Fasse icraf 2010

Value Chain Analysis of Bioenergy in Tanzania:

A Case Study in Tandai Village

Anja Fasse

Institute for Environmental Economics and World Trade (IUW), University of Hannover, [email protected]

09. June 2010, ICRAF Nairobi

Outline

• Introduction to Better-Is project• Research issues of IUW related to Better-is

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• Research issues of IUW related to Better-is– Description of the research area– Extended environmental social accounting matrix – Village equilibrium modeling


“Strategies to use biofuel value chain potential in Sub-Saharan Africa

to respond to global change”

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Source: FAOSTAT (2009), based on data from 2007

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Biofuel Evaluation for Technological Tanzanian Efficiency using Renewables - Integrated Strategies

Strategies to use Biofuel Value Chain

www.better-is.com

Strategies to use Biofuel Value Chain Potential in Sub-Saharan Africa to respond

to Global Change

Enhancing low-productivity Farming in Tanzania and linking to SMEs


Objectives Better-iS

• To identify the potential for linking low-productivity

farming to small and medium enterprises (SME) to

enhance livelihoods through biofuel value chains

• To provide farmers, regional organizations and local • To provide farmers, regional organizations and local

authorities in sub-Saharan Africa with feasible

strategies

– to benefit from biomass production potential

and

– to mitigate food insecurity.

09. June 2010, ICRAF Nairobi 5

Project Consortium

The International Food Policy Research Institute

Leibniz Centre for Agricultural Landscape Research e.V.

World Agroforestry Centre

Wuppertal Institute for Climate, Environment and Energy

Environmental Economics and World Trade

Association for Strengthening Agricultural Research in Africa

University of Agriculture, Sokoine (now involved)


Project Design

The International Food

Policy Research Institute

Wuppertal Institute for Climate,

Environment and Energy

Modeling Statistics Appraisal Expertise

Coordination & value chain analysis

Biomass consumption patterns

global energy and agricultural modeling

Partners

Leibniz Centre for Agricultural

Landscape Research e.V.

Environmental Economics

and World Trade

Association for Strengthening

Agricultural Research in Africa

World Agroforestry Centre

Stakeholder processes

Stakeholder processes

Village modeling & certification appraisal

Coordination & value chain analysis


Survey Area: Tandai Village

(Kinole Ward, Morogoro District)


Survey Area: Tandai Village• Location within the

– Uluguru Nature Forest Reserve (UNR)

– Community forest

• Tandai: 1040 households including 4211 individuals

• Sample size 30% (stratified random sampling): 314 households

• Wood value chain (firewood, charcoal, timber..)

• Jatropha as a host plant for spices e.g. black pepper, vanilla, also passion fruit.



Vanilla on Jatropha

09. June 2010, ICRAF Nairobi 11Black Pepper on Jatropha

What has been done so far:• Survey 314 households on agricultural production patterns and

interlinkages between households• Energy consumption and production • Focus on important value chains of cash crops (banana, pineapple, • Focus on important value chains of cash crops (banana, pineapple,

spices) and agroforestry.• GPS coordinates including altitude of 80% of the households• Timepreferences of the farmer• Perception of soil erosion and yield losses


Value chain analysis: Applied methods:

• Development of a social accounting matrix (SAM) extended by natural resource accounts for soil on village levelnatural resource accounts for soil on village level– Impact assessment via multiplier analysis

• Scenario analysis supported by an economy-wide planning model developed for the village economy– Feasibility study comprising different biofuel value chains

• Consumer surveys in selected European countries – Exploring WTP for certified biofuels (and ecosystem services) from Sub-

Saharan Africa


ProducersProducers

Factor Factor MarketsMarkets

HouseholdsHouseholds GovernmentGovernment Saving/INVSaving/INV

FactorFactorCosts Costs

WagesWages& &

Rents Rents

Demand for Demand for IntermediateIntermediate

TaxesTaxes

Domestic Private SavingsDomestic Private Savings

Gov. SavingsGov. Savings

Village Social Accounting Matrix (SAM)


ProducersProducers

Product Product MarketsMarkets

Rest of the Country Rest of the Country and Worldand World

IntermediateIntermediateInputs Inputs

SalesSalesRevenues Revenues

PrivatePrivateConsumption Consumption

GovernmentGovernmentExpenditureExpenditure

Investment Investment DemandDemand

ImportsImportsExportsExports Foreign SavingsForeign Savings

Demand for Final GoodsDemand for Final Goods

TransfersTransfers

Source: IFPRI Training Material 2003

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Linear Activity Model &

Forest Land Water

Farm I Farm II Farm III Farm IV

Commercial Resource Use ActivitiesManagement S

ystem

Village

Logistic growthmodel

Mathematical Planning Model

Model & Additive Utility

exogenousprices

endogenous prices

Farm I Farm II Farm III Farm IV

Village Factor and Product Market

-Production -Forest & Water Extraction-Storage-Consumption-Transport-Processing

SalesPurchases

Management S

ystem

Village

Trade with the neighboring region1609. June 2010, ICRAF Nairobi (Etti Winter, 2008)

Comparison Firewood and Jatropha Collection and Processing

HouseholdsType (fam) ha

Distance to forest in km

Hours/Day

Wood (man days/month)

Jatropha(man days/month)

H1 (4.1) 0.52 1 3 7.2 8.6 (7.1)

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H2 (6.1) 1.17 2.5 4.5 16.1 12.8 (10,5)

H3 (4.5) 1.38 2.5 4.5 11.7 9.3 (7,6)

H4 (5.1) 1.89 5 7 21 10.7 (8,9)

2kg wood per hh member per day*365=730 kg wood equivalent to 55 l plant oil per person & year. 15kg wood/Trip

Collection: 3kg Seed/h Extraction: 20% (30%) Processing 1,5h/ l

09. June 2010, ICRAF Nairobi Winter, E. and Fasse, A. 2009

H1 Min Labor Max profit Max Utility Min Labor No grazing

Max ProfitNo grazing

Max Utility No grazing

Subsistence [€] 665 665 665

Surplus [€] 0 151 127

Labor [h] 527 700 673

Leisure [h] 173 0 27

Z (Shadow Wage) 0,86

Wood [kg] 11906 17035 16242 13807 16294 16749

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Wood [kg] 11906 17035 16242 13807 16294 16749

Labor [month] 1,2,3,4,7,12 All All but 3

Land [month] 6,7,8 6,8 6,8

Forest Income % 65 76 70

% Labor +14 0 +2

% Income 0 -8 -18

09. June 2010, ICRAF Nairobi Winter, E. and Fasse, A. 2009

Max Utility, No Forest Use, Jatropha ProductionHousehold H1 H2 H3 H4

Z (Shadow Wage) 0.52 0.69 0.68 0.72

Surplus [€] 0.6 412 401 6196

Labor [h] 699 1424 687 1220

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Labor [h] 699 1424 687 1220

Leisure [h] 1 54 53 0.4

Utility 1 22 21 2500

Own Land [ha] 0.53 1.17 1.38 1.89

Community Land [ha] 0.44 8.12

Sold Labor [%] Yes: 0.53 Yes: 0.84 Yes: 0.67 No: 1.8Winter, E. and Fasse, A. 2009

How might Certification Schemes be Designed ?

1. Standard → principles and criteria to guarantee certain characteristics, certain methods etcmethods etc

2. Principles → guidelines describing how to meet a standard

3. Criteria → requirements describing how to achieve the principles

4. Indicators → concrete measures to verify that principles and criteria are met

Source Segerstedt 2009


• How could Co-Benefits between Biofuel production, Carbon savings and other ecosystem services be handled and what kind of market regulation is necessary?

• How could persistent funding and provisioning of ecosystem

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• How could persistent funding and provisioning of ecosystem services be secured ?

• What certification scheme is best ?• What are the preferences of consumers and suppliers?


22Thank you for your attention!!!

Fasse icraf 2010

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