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Eng. Kalutu P. R. Koshuma (MSc. (Eng), Cons. Eng., MIET)

Mr. Sigisbert M. Mmasi (BSc. (Eng), MSc. (MBA)

Tanzania Engineering and Manufacturing Design Organization (TEMDO)

P.O. Box 6111, Arusha, Tanzania

Tel: 027 250 6220, Fax: 027 250 8058




Commercialization of smallholder production is a process which involves a

transformation from production for household subsistence to production for the

market. Through the process, traditional smallholder producers are integrated

into the world market economy. The process involves intensive and extensive

value addition activities with eventual benefits to the producer.

Tanzania like other developing countries especially in Africa South of Sahara

suffers chronic post harvest food losses estimated at between 30-40 %. Value

addition to the farm produce will contribute immensely not only in alleviation of

post harvest losses and enhancement of our food security situation, but also

increase economic growth significantly and transform agriculture into a profitable,

commercial venture, capable of driving Tanzanian economy from the traditional

raw material producer/ exporter to high value producer/ exporter with high

multiplier effects in employment and the economy as a whole. Successful value

addition activities involve innovation, adaptation and dissemination of appropriate

technologies. Use of technology can raise product output, quality, consistency,

reliability and packaging thus opening up new markets. Technologies for

processing and value addition can be available locally in Tanzania if proper

coordination among the various stakeholders is done. Over the years, the

Tanzania Engineering and Manufacturing Design Organization (TEMDO) have

attempted to develop technologies suitable for value addition of agricultural

produce with notable success. This paper explains the process used in


developing the technologies. challenges faced. experience learned and proposes measures and strategies which can be put in place to stimulate the availability of suitable technologies for processing and value addition to agricultural produce.0 Introduction: 3 . 1.

For agriculture to be sustainable it must create many more non-farm commercial opportunities for the poor farmers. The sector is important for Tanzania’s efforts towards poverty reduction and ensuring food security while meeting the challenges of the Millennium Development Goals Despite major successes made in improving agricultural productivity in the developing world and Tanzania in particular. diversification of income generating activities and organization (Lundy et al. Prices of farm products have been decreasing over the years. Despite these drawbacks. Though slightly declining. the agricultural sector is the key to Tanzania’s economic development. Small holder farmers face substantial barriers in achieving improved livelihoods.. the sectors contribution to GDP is about 50% (Rweyemamu. Agriculture has the potential to move Africa out of poverty to better living standards of its people. In Tanzania. opportunities exist for rural populations to improve their livelihoods through adding value. 2003. Shayo. Small holder farmers need to commercialize their farming activities which will involve a shift from subsistence production to production for the market. 2002). rural poverty still remains one of the challenges facing the developing countries. now and in the future. 4 . 2006).Agriculture accounts for 30-50% of GDP in most African countries and 70% or more of total employment (Anonymous 2005). markets increasingly becoming more competitive with Government support to farmers declining. contributing to over 50% of the country’s exports while over 80% of the nation’s population relies on agriculture for their livelihoods.

He/she can do this by increasing productivity through use of improved farming techniques like improved plant varieties and other farm inputs. Another way of increasing farmer income is through improved marketing techniques. The small holder farmer is faced with the challenge to improve income in agriculture. It is based on 5 . extension services. The target is normally the market. 2. transportation. This paper describes the attempt that TEMDO has made in solving some of the constraints of the small holder farmer through appropriate technologies in processing and value addition to farm produce. However this process will not ensure increased income to the farmer due to associated declining prices. under current conditions. The report recommends that the new approach to agriculture in Tanzania should be the integrated production system that links production. there is need to consider new approaches because the traditional approach to agriculture. is not working”. processing and marketing.0 Agro-processing and value addition. This will normally lead to more crop production with subsequent food security.The Poverty and Human Development Report 2005 point out that “to promote production and quality in an environment/economy such as Tanzania’s that is based on smallholder farmers who are competing in liberalized markets. This is a more challenging process which involves processing and value addition activities.

2002). 2001). They need to adapt to diversification beyond food security and include both farm and non farm activities for income generation.competitiveness through product differentiation and the development of niche markets (Lundy et al. which can be an area where small farms and small food processing firms have a competitive advantage over lager farms (Danielson and Park. Studies have found that in Latin America. some 40% of rural incomes are now non– agricultural while up to 80% of the value of final product is a result of post harvesting processing and marketing (Lundy et al. 3. When farmers are involved in value-added processing and marketing they retain most of the value paid by the customer which is normally taken by middle men processors. Small holder farmers must move fast away from subsistence production to production for the market. It has also been reported that value adding activities are capable of increasing farmer income by 350%... 2002). Value-added agriculture on small farms frequently involves specialty and differentiated products.0 What is value added 6 .

thus adding value to a food product (Ware. such as sunflower. • Value added agriculture involves the processing of food and nonfood raw materials. packaging. the farmer’s business ends with selling of the raw farm produce. and moving up one step to processing it into cooking oil and animal feed this process is considered to be value adding. 2006).0 Why value addition? Farmers must get more involved in the food chain in order to realize the profits generated along the food chain. 1999). Farmers must move up the food chain (Born and Bachman. 4. juicing. The farmer does not only produce and sell raw agricultural commodity but is also involved in processing. canning. labeling and marketing. Examples of value addition in agriculture include food processing: drying. This process is sometimes termed as first level of processing. and marketing of the product. As it is today. It is the transformation of raw agricultural commodities to consumer-ready food or non-food products. • When a small holder farmer moves from planting and harvesting a crop. • Value addition in agriculture involves adding features to a raw agricultural material used to make a particular food or non-food product. packaging. It includes local processing. or marketing. which adds value to a raw agricultural product. The farmer is hardly aware of the long process which his 7 .

stored. The agricultural industry in the United States provides a good example and experience of the need for farmers to move up the food chain. they must engage themselves in processing and value adding activities rather than just selling their raw produce.produce passes before reaching the ultimate customer. The farmer benefits through processing and value-added activities without necessarily increasing commodity prices. In order for the Tanzanian farmers to reap the profits of their ‘‘hard work. the farmer’s share of the price paid by the consumer is decreased. farmers received only 20 percent of the food market. processed. 2008). As this chain of activities gets diversified. storage and distribution to the market for sale. distributed. processing. advertised and marketed the foods (Born and Bachman.. In year 2000. with the other 80 percent going to those who transported. D. Worse still he does not know how much profit the middlemen are taking along the food chain. 8 . 2006) As the farmer gets more involved in some of the food chain activities his share of what the consumer’s pay for their food becomes bigger. In the United States. the food grown on the farm follows the chain involving transporting. entrepreneurial spirit and thrift’’ (Mbogoro.

cooking. grinding. particularly the preservation and processing of agricultural and allied produces may bring a wide range of benefits to the people in this country. prevent product damage and loss. generating job opportunities by opening up village-level processing units. create new jobs in rural areas. extracting. distributing. weaving. The value of farm products can be increased in endless ways: by cleaning and cooking. culturing. and preserve agricultural produce for longer periods of time. The important point is that it can contribute to sustainable development of agriculture. 9 . combining. Efficient post-production practices. make optimum use of resources. hulling. drying. churning. handcrafting. interest in “adding value” to raw agricultural products will definitely grow. smoking. processing. provide food consistency. labeling. Adding value to food commodities after harvest is also aimed at minimizing the losses during storage and to maintain the quality of product. spinning.The diversification and modernization of the present agricultural and other related activities supported by efficient on and off farm processing of the commodities for the purpose of value-adding is expected to increase food production and create employment and income generation. and packaging. As farmers struggle to find ways to increase farm income.

weeding and harvesting. then this can add to labor productivity without detracting from other sectors of the economy. The strength of the Tanzanian agricultural sector lies in the ability of the farmers to produce high quality produce and products. If non-farm activities can be taken up during slack periods. This will only be possible through the use of 10 . Technology (machinery and equipment) are the key to improving efficiency in agricultural processing and value addition industry to compete against imported produce from countries with developed industry. In fact technology acts as the engine which propels the development of the agricultural sector and improving farmer’s income.The agricultural labour force is typically fully employed during key seasons. 5.0 Role of technology in agro processing and value addition The farm processing and value adding activities in agriculture take raw agricultural products (such as sunflower seeds) and turn them into food or non food products that are consumed every day (like cooking oil or animal feed). The transformation process of changing raw agricultural material to consumable value added product must require the use of appropriate technology in one form or another. such as crop planting. the role of technology in the development of the agro processing and value adding sector cannot be overestimated. Thus. but is under-employed other times of the year.

and technologies suited to local conditions. At farm level in Tanzania processing of farm produce is almost absent. access to technology (processing tools and machines) is limited. Thus. Appropriate technology should be used to link food production. equipment. strengthening networking among key stakeholders and provision of appropriate and sustainable Business Development Services. 6. processing and marketing. This is manifested in the apparent absence of processing industries in the 11 . The challenges facing the farmers are often overcome through intervention from the Government.0 Challenges facing farmers in agro processing and value added agriculture The farm processing and value adding activities faces a variety of challenges which include market opportunities. The market does not provide any incentive to encourage value addition of the crop.appropriate technology right from the farming stage through processing to marketing. access to appropriate technologies. business management (entrepreneurship) and financing. The other challenge facing the small scale farmer is lack of readily available modern machinery. In addition. The current agricultural policies under the free market framework have not been able to promote agro processing in the country. due to capital deficiency on the part of farmers. farmers do not see any need to engage in value addition initiatives.

) means that high spoilage rates and low quality products can erode competitiveness. transportation etc. 12 . The small farmers have limited knowledge of the opportunities for domestic as well as profitable export in foreign markets and of the quality standards relevant to those markets as well as correct production and value added practices that result in quality produce. Formal financial services are generally unavailable in rural areas. For most lenders. agricultural sector activities are considered to be very risky. improper packaging and insufficient mechanized industries. small holder farmers are still unable to use their land as collateral to access finance since most of them do not have the right to ownership of the land they cultivate. The absence of formal channels of finance in rural areas limits the number of small holder farmers who can purchase seasonal inputs or invest in other productivity-enhancing goods and restricts the capacity of small traders who play an important role in agricultural marketing and those who might invest in local processing. interest rates on loans are relatively high.agricultural sector. At the same time. Thus generally. The limited infrastructure to support agro-business (cold storage. although the land law has been reviewed.

The availability of the technology must be sustainable in that the number of people manufacturing and using the technology increases with time even without external stimuli. TEMDO will be successful when the developed technologies are made available in the local market to as many people as possible. one-off manufacture and sale. The technology development and commercialization process at TEMDO involves the following activities: 13 . The methods used to commercialize the technologies include sale of designs or prototypes to manufacturing enterprises.1 The Process Since its inception in year 1982.7. the Tanzania Engineering and Manufacturing Design Organization (TEMDO) have developed a number of technologies (machinery and equipment). However the level of commercialization is not yet satisfactory. most of the technologies have been in the agro-processing sector.0 Technologies for agro processing and value addition 7. Dictated by the economic situation in the country. Using various approaches these technologies have been commercialized and made available to the targeted end users. batch level or pilot manufacture and sale.

TEMDO will work together with the manufacturing SMEs until the SMEs have developed enough capacity to continue on their own. it will consider transferring the technology to private manufacturing SMEs for commercial production. 14 .• Market opportunity The tool normally used to analyze the target group or market is the feasibility study. The assistance includes provision of engineering drawings. TEMDO goes into pilot manufacture. jigs and fixtures. After developing and testing the prototype. operation manuals and a business plan for the technology in order to convince the manufacturer and target user on the viability of the particular technology. It is intended to establish the financial viability of a particular technology. The aim of pilot manufacture is to test the market and to obtain views from the users on the suitability of the technology and area requiring improvement. TEMDO will provide the entrepreneurs with the necessary assistance for development of the technology. bill of quantities. When TEMDO is satisfied with the performance of a particular technology. • Technology TEMDO carries out the design and development of the technology. sample product.

• Withdrawal When the private manufacturing SMEs have reached a stage where they can take over commercial manufacture of the technology on their own. The manufacturing SMEs will then continue with commercial production and will be allowed to carry out further adaptation and development on the technology as the market may demand. adaptation and 15 . • The Manufacturing SMEs The aim of transfer of technology from TEMDO to manufacturing SMEs is to relieve TEMDO from commercial production of technologies so that they concentrate more on technology development work. • Marketing and Promotion TEMDO in consultation with other stake holders will deal with marketing and promotion of the developed technologies. Successful value addition activities involve innovation. 7. The promotion strategies will include publicizing and demonstrating the technology with the aim of bringing the technology to the attention of potential customers.2 The Technologies Technologies for processing and value addition can be available locally in Tanzania if there is proper coordination among the various stakeholders. TEMDO has to withdraw from the process.

seed oil processing. Some of the various value adding activities and technologies (machinery and equipment) for adding value to farm produce in Tanzania include the following: TYPE OF FOOD VALUE ADDING TECHNOLOGY (MACHINERY AND (PRODUCT) ACTIVITY EQUIPMENT REQUIRED) Raw Foods: wash. peel. TEMDO has attempted to develop a number of proven technologies suitable for value addition of agricultural produce such as fruit and vegetable processing. honey 16 . fruit chopper. Honey extraction. boil. press.dissemination of appropriate technologies. honey processing. capping machine. fruit chopper. jellies. sieve. package cutting machine. fruit chopper. peel. Over the years. fruit pasteurize. cutting machine. Bottled Foods: package cutting machine. boiling pan. strainer. grain or seed dressing and milk processing with notable success. press. peeling machine. honey extractor. pulper. honey press. fruit cleaner. Pulps cut. package pasteurizer. sources. cut. peeling machine. wash. sealing and pickled foods. peel. syrups. peeling machine. cut. pressing. filling. pulp. Canned and wash. boil. fruit cleaner. boiling pan. juicer. sieve. sealing and capping machine. filling. jams. fruit cleaner. packaging Fruit Juices and preparation.

flavored milk cooler. popcorn machine. popcorn. milk/cream separator. beans. Value -Added fresh milk. Dairy Products: milk. cheese. milled grains packaging The following-agro processing and value adding technologies are available at TEMDO ready for transfer to interested manufacturing SMEs for commercial manufacture and use (see Annex 1): • Oil expelling technology • Palm oil and palm kernel processing technology • Milk processing technology • Honey and honey products processing equipment • Fruits processing technology 8. ice cream making ice cream. filtration. yoghurt. filling. reliable technology that has a suitable size and complexity of operation for the people who will operate it. dried solar drier. boiling. fuel-fired drier. filtering tank.0 Challenges facing TEMDO in the development of agro-processing and value adding technologies Appropriate agro-processing and value adding technologies implies affordable. butter churn. milling machine. packaging Dried Foods: dried fruits. nuts. honey strainers. corn meal. packaging Milled Foods: cereals. locally produced and locally repaired. packaging. For most 17 . drier. sealing and capping machine. electric vegetables. butter machines. rice. boiling packaging pan. packaging filling. hulling machine.

most of the technologies are never taken up to pilot level for viability testing. They were developed without consideration of final users or beneficiaries. the key overriding factor is that interventions to improve food processing operations must be market-oriented. Due to the low purchasing power of the Tanzanian entrepreneurs.value-added technology. It may be necessary to both upgrade the traditional processing technologies as well as adapting (down- grading) modern technologies. Due to financial constraints. the support facilities available to them and the impact of the enterprise on the environment. then “No Further Action” is taken on the project. they opt for the cheap imported technologies with adverse consequences. Most of the new processing technologies were developed without a proper market-oriented approach. Research and development efforts on improved food processing technologies should be based on the needs of the local environment. However. 18 . If the development of appropriate technology is not feasible. the critical issue is developing that technology so it is appropriate to the scale of groups of producers and is economically feasible. This has led to premature release of technologies with adverse effects at the market place. This should include the resource base of enterprises. Technologies developed at TEMDO faces stiff competition from cheap and sub- standard imported machinery from other countries.

Tanzania has a comparative advantage in labor-intensive agricultural production and processing and could potentially be producing a wider variety of agro-processing and value added products.0 Challenges and constraints of agro-processing and value addition to farm produce The paper has so far demonstrated that agricultural transformation is central to redressing Tanzania’s poverty problem. 19 . Therefore. There exists an enormous untapped potential which should be realized in order to move this country forward. • Poor managerial skills. The main challenges and constraints include: • Absence of reliable supply of raw materials. Successes in development of value adding processing technology and industries are hindered by a growing number of challenges and constraints. research and extension capabilities must be built in order to undertake the dynamic endeavor to keep pace with the production.9.

color. 10. • Uncertainty of market for processed product in the domestic market. • For cottage and small-scale industries. promotional activities are limited due to high cost of publicity in mass media. • Low and fluctuating nature of demand. • Lack of forward and backward linkage industries and storage facilities. emulsifier.) which results in increased cost of production.0 Conclusions and Recommendations 20 . high taxation and absence of transport make serious bottlenecks in marketing products. • Most of the modern and special processing equipment have to be imported which are expensive and difficult to maintain. due to stiff competition from multinational companies. • Lack of standard packaging facilities. flavor. etc. • Increased reliance on the part of many producers on imported raw materials (preservatives.

It remains the major source of rural employment and the driving force behind its economic growth. 21 .Agriculture continues to be the mainstay of the economy of Tanzania. The globalization forces has opened up opportunities for new markets of its products and on the other hand exposed the country to greater competition. • Upgrading of quality for better competition and marketing. There is.industrial base in the villages. In the markets of the world. distribution and trade. • Development of alliances between large enterprises usually urban based and small and medium scale enterprises (SMEs) to be created at the rural level for creating dynamic agribusiness sector in rural areas adding value to domestic raw materials and generating employment. therefore. The following need to be done in ensuring a sustainable and reliable development and commercialization of appropriate technologies for processing and value adding in the country thereby improving the living standards of the people of Tanzania: • Strong urban-rural linkage should be developed to ensure sustainable development of agro. • Providing financial and technical support for the development of packaging industries. consumers demand products which are perceived to be of higher quality than those grown and processed in this country. an urgent need to process the agricultural products to higher qualities for marketing.

• Adapt and adopt new processing techniques and involve end-users to test equipment or products at pilot level • Public support to efforts in developing and supporting production. • Government policies need to be more supportive in the development of processing technologies. • Use a market-orientated approach to technology and enterprise development. 2001). The future lies in the ability to market the products (Danielson and Park. • Train small and medium scale enterprises in management and technical skills • Increase access to information by database development on available agro processing and value adding technologies and other opportunities.• Design and development of specialized transport vehicles with cooling systems for carrying fresh commodities to urban areas or to the processing industries. These agro 22 . • The Government should support the strategic plan for setting up and developing food processing industries in the districts. Technologies developed by the technology development institutions should be demand driven. • Supporting specialized research programmes for the development of suitable processing and value adding technologies. processing and marketing are needed to enable the small farmers to enter the inevitable competition.

• In order to limit the risk of obsolescence. sun flower oil. processing units located close to production centers should process and preserve products such as dairy. businesses must constantly protect. vegetables. pickles. This vertical coordination assures a constant supply of the right raw products with the qualities desired by end users. and fruits as well as animal feed. 23 . • In order to capture value throughout the chain. farmers and processors must establish an integrated structure of business relationships—from the farm gate to the retailer. Staying abreast of technology will enable producers to constantly enhance product performance and value. meat. reinvent and broaden their technology platforms.

2. (2006). 8. 24 . Research Report.” The Kerr Center. Poteau.” Paper presented at the First Henry A. (1999).. An Overview. D. Shayo.F. 4. 5. “Adding Value to Farm Products. “Adaptation Planning and Implementation. Accra. Born. 15. Mbogoro. Lundy. North Dakota state University. and J. “Tanzania Small Holders are the Most Vulnerable Economic Group”. Ostertag and R.0 References 1. C. Best (2002) “Value Adding Agro Enterprise and Poverty Reduction: A Teritorial Approach for Rural Business Development. M.” Case Study. 6. and D. (2003). Ware. C. 3. “Is Agriculture Still Relevant to Poverty Reduction in Africa?” Speech in the House of Commons. Bachmann (2006).21 August 2008. ATTRA No. “Value – Added. Rweyemamu. A. Danielson. Overseas Development. E. D. Anonymous (2005). (2008). 7. 7pp. Business Times. Ghana.M. IP 141. On Farm Processing: Summer’s Harvest-Hope. Wallace Inter-American Scientific Conference “Globalization of Agro Research-Costa Rica. “Value-Added Opportunities for Small Farmers.” Agriculture and Food Security Meeting. R. Park (2001). “Agricultural Reforms and Rural Development In LICs: The Tanzanian Experience”.” NCAT Agriculture Specialists.11. H.