Food Part 2: Filling Shelves

(If you haven’t read previous installments of this series, please start here http://cheetahdevelopment.blogspot.com/2009/06/food-part-1-farmers-markets.html.)

We're tracing food production in Tanzania.

So let’s jump from the small rural farmer to the food producer. I have now met many of these people in different regions of Tanzania, sized from very small to modestly large (by local standards). They were in a variety of food production areas including, peanut butter, snack foods, cereals, flour, dried flavorings, garlic paste, sauces, jams, sunflower oil, soy milk, catering, fish distribution, ice making, and others. Their stories are almost always inspirational! So far, I have only really told the story of Anna Temu and there are many others like Anna Temu in Tanzania (see related blogs). The odds they have overcome, the courage they have applied, and work that they are doing are all remarkable. About half of these people are women.

(Pictured below are products of a small Indian owned canning factory.)



Without exception, every continuously producing operation I met had the same #1 problem:

• they can’t get enough farm input
• to keep the factory running
• to keep up with demand
• to fill store shelves.

(Pictured below is the sales room of a maize flower milling company.)

Thus, factories are typically running at 20-33% of capacity. Everything they make they sell and ship that day. Every manufacturer says that market demand far outstrips their ability to produce. And I have seen the shipping rooms – the food is moving out.

But if you back up to the previous story, you will see that this doesn’t make sense. Farmers are having difficulty finding markets. 40% of the food they produce just rots.

How could farmers be over producing and literally 30 kilometers away a factory can’t keep its machines humming? When you come to grips with this, you see just how broken the value chain is in food production.

(Pictured below is a sunflower seed press that produces sunflower oil.)

There is a lack of large food processing because there is a lack of sources of large quantities of food inputs – not to mention that are of quality and reliable. On the other side of the coin, part of the reason that the large sources of food inputs don’t exist is because there are few large buyers.
(Pictured below: a peanut butter and snack foods operation.)

It is a chicken and egg problem (appropriate in a company where the majority of people keep at least a few chickens.) But even with chickens this problem exists. The caterer at Tumaini University struggles to find the 40 chickens she needs every day. Meanwhile, chickens (kuku – what a great name) are walking around the houses of every home surrounding the university. One chicken producer explained that she could supply part of the contract to supply the 3 store Dar es Salaam portion of the chain of Shoprite grocery stores if she could supply 5 tons of chicken per week. She can’t. (There is a long list of reasons because the food value chain is broken in so many ways. For example, there are problems with getting chicks, animal feed, and then packing the final product. She hasn’t managed to fill her own capacity even to 50% of the space she has for 4,000 chickens.) Therefore, Shoprite continues to import chickens, probably from Brazil, which is a long way to go for chicken. Moreover, there is strong demand for the locally grown variety of chicken, which has a completely different taste. Shoprite naturally wants them.

In this case, the chicken and egg dilemma resolves itself. It is clear where to start the solution…with farmers. They are input. By aggregating farm output from many farmers a reliable source of food can begin to be assembled to sustain factories. And the farmers benefit in return – they are provided with a reliable market, higher value for their crops and an opportunity/reason to increase output. In a future installment we’ll talk about a planned effort we have to make this happen within an actual village.

Next installment in this series: a successful example of farmers aggregating their production. To continue, go here: http://cheetahdevelopment.blogspot.com/2009/06/food-part-3-whats-in-cup-of-tea.html

(Pictured below: a small scale cereal factory.)