG has identified a seed variety from Guatemala that has a high oil content of 52% and receives a premium from the market. Crop loss as a result of pests (particularly flea beetle) can be greatly reduced by using chemically treated seed.

Emerging farmers can increase areas up to 4 ha with access to mechanised tillage. This SNV has demonstrated by working with ETG in an outgrowing scheme in the Nacala corridor.

Outgrowing schemes can help resolve the problem of access to technology and inputs for smallholders while capacity building farmers and the companies to honour transparent contract terms and focus on increased productivity.

Relevance of the proposed intervention

SNV and ETG have experience working together