Market Assessment

Value Chain Analysis of the Groundnut Sector in the Eastern Province of Zambia. IAPRI, 2013

    Description
    Employing a value chain analysis approach, this study examines the primary stages in the groundnut value chain and the constraints limiting the full functioning of the chain. The study seeks to provide new insights on investment opportunities along the groundnuts value chain in Zambia for farmers, private and public actors. Given the expected clear benefits of groundnuts as a source of income and nutrition, this study focuses on Eastern Province, which is the largest producer of groundnuts in the country and yet has one of the highest rates of poverty and malnutrition.

    Summary of results
    The key findings of the study are:
    - Persistently low yields of groundnuts in the country significantly contributing to low production levels despite over 8% of total cultivated land dedicated to groundnuts and nearly half of the smallholder farmers growing the crop. A critical factor partly explaining the low yields is the low use of hybrid seed and extensive recycling of Open Pollinated Varieties (OPV). This further discourages private investment in new seed production as the demand for such seed remains low.
    - Approximately 80% of the groundnuts are grown for home consumption leaving very little for the market. Relative to maize, groundnuts are more labour intensive, particularly during weeding, harvesting and shelling, such that most households tend to produce only enough for home consumption;
    - Low and unpredictable prices. The prices can vary from K1,800/kilograms (kg) to K6,000/kg in one season, depending on when the selling is done, whether it is a cash or credit transaction and the distance to the markets and;
    - High levels of aflatoxin contamination caused by poor drying and storage methods of groundnuts. Currently, Aflatoxin levels in Zambia exceed acceptable international requirement levels for export. Zambia is among the lowest exporters of groundnuts in the region despite having favourable agro-ecological conditions for growing the crop.